John Donoghue
President and CEO of Allied Wireless and National Fiber Networks Mexico
View from the Top

Neutral Shared Digital Infrastructure

Tue, 11/06/2018 - 10:18

Q: To what extent can your neutral dark fiber services provide cost-cutting benefits and how is this achieved?
A: Globally, the deployment of neutral digital infrastructure –including dark fiber, wireless infrastructure and data centers— has succeeded in providing OPEX versus CAPEX benefits to concessionaires, carriers, enterprises and the public sector. As carriers and concessionaires reinvent themselves as content or bundle service providers, capital is deployed more effectively in their core business.
Third-party tower companies, dark fiber companies and data centers are the usually preferred deployment methods, which we will aggressively push in Mexico through our Smart Cities strategy. Neutral Digital Infrastructure will create new companies to handle the responsibilities of managing networks in the private and public sectors, opening many new job opportunities in the country.
Q: Why must Mexico’s cities aim for dark fiber infrastructure on the path to becoming Smart?
A: Dark fiber provides higher bandwidth for the existing and the next generation networks, including 5G, IoT, Small Cell Densification, Mobile Backhaul, Edge Computing, In-Building Wireless and a new silo of applications. It also gives the private sector better control of its networks and bandwidth to improve and protect businesses. With a forecasted 25 trillion chips and sensors to be installed over the next five years globally, data and video bandwidth requirements will grow substantially each year.
Global Smart Cities prove that neutral digital infrastructure favors private sector interests, resulting in its economic development. This will only happen in Mexico at the municipal level through PPPs.
Q: What is your assessment of the state of Smart Cities in Mexico and what would you prioritize to boost their development?
A: There are no Smart Cities today in Mexico. The most important step in creating these in the country is to foster more PPPs at a municipal level. Municipalities already took the first step in becoming Smart, which is to incorporate technology to improve a specific service or address certain needs, such as safety, traffic, water or power management.
In this scenario, the creation of a neutral shared digital infrastructure is crucial to further advance Smart Cities in the country. Mexico needs to deploy a great deal of fiber and at least 80,000 towers and 500,000 small cells to meet the demand for 5G connectivity, IoT, In-Building Wireless and AI applications. Neutral shared digital infrastructure is also crucial to avoid an ROW cannibalization by carriers and to boost economic development in cities.
But Mexico’s current infrastructure ROW prevents many international companies from entering the market. A CFE pole by law is allowed three cables but throughout Mexico you will find as many as 20 fiber cables on a pole. Streets have been dug up as many as five times. In both scenarios, corruption is the normal practice hindering foreign investment in the telecommunications sector.
Q: How did the Telecommunications Reform impact your business in terms of opportunities and challenges?
A: The Telecommunications Reform welcomed new investment, promoted competition between companies and benefited Mexicans by lowering consumer costs for wireless services by 50 percent. I think that organizations such as PROMTEL, IFT, CANIETI and CUDI have done an outstanding job in a short period of time. I also believe that the success of the Shared Network project will enable new entries of mobile virtual network operators (MVNO). In the US, TracFone has 24 million subscribers as an MVNO using all four US Wireless Carriers. Owned by Carlos Slim, this can serve as a lesson for the Shared Network project. Limited by capital, the only way the Shared Network project can be built is through shared neutral digital infrastructure.