What scenario awaits Mexico's IT industry after the elections

Given the solid lead Claudia Sheinbaum, representing Mexico's ruling Morena party, enjoys in the polls, major changes to current telecoms policies are not expected under the next government, although outgoing President Andrés Manuel López Obrador could still push a constitutional reform with deep impacts on the sector.

Elections are slated for June 2 and the next president will take office for a six-year term on October 1. The next congress, however, will be seated on September 1.

Sheinbaum is likely to continue the ICT policies at the federal level that she implemented during her time as mayor of Mexico City between 2018 and 2023.

As an ally of López Obrador she is also likely to continue his Internet para Todos program and get another Mexican telecoms satellite launched.

The current administration “has not really had a public [telecoms] policy. It has had projects, but not a policy, a national strategy,” Fernando Borjón, analyst at Access Partnership and former head of IT investment promotion agency Promtel, told BNamericas.

However, this lack of policy did not hinder business, and the government succeeded in presenting Mexico as an attractive destination for investments, especially those from North America.

“Perhaps from the private side there will be a continuity of this organic growth of the economy and companies, but without much help” from the State, if Sheinbaum wins, added Borjón.

“In the case of the Sheinbaum platform, there are two key questions: Will they maintain the stance against autonomous organizations? And what is the relationship between Internet para Todos and Altán?” Jesús Romo, an analyst at consultancy GlobalData, told BNamericas.

“We are talking about a wholesale network operator [Altán] that has become the main host of MVNOs, and how this network is going to be maintained in the future, if there will be resources for it, etc., is one of the most important issues,” he added.

Trailing Sheinbaum, Xóchitl Gálvez, who represents a conservative coalition formed by the PRI, PAN and PRD parties, aims to promote the industry and promises a “universal digital inclusion policy” with specific goals and actions to incorporate digital tools into the health, education and security segments, as well as a broadband universalization program to strengthen networks and infrastructure, such as datacenters, interconnection points and cloud architecture. 

Center-left candidate Jorge Álvarez Máynez, who's third in the polls, emphasizes access to telecoms as a right, free broadband and expanding infrastructure in remote areas.

CONSTITUTIONAL REFORM

As the new congressional term will start on September 1, López Obrador could push a constitutional reform with implications for the IT sector before he leaves office, if his party gains a majority as expected.

The reform plans involve the dissolution of regulator IFT, competition authority Cofece and transparency agency INAI.

While López Obrador's initial plan to eliminate the IFT did not gain enough support to advance, he cut the authority's budget and delayed the appointment of commissioners.

“Regardless of whether or not there is a constitutional change, it is important to see what the attitude of the next executive is with respect to autonomous constitutional bodies because, although a previous reform to eliminate IFT did not progress during the [current] six-year term, we have seen that it is not necessary to eliminate them, as pausing or delaying [appointments] can have an impact on the functioning of these organizations,” said Romo.

Borjón said the risk of eliminating autonomous organizations relates to doing away with an independent and technical body and creating a discretionary model that is centralized in the national executive branch.

INTERNET PARA TODOS

The program to connect the entire population through public utility CFE's fiber network and that of Altán is set to continue. A flagship government project, Starlink services were added last year.

According to CFE, nearly 12,000km of fiber optics are illuminated, over 2,600 CFE telecoms towers and 97,730 free internet points are in operation, achieving coverage of 94.7% of the population.

SPECTRUM COST

Local industry has long complained about high spectrum prices. Association GSMA said payment for rights represents 85% of total spectrum cost, while Mexico lost 4.9bn pesos (US$296mn) in revenue in 2023 due to spectrum returns.

“It is a very important issue that we have been dragging on for a long time in the country,” Romo said.

Borjón does not expect Sheinbaum to revise spectrum costs, as that would mean lower income for the State.

Gálvez has promised to review spectrum costs to encourage deployment. “That is the only platform that proposes [revisions] and it is a key point in the sustainability of Mexico's mobile industry,” added Romo.

NEARSHORING

More generally, all candidates recognize the opportunities created by nearshoring.

Sheinbaum wants to strengthen FDI as a driver of job creation and advocates replacing Asian imports with regional production. She emphasizes infrastructure works, while Gálvez and Máynez focus on improving the energy system.

Gálvez also said legal certainty and the digitization of municipal procedures were key to speed up investments.