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City access is Red Compartida's main challenge
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Securing access to municipally owned assets at "reasonable" prices could be the main stumbling block for Mexico's flagship telecoms infrastructure project, Red Compartida.
However, authorities are confident that local authorities will play ball once they see the multiple business models that can provide high-quality connectivity to their communities.
The wholesale shared network is a US$8bn project with the goal of covering 92% of Mexico's population by 2024.
The onus is on concessionaire Altán Redes to negotiate access to municipal properties in order to deploy the infrastructure. Telecom projects with federal government support have collaborated with municipalities in the past.
Municipalities can charge what they like for leasing the infrastructure; there is no oversight or regulator; and when large investors are involved, there is the temptation to overcharge, Fernando Borjón, general director of Mexican investment promotion agency Promtel, told BNamericas.
"The industry is not looking for a fixed price, but a fair price," he said on the sidelines of the CLT conference in Cartagena on Thursday.
Borjón is optimistic, and sees the network helping to improve daily life for the communities by facilitating the internet of things through improved lighting, sensors to give farmers crop data, and e-health apps that monitor diabetes and cholesterol.
"I've tried to talk in terms of services rather than technical language, of how this will bring benefits to daily life," he added.
Borjón said that one of the challenges in the past has been that municipal authorities are elected every three years, which means the officials at the negotiating table can change before a deal is reached.
"We would like things to happen like they do in the construction industry, where you start building, tell the respective authorities you've started, but you don't have to wait for permits," Borjón said.
In fact, construction is already well underway and 30-40% complete, according to Mauricio Desdier, end-to-end solutions architect for Nokia, one of the two vendors providing the technology. The other vendor is Huawei.
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NEW BUSINESS OPPORTUNITIES
One of the criticisms made at the time the concession for the Red Compartida was awarded last year was that there would be insufficient demand to make the project sustainable.
Much emphasis has been put on the fact that telecoms operators already have their own networks and would not need to rent capacity. And the very incipient MVNO industry still represents less than 1% of the market.
However, speaking to BNamericas on the sidelines of CLT17, Gabriel Contreras, head of Mexican telecoms regulator IFT, said that once the message gets through that Red Compartida is not just for telecoms providers but for any business model, demand will take off.
"You are going to have capacity that can be used by any services provider," he said.
"We're not talking just about television and internet providers. We're talking about a cafeteria that wants to be a telecommunications service provider for its clients or its logistics. The capacity can be used for any business model."
Meanwhile, aeronautical firm Airbus has partnered with Nokia to propose setting up an MVNO using the Red Compartida network.
It is estimated that the Red Compartida project will need 2,500 antenna sites in order to cover 30% of the population by March 2018.
There is the possibility that the Red Compartida can use the fiber network of state electricity firm CFE and state rural satellite company Telecomm Telegrafos for last mile connectivity.
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News in: ICT (Mexico)
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