15 Years Growing in Mexico's Rising Telecom Industry

It has been 15 years since the Spanish firm Telefónica Movistar arrived to the Mexican telecommunications market. Back then, Mexico was waking up to its potential and trying to figure out how to provide connectivity for its massive population. Throughout this time, the firm has positioned itself as one of the top telecommunications companies in Mexico, while the telecoms market has been growing along with a population that demands connectivity as a priority. 

The request for internet and communication access is not just a priority for the Mexican market. “There is exponential global growth in connectivity, with 7.4 billion subscribers to personal internet for mobile devices and 3.2 billion daily internet users,” says Carlos Morales, CEO of Telefónica Movistar Mexico. “Today, we are experiencing the digitalization of society through changes in products, consumer habits and different channels of communication. Everything is focused on data consumption.” 

The growth of digital society is demanding the creation of new business models. Movistar’s model, Elegimos todo, integrates three value propositions: “Unique and simple products, excellent connectivity through LTE services and the company’s core values that provide the best experience and client satisfaction.” Morales says Telefónica trusts Mexico’s potential. The company will continue working on its growth plans with investments above 13 percent of its annual income; so far, the company has an accumulated investment of US$13 billion. Its growth plan is focused on the expansion of its network, which has more than 10,500 radio bases. Telefónica has also invested US$50 million in its Data Center in Parque Tecnológico de Ixtlahuaca. “We are a key player in the market, with 26.6 million clients and coverage in 90 percent of the urban population,” says Morales. 

Telefónica is also promoting its B2B portfolio of integrated digital solutions to help Mexican companies increase their productivity. Morales says its ideal portfolio includes cloud solutions for storage, hosting and unification of communications, security solutions for management of devices, cybersecurity and threat detection, connectivity solutions like IoT and the development of applications for specific industries. The IoT program will be delivered to industries such as energy, healthcare and banking. “Telefónica is helping its partners increase their productivity and efficiency by offering integrated digital solutions that optimize their processes and reduce their investment budgets.” 

According to GMSA, Mexico is the second-largest mobile communication market in Latin America and one of the Top 15 in the world. Telefónica Movistar sees great potential in the Mexican market due to the size of the young population and the creation and arrival of new businesses. According to INEGI, 70 percent of internet users are 35 years old or younger, and almost 40 percent of homes have an internet connection. “Our present world demands permanent connectivity and this digital revolution pushes us to work harder on providing better standards and services every day,” says Morales. 

Telefónica is also focused on growing its customer service. In 2017, it will be opening more than 100 stores in cities such as Cuernavaca, Guadalajara, Monterrey, Tijuana, Leon, Puebla, Baja California and Merida. “At Telefónica Movistar, we offer our clients a different experience. We are proud to be the mobile telecommunication company with the fewest claims from our customers,” says Morales. 

Despite the company’s success, market obstacles have restrained the company’s development. “From the beginning, one of our priorities was the definition of a competitive environment for all players in the telecommunications sector. Around 15 years later, we still face significant challenges from a regulatory point of view,” says Morales. “One of the challenges includes creating a more cost-effective spectrum to meet the growing demand for digital services in Mexico.