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The 5G Mirage

By Luis Rubio - Holland & Knight
Executive Partner


By Luis Rubio | Executive Partner - Wed, 03/01/2023 - 10:00

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This is our last article of this series related to infrastructure and telecommunications.  We have tried to provide the reader with a general overview of how their mobile phones connect to the base station and how their voice and data are carried to and from their mobiles using almost nothing more than radio frequencies. We have also underlined that in order to reach more people and provide better telecommunications services to customers, it is essential to make available to network operators any suitable infrastructure on a non-exclusive and non-discriminatory basis, and at a reasonable cost, which includes poles and fixtures in urban areas, rooftops, buildings, rights of way, bridges, pipelines, power utility towers and infrastructure.

Additionally, we have mentioned that deploying a telecommunications network requires huge investments. The cost of money has to be factored in as well as the cost of fees that have to be paid to the government in exchange for attaining a master commercial telecommunications concession (concesión única para uso comercial), and for using and enjoying radio frequencies. As mentioned in our prior article, several studies performed by different stakeholders within the mobile industry show that the latter cost is unreasonably high in Mexico as compared to other Latin American countries.

Unfortunately, it is unlikely that the foregoing current conditions, which adversely affect the deployment of telecommunications networks, may change in the near future. The Mexican Congress has shown no intention even to consider revising the amount of fees charged for using and enjoying radio frequencies. As has happened before, the term of the current legislature will end and it will have missed yet another opportunity to set things right and depart from an unreasonable and unjustified policy of extracting revenue from mobile operators. The legislature should have worked on drafting and enacting a reasonable public policy aimed at fostering the deployment of telecommunications infrastructure to those locations currently unserved or underserved within Mexico.

On the other hand, the incumbent federal government has shown almost no intention to fix the current situation and ensure equitable access to infrastructure. How can it be that federal administrations of different flavors (red, blue, cherry …) come and go and current conditions remain unchanged? Is it because no decision-maker politician actually cares about it? Is it because the current disorder serves the purpose of politicians and bureaucrats? Or does it serve the interest of incumbent network operators?

With all these adverse scenarios not only at the federal level, but also at the state and local level, it seems unlikely that we will witness in Mexico a rapid deployment of state-of-the-art networks and equipment that are needed to have the best of the best telecommunications services that technology can currently offer to customers; that is, 5G services. Now, we all have read and heard the news about a couple of mobile operators offering 5G in selected cities within Mexico. How can 5G be offered in Mexico despite the foregoing adverse scenarios? Why would mobile operators put at risk their resources to introduce and offer this new technology to their customer base? Is it actually 5G or is it just some slight flavor of it?

I have asked several friends and family members that I know have “5G” coverage on their mobile plans whether they actually have had a better experience with 5G. The people I have asked have been using mobile phones for more than a decade. Some are technology savvy and others are not, but all use their mobiles intensively for business and leisure. Have they perceived whether a movie, episode or video downloads to their mobile phone notably faster in 5G? Has voice quality notably improved? The answers I have received have been the same: no perceivable difference between 5G and other (legacy) wireless technologies. So what is happening here?

Well, mobile operators are working with what they can or what the current telecommunications regulator has provided them. They are offering 5G services on frequency bands that can only deliver data at some defined discrete rates, but not at ultra-fast rates as promised by the new technology. To be able to deliver on the promise of 5G, the regulator has to ensure that mobile operators have access to higher frequency bands that are capable of sustaining the appropriate data rate throughput.

The regulator has plans of publicly auctioning such higher frequency bands in the near future, but it has been vocal about the fact that a successful public auction will depend, among other factors, chiefly on the amount of fees that the government plans to collect from the winners of such public auctions. If the government plans to collect the amount of fees as in the past with the mindset of extracting revenue from mobile operators, surely the public auctions will be a disaster. Potentially, only the incumbent mobile operator would have the financial muscle to pay those fees (which would be ultimately indirectly paid by its customer base). Of course, higher frequency bands require that more antennas are deployed closer to end users. That means that timely and non-discriminatory access to infrastructure is key to ensure a cost-effective deployment of new generation telecommunications networks for the benefit of end users.

(In collaboration with Octavio Lecona Morales)

Photo by:   Luis Rubio

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