Mexico’s majority acquisition of Altán Redes worries experts

The Mexican government’s decision to take control of Altán Redes, the consortium that operates the shared mobile network in the 700MHz band, could violate international trade agreements and distort the market, according to experts. 

On Wednesday, panelists at the Conecta México telecom event in Mexico City discussed regulations and public policies and were asked about the decision to save the consortium, which is in bankruptcy protection because of debt problems.

Gerardo Soria (pictured, center), president of telecom rights group Idet, said the administration will violate the US-Mexico-Canada (USMCA) trade agreement “and, consequently, all the treaties we have in terms of investment protection.”

He warned the government could attempt to oblige the federal and state governments to hire Atlán services to make it profitable, nullifying contracts of private operators and disrupting competition. 

“More or less the same thing is going to happen to us as is happening in the energy sector: there are going to be many international arbitrations,” he said.

Meanwhile, Rebeca Escobar (pictured, right), head of telecom regulator IFT’s studies unit, said the move “creates distortion.”

“It is a matter of reflection and analysis that should be done as soon as possible,” she said, adding that if the government seeks to act as a telecom operator, it should be assigned rural areas where private investments are lacking. 

The motives

Although Altán claimed it was unable to reach its 92.2% coverage goal by 2024, President Andrés Manuel López Obrador (AMLO) decided to rescue the company to meet his goal of universal internet coverage. 

Under the internet for all program of power utility CFE's telecoms unit, CFE-TEIT, AMLO seeks to use both companies to speed up connectivity in rural areas. 

The plan involves a 3bn-peso (US$150mn) investment by a development bank to maintain Altán’s operations, AMLO was quoted as saying by local media on June 10.

"We now have the majority of company Altán, which will mean having internet in all towns and free internet in public squares, in schools, in hospitals, in all places of collective interest," he said. 

"We are never going to reach that silly promise of free internet for 100% of Mexicans," Soria said, adding that investment should go to other priorities that will actually reduce the digital divide.

In March, IFT extended the deadline for Altán’s coverage commitments, which operates a mobile network and fiber optics infrastructure to offer wholesale services to virtual mobile operators.

As part of the deadline extension, IFT determined the consortium must cover at least 70% of the population by November 30, while the 92.2% milestone was changed from 2024 to January 2028.