The Federal electricity commission (CFE) obtained a concession to make its fixed infrastructure related to the provision of telecommunications services available to third-party companies, after this parastatal it also built over time national fiber-optic networks necessary for its own goal of electrifying the country, but which has not been able to achieve greater utility for them beyond the electricity sector.
The telecommunications companies will now be able, if it is in their interest, to contract these inputs to the CFE to create or strengthen their communications networks with new offers of services of telephony, video either Internet and others Applications aimed at the end user throughout the country, since the authorization of the CFE It is national in scope and valid for Sunday March 9, 2053.
It is passive infrastructure between buildings, towers, fiber optic linesposts, ducts and other network elements located in the generation networks, transmission and CFE distribution, and that the agency intends to rent to other companies to increase connectivity in Mexico, mainly in regions without cellular coverage or fixed network communication at very competitive prices for companies and that would end up favoring the final consumer; and also to somehow improve its financial profile in the face of the losses it registers your electricity businesssince only in the third quarter of 2022 this state company lost 50,719 million pesos, a figure almost 76% higher than the net loss of a year earlier.
CFE will also offer the right of way to build new networks, a guarantee that is difficult to obtain with other operators due to the excesses of state and municipal governments when establishing requirements in the matter.
The agency ensures that it has 56,000 kilometers of network lines built with recent generation fiber optics purchased not long ago from suppliers such as the Japanese Furukawa or the Italian Prysmian, both now with plants in Mexicali and Durango where they produce the latest generation fiber and “converters” that if necessary would maximize the fiber network of the CFE that could already be from past generations.
This is a dark fiber network available to be illuminated immediately with the traffic of telecommunications companies, assured the CFE in its argumentation for the Federal Institute of Telecommunications (IFT) will hand over your concession title on March 9. And there is also included the optical fiber originally arranged to complete the ill-fated Red Troncal project that the last PRI government conceived, but that the 4T definitively liquidated in 2019.
CFE told the IFT that all those kilometers of networks based on fiber optics and that in their largest stretches are located on their transmission lines, are already available to become a new transport network and of neutral characterso that any company from any corner of Mexico interested in accessing said infrastructure can bring connectivity to the retail market at more accessible prices for the user.
Furukawa assured days before the pandemic that Mexico required more than 500,000 kilometers of fiber optic lines to support the current and future traffic from Industry 4.0 applications, artificial intelligence, medical solutions, education, cloud, virtual reality, etc
The Federal electricity commission maintains that in Mexico only the company Telmex It is the only telecommunications entity with a transport network of national scope, so its network will be an attractive alternative for those actors that contract capacity:
“The CFE fiber optic network has the challenge of being an attractive option for telecommunications operators, in terms of coverage, access, quality and price, since the market today only has a transport network with a national presence , property of the preponderant economic agent (Telmex)”, said the state company.
“The CFE, by its nature, has an infrastructure that allows it to reach places where it is not economically attractive for conventional telecommunications operators, so the conditions would exist for encourage the expansion of fixed coveragean important aspect for the development of local and regional ecosystems”.
Telephones of Mexico (Telmex) is the company with the longest-reaching telecommunications transport network in the national territory. In their reports to the United States Securities and Exchange Commission (secfor its acronym in English), its parent company América Móvil reports an installed infrastructure of 320,000 kilometers of fiber optics.
Telmex’s network is about five times more extensive when compared to the network mentioned by the CFE, although this does not mean that the Federal Electricity Commission’s network could not be a competitor for that and other companies, at least in extension.
Regarding the size of the network, the CFE network is superior to that of companies such as Neutral Networks-Even Telecom (10,000 kilometers), Transtelco (8,500 kilometers in Mexico) or Centurylink (10,000 kilometers); and it is close to the extensions of other companies such as Megacable Holdings (76,300 kilometers) or Bestel (70,000 kilometers), although not as close to that of Totalplay (100,000 kilometers).
The CFE’s plans for its network after obtaining a commercial telecommunications concession from the IFT also happen to be a neutral transport network, with which it will be a direct competitor from birth. Neutral Networks, Transtelco and mark yourselfHe, who compete with investments in that business.
Not only that, because the Federal Electricity Commission also plans to sell capacity to companies that provide services to corporations, in order to promote dynamism in its business segment. If so, direct competitors will be MetroCarrier of Megacable, Transtelco, Axtel Alestra and Bestel from Televisa.
In addition to the 56,000 kilometers of fiber optics, the CFE makes available to the market up to 140 connectivity sites located throughout Mexico, to make new networks from there.
From these sites, the CFE ensures that the companies make interconnection and also give the last mile jump to smaller towns as a market, or to build their own metropolitan rings, in the event that the cities are larger and therefore offer an improvement in financial profitability. .
CFE ensures that its fiber network can deliver an ultra-fast and reliable corporate Internet product to market.
They will then be the most recognized companies in the mass market, such as Megacable, Izzi Telecom o Totalplay, which will decide to hire capacity from the CFE or continue alone with their own investment plan, or on the contrary if they will be new companies or regional or local companies, the ones truly interested in accessing the CFE network.
Before granting the title of wholesale shared network concession for telecommunications services to the CFE, the Federal Institute of Telecommunications made sure that this entity will not violate competition in the market Mexican telecommunications company, by holding her to regularly report your referral offerswhich although they will be backed by a rate freedom in favor of CFE, will always be monitored by the IFT.
The regulator, for its part, assured that it will monitor that the existence of CFE as a new telecommunications operator does not violate competition or market competition.
CFE has thirty business days counted from March 9 past to present its first reference offers to the regulator, which, when the time comes, it will use to allow third-party companies access to its network.
As an example, in terms of fixed telecommunications, the rate applicable by Telmex to third parties is 2,837 pesos plus the applicable tax for transferring the connection of an existing link in a central to the Hub and per section. CFE would have to be more competitive in order to attract its first clients. Reference offers are regulated and approved by the IFT.
“CFE has the necessary attributes for the infrastructure deployment of a telecommunications transport network, such as economies of scale generated by the provision of electrical service (…) The economies of scale associated with electrical infrastructure allow for greater feasibility in the deployment and development of the network and, consequently, greater elements for the sharing of infrastructure”, said the CFE.
