Not a Residential Service, A Business Ally

Q: What are the main market features that brought Cradlepoint to Mexico?

A: During the 2Q20, when Cradlepoint was formulating its international expansion plan, there was a great deal of deliberation on the optimal path into the Latin American market. Ultimately, it was narrowed down to Mexico and Brazil. Internal discussions focused the company’s decision on the convergence of three ideal factors: technology development analogous to the US market, the strong presence of multinational companies and a state digital transformation strategy. Mexico immediately stood out for its agreements with over 50 countries, which made it the ideal bastion for Cradlepoint to expand outward into Latin America. Moreover, Mexico hosts 1,000 of the largest US American companies as well as 500 of the most important companies in Europe. Moreover, although Mexico has strict regulations, the legal framework is organized, predictable and relatively easy to follow and execute in comparison to Brazil, which has a more complicated, unpredictable legal environment with a more exhaustive compliance process. Overall, the congruence of these characteristics has made our transition into Mexico over the past eight months natural and transparent.

Q: At what point does a company need to acquire wireless edge solutions like those you offer?

A: The deployment of business connectivity fundamentally depends on market availability and existing complementary infrastructure, namely optic fiber, which now exists in most city centers throughout Latin America. These contingencies make direct connectivity more complex and expensive and, thus, less appealing to institutions and businesses alike in comparison to immediate connectivity, which offers high mobile bandwidth and cloud service, which is basically how everyone operates now. The system is limited to 4G but when 5G becomes commercially available, it will be 10 times as fast.

Q: What is inhibiting Mexican companies from adopting your solutions?

A: The main obstacle is that mobile bandwidth is viewed mainly as a residential technology to be used by families. However, the global economy is undergoing a rapid digitalization process in which we will be given an opportunity to demonstrate that this technology is not only compatible with enterprise technology but it also offers companies added operational capabilities and stability. From experience, we know that Wi-Fi can vary by location and strength, which is not the case with mobile broadband. This technology has been specifically designed as a hardware to software to Cloud network to ensure work continuity, prioritizing high-performance transactions such as fees and emergency services. I anticipate our technologies will be adopted over the next 12 to 18 months as the domestic market realizes that our technology is flexible, faster and cheaper.

Q: Do you consider mobile carriers to be your direct medium- and long-term competitors?

A: No, on the contrary, mobile carriers are our allies because they provide the infrastructure needed to support intercommunication, whereas we act as a service within that infrastructure. In fact, we have actually been well received by carriers that see potential and opportunity in this nascent business sector. It could also accelerate the digital transformation in Mexico. We will be referring to carriers for their input on this ambitious project, especially as we move from a 4G to a 5G network, which represents a quantum leap in speed and productivity.

Q: What regulatory changes are needed in Mexico to push 5G along?

A: Presently, Mexico meets all the technological requirements needed to install and deploy a 5G network service. In fact, the frequencies that will carry 5G communication are already in operation. We already have proof concept and operation with this network in various regions and cities across the country.

This, however, must be preceded by commercial regulation, with the federal government in charge of launching the auctions.