The network remains a key part of Mexico’s telecoms policy, but it has been beset by rollout delays, low adoption and financial challenges, and now needs bailing out
Stakeholders agree funding to prop up the wholesale operator: Mexico’s telecoms regulator, the IFT, has approved the bailout of ALTAN Redes, the company that operates the country’s 700MHz wholesale mobile network Red Compartida. The $388.1m financing agreement for the single wholesale network (SWN) will see ALTAN Redes become a public-private partnership for a 40-year term. The Mexican Development Bank will loan ALTAN Redes $161m and will own the majority of its shares and will have the right to appoint much of the Board of Directors. Suppliers will provide loans worth $166.6m, while shareholders and users of the network will commit $50.5m and $10m, respectively. The IFT has reiterated Red Compartida’s coverage obligations approved in February 2022, under which the operator must reach 85% of the population by 24 January 2027 and 92.2% by 24 January 2028.
Take-up saw some growth but coverage obligations have been missed: The Red Compartida SWN was (and remains) a vitally important initiative of Mexico’s telecoms policy, intended to deliver “universal, continuous and non-discriminatory” mobile broadband access across the country. The network went live in March 2018 using 700MHz spectrum and it is currently wholesaling capacity to 114 mobile virtual network operators (MVNOs) that provide connectivity downstream. Red Compartida originally faced a 4G population coverage target of 70% by January 2021, rising to 92.2% three years later; however, its rollout fell behind schedule. Today, the network reaches around 71% of the population. Adoption was also sluggish at first and though total connections have now passed the six million mark, this figure is a fraction of the overall market size. Having run into financial difficulties, the company was declared bankrupt in November 2021.
Rollout and adoption challenges have plagued other SWNs: According to ALTAN Redes, the financing arrangement, supported by cooperation between the private sector and the Government, will enable the continued deployment of the network towards achieving national mobile broadband coverage. That rollout plan should be joined by a strategy to drive adoption levels. Unfortunately, the issues experienced in Mexico do not make for an isolated incident. Kenya, Russia and South Africa, for example, all took the decision to abandon SWN projects, while Rwanda’s wholesale operator has suffered financial losses. In addition, Belarus, which launched a wholesale 4G network in 2015, reports lower mobile broadband speeds and adoption rates than many other European countries. As things stand, only Malaysia appears to be pursuing a SWN approach with 5G, with the Government promising a faster rollout and higher quality and less expensive services than would be delivered by traditional infrastructure-based competition.
Source: https://www.altanredes.com/logra-financiamiento-millones-dolares/
