Since last year, the mobile telecommunications industry has begun the fabric of the fifth generation in networks through a model called Non Standalone, that is, based mainly on 4G technology. And it is that to achieve a full 5G, large investments are required for the acquisition of new spectrum bands, radio bases and, especially, more fiber optic laying.
Meanwhile, since the pandemic began three years ago, fixed service companies have focused on strengthening their fiber network to meet the demand for fixed internet that has been unleashed by the streaming.
“A possible sale of Telmex would not bring benefits. What would happen to the users and the new service rules to which they would be subjected? It would not benefit the company either because América Móvil requires its fiber to be able to develop 5G,” says Jorge Fernando Negrete, president of the Digital Policy Law consultancy.
The telecommunications regulatory body will still have at least a year to determine the future of Telmex within América Móvil. According to the Institute’s Annual Work Program, it is expected to have the resolution in the first quarter of 2024.
“There is pressure from the competition towards the institute, but I think that the issue of regulation should no longer only be thought of ‘tying’ the hands of a company, but rather look more towards other industries, other providers that are not regulated and that could make the technological ecosystem more efficient”, says Jorge Moreno Loza, telecommunications lawyer and head of the Expanzione law firm.
The commitment to 5G
While it is being decided what will happen to Telmex, América Móvil is advancing in the densification of the fifth generation in networks in Mexico. Until now, the firm has established itself as the most advanced operator in 5G with coverage in more than 100 cities at the end of last year.
As the new network is densified in the country, the service will improve and prevent cell phones from switching from one technology to another, avoiding high battery and data consumption. But the company knows that in addition to increasing 5G territory, it also requires facilitating access.
In April of this year, América Móvil began the commercialization of 5G services in the prepaid modality, the largest bulk of its subscriber base, and whose strategy is accompanied by the sale of smartphones suitable for the new network, through weekly subscriptions.
“With prepaid, América Móvil can spread the technology to the masses, but, in addition, with small subscriptions it makes it possible for users to get closer to it faster. Migration can now be faster and easier and [a América Móvil]this will also help you because maybe you can already think about the blackout of the 3G network so that all the traffic goes through the other technologies. And this would imply a reduction in their operating costs and improvements in energy consumption issues”, says Jesús Romo.
The company’s bet, in addition to helping to make 5G profitable, is to fight department stores, such as Liverpool, Suburbia and El Palacio de Hierro, in the sale of smartphones, establishments that have positioned themselves since the pandemic as the main options for acquiring a mobile device.
Telcel had been one of the companies most affected by this situation. At the end of last year, the company reported 67,657 million pesos from the sale of cell phones, a 6.4% drop compared to 2021. But with the new strategy of ‘small subscriptions’, the firm recovered, because in the first three months In 2023, it reported income per team of 15,638 million pesos, which meant an increase of 14.2%.
“I think our 5G network is working well. We are putting a lot of clients on this network. We are also bringing 5G on prepaid and we are also financing equipment in the prepaid market; In general, I think we are doing well in equipment and net additions in Mexico,” Hajj said in a conference with analysts.