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INTERVIEW: AXTEL
ROLANDO ZUBIRÁN
CEO AXTEL
“Companies should have immediate access to the information they need to make instant decisions in real time. This is why the concept of digital connectivity is very important,” says Rolando Zubirán, the CEO of
Mexican telecommunications company Axtel. In June 2013, President Enrique Peña Nieto approved an amendment to Mexico’s constitution that drastically reformed the telecom industry. In early April 2017, Mexican banks and international technology vendors closed on the financing agreement with an investing consortium, Altan, to build a shared mobile wireless network that will span most of the nation.
The network, called “Red Compartida,” will cost around US$7 billion and plans to deliver 4G LTE cellular service to 92.2 percent of the population by end of year 2023. As of last year, no country besides South Korea had achieved a higher coverage percentage for LTE service.
CONNECTIVITY AND COMPETITION
Like many of the recent infrastructure projects in Mexico, Red Compartida is a public-private partnership (PPP). The federal government will supply the broadband spectrum and some of the infrastructure on which the network will operate. In return, the government will oversee and regulate the network via PROMTEL, the newly created Agency for the Promotion of Investment in Telecommunications. Telecom companies will be able to buy wholesale capacity and services from the network and in turn offer their services and products to the public with affordable coverage and quality conditions that Mexican consumers have not experienced before.
In an effort to reform the industry, officials designated two main goals for Red Compartida: to strive to provide wireless connectivity to new and incumbent providers, thus being able to reach any consumer in Mexico who wants it, and to prevent any one company or investor from controlling a majority of the telecom marketplace. “That is the most innovative part of Red Compartida—providing a level playing field for any new player that wants to come into the market with a new idea or approach,” says Zubirán. “They can very easily and competitively start providing services within the Mexican market.”
A PPP for More LTE
Mexico’s drive to upgrade its infrastructure takes another step with the financial approval for the construction of a new LTE network, which is slated to offer service to 110 million Mexicans by 2023.
A BOON TO BUSINESS
If the project proceeds as planned, the telecom CEO thinks it could drastically change the way business is conducted across the nation. Right now, Mexico is home to a number of sophisticated medium-sized companies and large established multinationals that compete domestically and around the world. But with a nationwide LTE network, Zubirán sees great potential for the growth of the small business sector. “Imagine more than two million small and micro companies being connected and having access to new applications, education, and global needs, participating very efficiently and competitively in a global market,” he says. “This would have power beyond what anybody can imagine.”
Naturally, foreign companies could spur growth by taking advantage of the new network. In addition to providing capital, these entities could impart their expertise to smaller enterprises. As a result, these Mexican businesses could potentially experience remarkable profitability due to expanded markets and more efficient and cost-effective operations.
CHANGES AND CHALLENGES
The emergence of the internet transformed the daily lives of people in developed nations; providing access to this network could initiate a similar sea change in the fabric of Mexican society. Not only would the cost of Web access continue to drop precipitously for the average consumer, but Zubirán believes that the improved access to education, resources, and growth opportunities could help lift millions of Mexicans into the middle class.
To be sure, most of the benefits that stem from Red Compartida will not materialize overnight, since Mexico continues to deal with new regulations, updated technologies, and market evolutions in the telecom sector. Also, many Mexican citizens must embrace the change to their lifestyles in order to reap the benefits of a digitally connected world. Most importantly, companies and households alike will have to align their expectations with the level of quality that the network will provide. That said, if Mexico can overcome these challenges, Zubirán thinks that in ten years’ time the entire telecom industry will look radically different from today—and Mexicans will be better off because of it.
According to OpenSignal, 148 countries offered 4G LTE coverage in the fourth quarter of 2015. Mexico’s current LTE coverage of 61 percent mirrors that of countries like Poland, Romania, and Bolivia.
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