Last week, Mexico’s América Móvil, announced that it had launched 5G services in 18 Mexican cities including Mexico City, Durango and Leon. The company, through its subsidiary Telcel, plans to spend USD 1.8 billion to develop the largest 5G infrastructure in Latin America and has vowed that the network will reach some 120 cities by the end of the year. Around one million Mexicans are currently connected to 5G – the key challenge connected to taking full advantage of the country’s looming 5G opportunities concerns the 126 million Mexicans who are not.
A telecommunications specialist based in Mexico said, “The expansion of 5G networks in Mexico provides enormous opportunities for both the public and private sector. Mexico’s healthcare sector in particular is set to benefit from robotics, telemedicine and artificial intelligence. The challenge is that few sectors of the Mexican economy currently utilise the technological infrastructure necessary to connect to the 5G network, just under 1.5% of that infrastructure is able to do so.”
“The expansion of 5G networks in Mexico provides enormous opportunities for both the public and private sector.”
Telecommunications specialist, Mexico
From government bureaucracy to outdated agricultural technologies, Mexico’s technological infrastructure is woefully deficient. This harms innovation. A high-speed broadband revolution could see the introduction of autonomous vehicles on the country’s roads and allow hospitals to perform remote-assisted surgeries. Better connectivity will even result in significant energy savings given greater capacity and much improved transfer and download times.
Without wanting to state the obvious, for 5G to be effective, Mexicans have to be able to connect to it. On a positive note, Mexicans are spending more money on better phones that are gradually becoming more technologically sophisticated and less expensive. This is particularly important for rural areas where many people do not own smartphones and where salaries are lower and infrastructure less developed.
América Móvil controls about 70% of the mobile market in Mexico whilst local rival AT&T largely controls the remainder. Between the two, 2G, 3G and 4G networks will continue to operate simultaneously, especially in smaller urban centres and rural areas. Indeed, it is estimated that around 5% of current equipment still operates in the 2G band. It makes sense therefore that, for now, 5G will be developed in the main urban centres of the country.
The telecommunications specialist explained, “Should Telcel’s 5G rollout in Mexico be successful, they will likely look to opportunities in other markets across Latin America. Chile, Brazil and Colombia – where telecommunications infrastructure is among the most developed in the region – will be prime targets. The company will seek investments to adapt local networks to support 5G technology.”
“Should Telcel’s 5G rollout in Mexico be successful, they will likely look to opportunities in other markets across Latin America.”
Telecommunications specialist, Mexico
In Mexico, there is political capital to be made should the rollout be successful and will no doubt be trumpeted by the current administration. On the other hand, it could widen the country’s intransigent technological inequalities where the most developed areas of the country continue to advance towards better technology, while the less developed south lags far behind.
For now, Mexicans will need to be patient. Many of Telcel’s network investments – required for the installation of 5G – are pending. 5G is an exciting prospect for Mexico and if developed in tandem with infrastructure upgrades and wider usage of smartphones could give the country the technological competitive edge that Latin America’s second-largest economy so sorely needs.