Telmex It is the telecommunications company with the longest tradition and dimension in Mexico. His history adds 142 years, from its first origins in 1881 with Ericsson. Its fiber optic network reaches 320,000 kilometers long, apart from its copper network. Opera more than 50 metropolitan rings in all the country. Its telephony, voice and streaming services add 21 million accesses and its workforce is 60,000 workers, 28,000 of them active. Your network infrastructure is a medium for the traffic of the 83 million users of Telcel.
But what of all this is the most valuable as a present and future business? Telmex is an indispensable colossus for telecommunications in Mexico, but also an obstacle —say its competitors— for real competition in the sector. Televisa, AT&T and the telecommunications chamber demanded their structural participation so that new owners with different parts of Telmex foster another business relationship in the sector.
The structural separation of Telmex is a recurring idea before a special regulation that has been unable for 10 years to reduce the market share of the company, owned by magnate Carlos Slim Helú. Telmex has the first position in the fixed telecommunications market in Mexico (telephony and internet), even with its constant operation in red numbers for three years, the same as Telcelits sister company, is a leader in mobile telecommunications.
Entrepreneurs consulted by The Economist They agreed that some Telmex assets are more attractive than others and that, in the event that the telecommunications regulator orders their division into different companies with different ownersthe segments with the highest value are the metropolitan connection rings, the Telmex data centers in Querétaro and the corridor that connects to Queretaro with Mexico City, in addition, of course, to the rights of waywhich is difficult for other operators to achieve.
He Federal Institute of Telecommunications (IFT) is reviewing the effectiveness of a special regulatory policy that it created for Telmex and Telcel in 2014 and that it has had subsequent updates, but without achieving the objective: to reduce the market share of both companies, to promote the growth of other companies through own investments and using the Telmex network and offer consumers other offers of greater quality, coverage and affordability.
The idea of the structural partition of Telmex was strengthened before the IFT with opinions from AT&T Mexico, Televisa Group and the Chamber of Telecommunications, the Canieti, which leads a thousand telecommunications companies throughout Mexico. Opinions can be input for a new regulatory strategy.
A businessman consulted for this article, with operations in the fiber optic business, considered that the asymmetric regulation of Telmex has had mixed results. For this businessman, streamlining the processes to access the Telmex network would help boost the market. But, he said, if the regulator orders the definitive participation of the company, the most important asset is the connectivity of the hub in Querétaro to the north and south of the country and to Mexico City.
Another businessman, with businesses in the segments of radio bases, sites and antennas, believes that an eventual division of Telmex would be complicated not only because of the time it would take to sell, but also because the architecture of the network that the company operates makes it complicated. “Technically, we don’t think so possible. But if it were, where you can take advantage of the transportation networks and the metropolitan rings to do it last Mille and connect other networks, it could be an important opportunity for the industry”, he said.
In any case, this businessman said, the most interesting aspect of a possible participation of Telmex would be the rights of way, fiber optic network and the routes that Telmex operates means the best part of the business. “Those assets are the thigh and the breast,” she said.
Telmex has the brain of its network installed in Querétaro. Its data centers have been located in that region since 2012, after a first investment of 165 million dollars that year and from there it connects its 320,000 kilometers of fiber optic networks that it said it would have in 2021. Mexico City, for its part, it is a market with 3.2 million fixed Internet accesses, between residential and corporate; also with 2.5 million fixed voice lines and 1.5 million accesses to pay television. Mexico City is as large in volume as the fixed telecommunications market in all of Uruguay and in Mexico it participates with the 15.3% of the national GDP.
Telmex had a net profit of 2 million pesos in the last quarter of 2022, after more than two years of net losses and its user volume fell by 2.7% and its revenues by 1.8%. Despite this, the company has a brand value over the 3,503 million dollarshigher than the value achieved by other companies such as Bimbo, Oxxo and Victoria, according to Kantar Brand in its report “The 30 most valuable Mexican brands of 2023”.
If Telmex were sold, in parts or completely, another businessman opined, the Telmex network would have to be thought of as if it were a skeleton, with extension in Querétaro and the focus in Mexico City, the urban sprawl with the largest population and businesses. in the country.
Despite the effects of asymmetric regulation, in ten years, Telmex has grown its networks by almost 30,000 kilometers fiber optics and all its infrastructure has the potential to cover up to 129 million people in the country.
The Telmex network is hierarchical, said this businessman with businesses in the radio spectrum, and it cannot be disrupted in sections. It is a circulatory system that even Telcel has connected to and, to a greater or lesser extent, other operators have used for their own development.
In 2017, in its first review of its regulatory policy, the IFT warned that if the market continued to present a high concentration it would value the structural separation in Telmex, which would mean the sale of its wholesale arm, the brand Last Mile National Networkto a new owner.
