The State of 5G Adoption in Mexico

Cradlepoint, a subsidiary of Ericsson and a global leader in cloud-hosted LTE and 5G wireless networking and security solutions, has unveiled the results of its annual report, State of Connectivity in Mexico 2024. The study, conducted in collaboration with Censuswide, analyzes the business impact of connectivity technologies, highlighting significant trends, challenges, and perspectives in the Mexican market.

In February 2022, following considerable investment in infrastructure by Telcel and AT&T, supported in turn by the Federal Telecommunications Institute (IFT) through the Technical Committee on 5G Deployment in Mexico, 5G networks arrived in the country. Two years later, Mexico has 6.6 million subscribers to these networks in 125 cities, projecting a 5G adoption rate of 51% of all mobile subscriptions nationwide, according to Ericsson's Mobility Report. Mexico is now the second largest market in terms of 5G user volume in Latin America, representing 23.6% of all total subscriptions in the region, a market of approximately 120 million users. 

However, according to the report, Mexico has lagged in the adoption of 5G technology compared to markets such as Chile and Uruguay, which enjoy a higher per capita deployment thanks to a more favorable regulatory environment. This is evidenced by the fact that 4G LTE networks, deployed in 2014, continue to be the most widely used within the Mexican market, accounting for around 85% of total traffic, according to IFT data.

According to Cradlepoint's report, demand for enterprise connectivity and business applications has grown without an infrastructure to address it, thanks to Mexico's intense international trade, favorable geographical position and multiple international trade agreements, being USMCA the most relevant one.

"Mexican companies are aware that the recent technological transformation is part of an incremental global trend. Keeping up with it is the only profitable option in the medium and long term," reads the report. 

Key Findings

The report revealed that more than 70% of executives in Mexico plan to adopt 5G connectivity for their operations this year. However, there are significant challenges hindering this adoption, as nearly a third of technology decision-makers (28%) cite a lack of skills needed to adopt 5G, while 29.1% say the main barrier to adoption is concern about maintaining a secure company environment.

Another key finding within the report, and the one that points the most toward the adoption of operational 5G networks, is the persistent challenge of consistent connectivity for Mexican enterprises, this because 50% of companies reported suffering 1 to 2 hours of interrupted connectivity on average per week last year, resulting in higher operating costs (38.2%), operational inefficiencies (28.9%), loss of talent (20.9%) and reputational damage (14.6%).

In this context, the Transportation and Logistics sector was the most affected in terms of reputational damage (31.8%) and cost overruns (50%) due to connectivity issues, followed by the Leisure and Hospitality sector, which experienced operational inefficiencies due to unreliable connectivity.

Outlook

Despite these challenges, Mexican companies show high willingness to adopt next-generation technologies. More than 70% of decision-makers consider adopting 5G technology as one of their strategic business priorities for 2024. Sectors such as Transportation and Logistics (90.9%), Retail (807%), Manufacturing (805%), and Finance (73%), showed the highest rates of interest in adopting 5G, with the main projected benefit being the potential to increase revenues by 30% to 49% through faster transactions, more efficient operations, and higher productivity.

Despite the benefits, the lack of skills, according to Cradlepoint report, needed to adopt the technology, together with security concerns, remain significant barriers. However, the willingness of Mexican organizations to invest in technology upgrades shows a long-term vision and an awareness of the opportunity costs of not adapting to new network connectivity and security standards.

"These findings reinforce the urgency for enterprises to prioritize reliable and secure network connectivity," says Carlos Perea, Senior Vice President LATAM, Cradlepoint. "Upgrading connectivity with a holistic approach to meet the standards of the 5G environment is the most recommended business priority for enterprises this 2024."