Organized crime, the challenge
Throughout his five years providing connectivity and capacity services, the CEO of Tamayo Telecom recognizes that it has not been an easy task. Instead, he has had to confront various complexities, from financial issues to security concerns, stemming from rampant organized crime activity and the complicity of some local authorities.
In its first days, the company chose to install 40 telecommunications antennas. However, this infrastructure no longer exists, as it was vandalized and dismantled by organized crime. Faced with this situation, the decision was to abandon the antennas and focus on the expansion of its fiber optic network to provide fixed connectivity services.
For its founder, insecurity has become a significant obstacle for ISPs in their mission to bring Internet and telephony to remote areas, as they feel that the authorities do not provide them with the necessary support. He even shared that a colleague in the same business has chosen to keep a low profile to avoid attracting the attention of organized crime gangs. This colleague now markets his services exclusively online and avoids any kind of flashy advertising.
“The operators have faced abuses by the municipalities and security problems. In certain areas of some municipalities where cartels operate, technicians are kidnapped and attacked without the municipality or the state providing security. We have had to witness situations in which that we were installing a link for a common service, and the technicians are threatened and extorted in broad daylight, even in places with surveillance cameras. Unfortunately, impunity prevails,” said the CEO of Tamayo Telecom.
According to the National Chamber of the Electronics, Telecommunications and Technologies Industry (Canieti), the Bajío and northern Mexico have become the regions with the highest risk for companies dedicated to connectivity services. However, in recent times, the southeast of the country is emerging as a new epicenter of organized crime activity, with a constant increase in records of its presence in the area.
Infrastructure challenges
ISPs, including Telecom Tamayo, face additional challenges due to sudden changes in weather conditions and power supply. In the southeastern region of Mexico, according to Javier Tamayo, there is only one main route to establish connections. Therefore, any power outage or fluctuations in voltage, which often occur due to high temperatures in the country, rains or hurricanes, directly impacts the services of these companies. These natural phenomena can cause damage to the devices and connections installed in the infrastructure of the Federal Electricity Commission (CFE). He even mentioned that this situation also affects the Virtual Mobile Operators (OMV) that operate in Altán Redes, which can occasionally lead to service failures for users.
As a result of these natural events, companies are forced to make additional investments to replace devices that have been damaged as a result of these eventualities.
To date, Tamayo Telecom has allocated an investment of 4 million dollars to its company. “Now we are at an intermediate point in which we are not generating significant profits or losses. However, we believe that it is essential that the government pays attention to us and sees us as an ally in the mission of expanding connectivity services in the country” said Tamayo.
The use of spectrum, an alternative
Some ISPs operate using non-tendered spectrum bands, or free use. That is, bands that any telecommunications operator can use even if they have not been assigned by the regulator for a specific company. This way of operating has generated controversy in the industry and has even led to some small operators being classified as “pirates.”
The creation of a telecommunications network is a complex challenge globally, but in Mexico, it becomes a monumental challenge. The telecommunications industry demands a significant investment to expand network coverage, which involves the installation of infrastructure and, of course, the acquisition of spectrum bands, one of the most expensive resources in the country.
Jorge Tamayo maintains that calling these operators “pirates” is unfair. In his opinion, it is necessary to understand the situation in its entirety. ISPs, on average, generate monthly revenue of $10,000, of which approximately $8,000 goes to running the network. This leaves almost zero financial margin to acquire spectrum bands, which excludes them from participating in auctions for spectrum bands, as large telecommunications companies do. The latter even show resistance to acquiring more bands due to their high costs.
“For ISPs, the idea of acquiring spectrum bands is practically unviable. The issue of spectrum has always been a matter of discussion, since, in the end, we are assigned to spectrum bands that are impossible to acquire, added to the fact that Spectrum prices are disproportionate. For example, a 10 km link with a speed of 300 megabytes in a 15 GHz band can cost around $2,000 per month, which is unsustainable and unprofitable. However, there is a need, and ISPs access bands that are not regulated,” Tamayo explained in an interview with Expansion.
One of the solutions proposed by ISPs to address this problem is for the Federal Telecommunications Institute (IFT) to release spectrum bands for unrestricted use, such as 2.5 GHz and those located between 5 GHz. According to Tamayo, these bands They have lost relevance for larger operators, who now require greater bandwidth and therefore do not consider them as a viable option.
Alejandro Navarrete, head of the radio spectrum unit, had previously mentioned Expansion that one of the options that the regulator was evaluating was the auction of free spectrum bands for Wireless Internet Providers. However, the Treasury has decided to maintain high spectrum prices for next year, which could discourage telecommunications companies and reduce their interest in this possibility.
Be the last mile of CFE Telecom
ISPs face considerable challenges in their mission to bring services to areas previously considered “unprofitable” by large telecommunications companies. However, these companies say that the need for connectivity in remote locations remains immense, which keeps them steadfast in their commitment to providing Internet access, even if they have not yet achieved a satisfactory return on investment.
The hope for these independent providers, or the alternative for the world of connectivity, is that large state projects will turn towards them and give them the opportunity to be the “last mile.” In other words, they will be allowed to bring the capacity of CFE Telecomunicaciones e Internet para Todos directly to the end user, thus unifying their capacity into a single national network. According to the manager, this would allow ISPs to achieve financial efficiencies, since they would focus solely on bringing the product to homes and businesses, without the need to invest in infrastructure.
From Tamayo Telecom’s perspective, so far, the state CFE Telecom project has not achieved the results it could have achieved in terms of connectivity. The manager attributes this to the fact that the CFE subsidiary company has not allowed the industry to collaborate in its objective of closing the digital divide. So far, the company has focused on bidding for projects to install antennas and fiber, leaving other companies to take care of the infrastructure, but the essential part, the “last mile”, is still pending.
Last year, CFE Telecomunicaciones e Internet para Todos announced its intention to install 2,800 antennas throughout the country to connect 6.4 million Mexicans in 18,634 locations that, until then, did not have access to the Internet.
“The company IENTC Telecomunicaciones, which operates in Querétaro, won a tender to install almost 1,000 towers, and they are the ones who place these towers. Currently, they act as the access point for all ISPs that want to connect to the CFE network TEIT. However, the intention is to create synergy and join forces to establish neutral networks and expand coverage more efficiently, given that financial issues affect everyone,” says Tamayo.
In May, Tamayo participated in a meeting with CFE Telecom staff where company officials assured them that they would be provided with 10 gigabit port capacity on private links. “But I have been hearing promises from CFE for two years, they even know us and send us emails to verify coverage and areas. We have proposed to provide them with connectivity options in the state in exchange for giving us the capacity to use the network in terms of infrastructure. poles and deployment, but we still don’t receive a response,” he says.
And although there is still no concrete solution that will help make ISPs profitable in the country, Telecom Tamayo is confident that its connectivity project will continue to scale, so much so that it has revealed that it will begin to make its way in the entities of Chiapas and Oaxaca. Its founder has the vision that one day all large operators, State connectivity projects and ISPs will come together to create a single network that helps bring telecommunications services to all remote places in the country.