Outdated Infrastructure Obstructs Billion Dollar Growth

The development of 5G is expected to catapult Mexico’s digital transformation and add between US$48 billion and US$68 billion to the national GDP over the next ten years, according to Cisco Latin America. However, existing infrastructure poses a challenge to this growth. 

Although the development of 5G network was expected to break ground in Mexico by late 2020, its realization has been disproportionally thwarted mainly by legacy infrastructure that still requires hefty sums of investment to update.

"5G deployment costs can be between 10 and 40 percent more expensive than current models, implying a challenge for operators that have already invested in 4G and are still in the process of monetizing those investments," said Mario de la Cruz, Senior Director for Cisco Latin America.

Therefore, while companies like America Movil have announced that they are ready to bring 5G technology to the country, it is likely that this technology will not be commercially available until 2025, according to study by the Wilson Center published earlier this year.

Regardless of this timeline however, business leaders who understand the added value this technology represents for their industries are anxiously waiting for its realization. Companies that invested in cloud services, cybersecurity and blockchain stand to benefit the most from transitioning to a 5G networks that would draw out the true potential of these services. Companies and the public sector alike are looking forward to increased efficiency, logistical advantages and remote operations and management capabilities.

“The digital transformation that 5G will drive will allow productivity growth in the value chains of different sectors but its deployment requires more infrastructure and investment,” he added at the 2021 IFT Forum.

Overall, while the domestic economy can expect 5G to give way to an added layer of dynamism, increase competitiveness and lead to multi-billion-dollar growth, it cannot be achieved without investing is this critical infrastructure. Meanwhile, as business leaders wait for its realization in Mexico, they risk falling behind global competitors where this technology is already underway.