Mexico at the Center of Latin America’s Telecom Shake-Up

Mexico’s telecom sector is entering a new phase as the federal government moves to take majority control of the wholesale Red Compartida network, while the country simultaneously emerges as a key player in Latin America’s M&A-driven telecom realignment, says two analyses from S&P.

Quetzal Project: A State-Led Bet on Connectivity

Through state utility CFE Telecomunicaciones e Internet para Todos (CFE-TEIT), the federal government approved the acquisition of a majority stake in Altán Redes, operator of the wholesale Red Compartida. The move, known as the Quetzal Project, reflects President Claudia Sheinbaum’s push to narrow the digital divide, says S&P’s analysis 2024-2025 Telecom M&As Shake up the Mobile and Fiber Races Across Latin America.

Red Compartida, launched in 2013 after Mexico’s landmark telecom reform, was designed as a “carrier of carriers” to provide connectivity where private operators had no incentive to invest. But financial setbacks forced a 2022 government rescue. Now, with CFE-TEIT absorbing 24% of Altán’s corporate rights and debt, the government will control nearly half of the company.

Altán operates 11,383 towers, 25.8% of Mexico’s total tower market, across over 82,000 localities serving 24 million people. The network is essential for the country’s mobile virtual network operators (MVNOs), including Walmart’s Bodega, which together represented 15.2% of Mexico’s mobile market at the end of 2024.

Fiber Growth and the Digital Divide

Mexico is among the regional leaders in fiber-to-the-home (FTTH) deployment, a technology that overtook DSL and cable as the primary broadband platform in 2022. Alongside Brazil, Colombia, Argentina, and Peru, Mexico is driving fiber penetration across Latin America. The surge is fueled by growing demand for low-latency streaming, cloud services, and OTT platforms.

According to S&P’s Latin America and The Caribbean Mobile Market Overview, Mexico remains a prepaid-heavy market, accounting for 32.3% of all prepaid subscriptions in Latin America by the end of 2024, the highest in the region. However, the country represented only 11.5% of postpaid subscriptions, leaving significant room for migration to contract-based services that could stabilize operator revenues.

Mexico’s 5G adoption grew 64% in 2024, reaching 16.2 million subscribers. While Brazil nearly doubled its 5G base, Mexico still stands out as one of the fastest-growing adopters in relative terms.

Tower Growth: Marginal but Crucial

Tower infrastructure in Mexico grew by only 0.07% in 2024, reflecting limited investment compared to Brazil’s 2.45% surge. However, with the expected densification of networks under 5G and upcoming 6G, demand for small cells and distributed antenna systems (DAS) is expected to rise.

With Altán and CFE-TEIT controlling over a quarter of the market’s towers, Mexico’s government has become a central player in deciding how future infrastructure expansion will unfold.

Mexico’s mobile subscriptions and revenues are expected to grow at low single-digit rates in the coming years, but the country’s telecom transformation will be shaped less by market forces and more by government intervention, says S&P Global. The Quetzal Project, combined with ongoing fiber expansion and gradual 5G adoption, places Mexico at the crossroads of connectivity policy and private sector competition.