SCT awards ‘dark fiber’ network to Telmex competitors

As expected, the Ministry of Communications and Transportation (SCT) awarded a 20-year concession to operate and develop a high capacity fiber optic network that will provide an alternative backbone to the one provided by dominant telecom operator Telmex (and its sister company, cell phone operator America Movil).  The winning consortium—and sole bidder—is owned in equal shares by Televisa, Telefonica, and Megacable.  They will pay the government Ps. 884 million (just over the minimum price) for the ‘dark fiber’ network of state-owned utility company CFE, and plan to invest Ps. 1,400 million to build out and light up the network, which can carry voice, data, and video. Minister of Communications Juan Molinar said,

This will be a significant increase in the telecommunications infrastructure in our country, which will provide enormous benefits for telecommunications operators and, above all, for Mexican consumers…. This will increase competition, coverage, and convergence, the three ‘Cs’ that orient the public policies of the Government of President Calderón in the communications area.

Francisco Gil Diaz, the head of Telefonica in Mexico (and former Secretary of Finance) noted:

Among the many things that are lacking in this country, one is the lack of competition. The fact that [the existing] fiber optic network is under the control of one sole operator signifies that everyone else that participates in the telecommunications market has to accept the prices and conditions of service that this operator provides us.  Now we will have competition, and this fiber network will be … available to everyone in the industry.

Comments are closed.