CFE Ventures Into Telecommunications

CFE, through its subsidiary CFE Telecommunications and Internet for All (TIT), will start offering internet and mobile telephony services in the 32 states of the country, including some places that struggle to gain cellphone reception.

CFE TIT offers a mobile broadband network with 4.5G technology. Its mobile data and cellphone plans have no fixed terms, offering 12 prepaid packages ranging from MX$30 (US$1.5) to MX$300 (US$15) per month.

The cheapest package, for MX$30 (US$1.5), offers up to 4GB of internet speed, 250 minutes of calls and 125 text messages, valid for three days. The 30-day service offers 40GB of internet speed with a hotspot, 1,500 minutes of calls and 1,000 text messages for MX$300 (US$15).

CFE TIT was conceived to bring service to areas where major commercial telecommunications operators have less of a presence. "Our network covers the need for nationwide connectivity, reducing the digital divide for disconnected communities and bringing quality communications to every corner of the country," the company reported.

The company also offers the option of switching to its network while keeping one’s old phone number to no added costs.

To access CFE TIT’s services, users can go to one of the 47 sales points distributed across 13 states in Telecomunicaciones de México (Telecomm) branches. The states where CFE TIT will have a presence include Veracruz, Oaxaca, Guerrero, Hidalgo, Guanajuato, Queretaro, San Luis Potosi, Michoacan, Jalisco, Nayarit, Durango, Coahuila and Chihuahua.

However, there will not yet be any of these branches in the State of Mexico or Mexico City.  Last week, President López Obrador revealed that he requested a new permit from the Federal Telecommunications Institute (IFT) for CFE TIT to provide mobile services in the capital, but the regulator rejected his request. CFE TIT's concession states that it can only offer services in areas where companies such as Telcel, AT&T or Telefónica do not operate.

CFE TIT entered the telecommunications market under the Mobile Virtual Network Operator (MVNO) model, the fastest growing sector in the telecommunications industry, which generated MX$4.2 billion (US$210.2 million) in 2021 and, according to CIU Consulting, has 8 million users in the country.

The MVNO scheme means that CFE TIT does not have its own telephone network. It uses Altán Redes' infrastructure to offer the service.

Altán Redes is a private telecommunications company stemming from the 2013 Telecommunications Reform. It was created to rent its infrastructure to other telephone companies that offer internet, telephony and text message services. This scheme is used by companies such as Freedom Pop, Cierto, Flash Mobile or Bait. The model allows companies to avoid the high costs of building their own network or pay high amounts for radio spectrum concessions. Atlán Redes was recently rescued by the government to avoid bankruptcy, as its infrastructure is key to CFE TIT's business model success.

The CFE subsidiary expects to benefit approximately 62 million inhabitants distributed across more than 300,000 locations. From 2020 to 2022, CFE TIT has invested at least MX$5.66 billion (US$283.2 million), although there is no precise data about its spending. The company already has 15,753 connection points, which will initially benefit more than 3 million users.