Rafael del Villar
Transcript of Rafael del Villar
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Competition in theTelecommunications Sector in Mexico
April 2008
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Coverage of Telecommunications services have still not reached
its full potential. This Administration is promoting measures to
increase penetration of telecommunications services.
Fixed Telephony, 2006
(Lines / 100 inhabitants)
Mobile Telephony, 2006
(Subscribers / 100
inhabitants)
Broadband, 2006
(Subscribers / 100
inhabitants)
Switzerland 69.4 UK 116.4 Korea 29.3
Germany 65.5 Spain 106.4 Switzerland 26.5
Canada 64.1 Switzerland 102.1 Canada 23.6
UK 57.6 Germany 101.9 UK 21.7
US 57.2 France 85.1 France 20.9
France 55.8 Korea 83.8 US 19.3
Korea 56.0 US 77.4 Germany 18.1
Spain 42.4 Chile 75.6 Spain 15.4
Brazil 20.5 Brazil 52.9 Chile 5.9
Chile 20.2 Mexico 52.6 Mexico 3.4
Mexico 18.3 Canada 52.5 Brazil 3.1
Fuente: Unin Internacional de Telecomunicaciones
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Over the last year, there has been a dramatic fall in prices of close
to 30% in mobile telephony, due mainly to an increase in
competitive pressures. In other services more competition and
faster reduction in rates are needed, particularly in Internet access.
0200
400
600
800
1000
1200
Denmark
eden
Finland
Nor
ay
Luxemburg
Netherland
Germany
Island
SwitzerlandUk
elgium
Canada
Portugal
US
Austria
OECD
Irland
Poland
New
Korea
Hungary
Italy
France
Australia
Slovaq
Spain
Turkey
Greece
Czeck
Mexico
Japan
High Medium Low$USD, PPP
Source: OECD, Communications Outlook 2007.
OECD Basket of Mobile Telecommunications,October 2006
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Household Expenditure in Telecommunications Services as
percentage of Total Expenditure, by Population Deciles
I II III IV V VI VII VIII IX X
Total Comm unications 4.8 2.9 3.2 3.5 3.9 4.3 4.7 4.7 5.6 5.7 5.0
Local Service2/ 1.7 1.3 1.4 1.5 1.6 1.8 2.1 2.0 2.1 2.0 1.4
Long Distance Service 0.6 0.3 0.4 0.5 0.5 0.5 0.5 0.6 0.7 0.8 0.7
Mobile Telephony/3 1.9 0.8 1.0 1.0 1.3 1.5 1.5 1.7 2.3 2.4 2.3
Internet Service 0.3 0.1 0.1 0.2 0.1 0.2 0.2 0.2 0.3 0.4 0.5
TotalHousehold Deciles1/
1/ Accordin to its monetary income
2/ Includes telephone installation and local calls.
3/ Includes initial payment, equipment acquisition, prepaid cards and mobile telephony service payment.
Total communications expenditure includes public telephony and other services such as mail, tele raph,
public fax, beeper and others not specified.
Source:Own estimates based on Household Income and Expenditures National Survey 2006.
ICTs have an important share in households expenditure,
regardless of their income level.
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In order to reduce the income gap it is necessary that
Telecommunications Services reach the entire population.
0
10
20
30
40
50
6070
80
90
1 2 3 4 5 6 7 8 9 10 Tot
Decile
%
Telephony
MobileTelephony
Internet ess
Penetration of Telecommunications Services in
Mexico, by Population Decile
Source: INEGI, Household Income nd E penditure N tional Survey, 2006.
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Spectrum Auction ProgramFrequency
Band (MHz)
Total
BandwidthBlocks Geographic Area
1850-1910/
1930-199030 MHz
3 blocks of 10
MHzCellular Regions
1710-1770/
2110-217090 MHz
5 blocks of 10MHz
2 blocks of 20
MHz
Cellular Regions and
Basic Service Areas
3400-3700 150 MHz
2 blocks of 25
MHz
2 blocks of50
MHz
Cellular Regions andMunicipalities / Groups
of municipalities
71000-76000/
81000-86000
10,000
MHz
1 block Basic Service Areas
Competition will be fostered by making more spectrum
available.
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Auction Programs since 1996Program Year Service MHz Availability
1 1996 Mobile 3 Country wide
2 1997
Pay TV* 118 53% of the country
Fixed 200 Country wide
Links 6,270 Country wide
Mobile 120 Country wide
3 1998
Links 2,271 Country wide
Pay TV * 180 50% of the country
Mobile 7 Country wide
4 2000 Mobile 0.025 Country wide
5 2004 Mobile
20 30% del pas**
30 22% del pas**
40 Country wide
6 2008
Links 10,000 Country wide
Fixed *** 150 Country wide
Mobile90 Country wide
30 88% of the country
Usos
Program 1 Program 2 Program3 Program 4 Program 5 Program 6
1996 1997 1998 1998 2004 2008
Links 0 6,270 2,271 0 0 10,000
Fixed 3 200 0 0 0 150***
Mobile 0 120 62 0.025 90** 120
Other No Yes* Yes* No No No
* Pay TV auctions** obile service auctions which
include 30% of the country.***The inmediate use is fixed service,
however no restrictions existe forldeliverin mobile services in the
future..
This program is the most ambitious that has been published
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Indicators of tariffs, lines and traffic
999
i ed- o ile retail rate 2.5 2.5 2.5 2.5 2.5 2.5 2.25 2.03
Fixed-mobile 1.9 1.9 1.9 1.9 1.9 1.9 1.71 1.54
Mobile-mobile 1.9 1.9 1.9 1.9 1.9 1.9 1.71 1.54
Mobile-fixed 0.3 0.316 0.117 0.094 0.105 0.11 0.106 0.106
Mobile network2,5
7.7 14.1 21.8 25.9 30.1 38.5 45.1 56.4
Fixed network2,5
10.9 12.3 13.8 15 16.3 18.1 19.2 20.9
Mobile network3,5 5,152 10,975 15,919 19,990 26,386 38,188 50,236 73,000
Fixed network4,5
23,426 24,738 25,567 25,679 26,494 26,782 26,680 26,666
Number of lines
Network traffic
Interconnection rate1
1/Pesosper minute2/ Figures in millions of lines in service.3/ Millions of minutes.
4/ Millions de Telmex calls.5/ 2006 Figurescorrespond to estimatesupuntil December.
Source:Cofetel and Telmex
In order to effectively increase competition it is important to set
more efficient conditions in interconnection.
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0.20
0.270.340.440.51
0.5
7
0.5
9
0.65
0
.70
0
.70
0
.70
0
.71
0
.72
0
.72
0
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0.73
0.74
0.780.91
0.98 1.171.301.65
0.00
0.20
0.40
0.600.80
1.00
1.20
1.40
1.60
1.80
USUK r
D
rk y
r
y
r
c
rP
P
r
ry
(2001)
S
S r
s
A
sr c
z
ckR
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.
Finland
Source: European Communities Commissions, European Electronic Communications Regulationand Markets 2006, march 2007. Peak-hour rates, adjusted by 85% factor (Exchange rate 1.3dollar/euro); FCC, Intercarrier Compensation and Retail Rate Regulation in the US; China andIndia: TRAI, Financial Analysis of Telecom Industry in India and China, june 2006.
Fixed Local Termination Rates in Selected Countries(US cents per minute)
Fixed local termination should be cost based and symmetric
for all carriers.
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Competition of backbone services has been enhanced by the
entrance ofElectric companies in the Market.
Count Utilit Compan Owne hipRelation with the a ent
Ele t icCompan
a k
Fibeit Fibe Collocation
Canada ENMAX Gove nment Ye (bu ine unit) Ye Ye Ye
Canada Telecom Ottawa Gove nment Ye ( ub idia ) Ye Ye YeCanada To onto H d o Telecom Gove nment Ye ( ub idia ) Ye Ye n.a.
US Edison Ca ie Solutions Private Yes (business unit) Yes Yes Yes
US FPL FiberNet Private Yes (subsidiary) Yes Yes Yes
Spain Ufinet Private Yes (subsidiary) Yes Yes Yes
France @rteria Government Yes (subsidiary) Yes Yes Yes
Irland ESB Telecoms Government Yes (subsidiary) Yes Yes Yes
Portugal RenTelecom Private Yes (subsidiary) Yes Yes Yes
South Africa Infraco (in project) Public-Private Non Yes Yes n.a.Central Ameri Newco (in project) Public-Private Non Yes Yes Yes
Spain Adif* Private Yes (business unit) Yes Yes Yes
Sweden Stokab* Government Non Yes Yes Yes
Telecommunications ServiceOfferings ofElectric
Companies in selected Countries
Source:Internet web-pages of the companies
*They are not related with electriccompanies, but with otherutilitycompaniessuch asrailwayin the
case of Adif and the local government in the case of Stokab.
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OECD basket of national leased line
charges 2 Mbps, August 2006
(000 USDPPP)
OECD basket of national leased line
charges 34 Mbps, August 2006
(000 USDPPP)
Fuente:OCDE, Communications Outlook 2007.
CFE entrance into the telecommunications market will lower
prices, particularly for internet access services.
0
10
20
30
40
5060
70
Czeck
ep
.
rea
olond
eic
o
Canada
ustralia
Japa
n
pain
Italy
OECK
France
ortuga
l
reece
elgiu
Turke
y
Irlan
d
er
an
y
Ne
Netherland
s
Austria
Lu
e
bur
g
Nora
y
Swede
n
en
ar
k
Islan
d-
50
100
150
200
250
300350
400
e
ic
o
Korea
Canada
Spain
Irland K
Italy
ortuga
l
Japan
France
OEC
Turkey S
Belgiu
reece
Austria
er
an
y
Den
ar
k
Lu
e
bur
g
Norwa
y
Island
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CFE entrance into the provision of Internet access will help to
lower the price disparity between rural and urban areas.
Leased Lines Prices for Internet Access (2 Mbps)
City Backbone Provider Monthly Rent
(MXN$)
Toluca, Edo. Mx. Bestel, Maxcom, Alestra $ 3,300
Len, Gto. Bestel, Maxcom, Alestra $ 3,300
Cd. Hidalgo, La Piedad,
Zitcuaro, Mich.
Telmex $ 6,000
Tenancingo, Edo. Mx. Telmex $ 6,000
Tapachula, Chis. Telmex $ 13,000
Salamanca, Gto. Telmex $ 18,200Cd. Altamirano, Gro. Telmex $ 20,971
Huetamo, Gro. Telmex $ 35,108
El Grullo, Sayula, Jal. Telmex $ 40,000
San Miguel de Allende, Gto. Telmex $ 58,650
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Local Call Revenue of the incumbent when its costumers make Long
Distance Calls and Calls to Mobiles
(Millions of Pesos per year, 2005 prices )
3 416
3 157
1 340
2 818 2 711
634
1 744
0
500
1 000
1 500
2 000
2 500
3 000
3 500
1
5
1
6
1
7
1
8
1 2000
2001
2002
2003
2004
2005
sta ce
a s t
M es
Source:Own estimates based on information reported by the Company.
mpet t w e a s mpacted y emp wer c sumers
Pract ces such as d u e sh u d e av ded.