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Mexico Telecom Reforms Pass Into Law,Unleash Considerable Growth

23 June, 2013

After Mexico’s telecom industry outperformed the nation’s flourishing economy in the first quarter of 2013,a historic overhaul of its telecommunications and broadcast industries has been signed into law in an effort to restrict the power of existing monopolies while increasing competition and investment.

“Mexico’s telecommunications industry grew 12.5 percent in the first quarter of 2013,compared to the same period last year,thanks to surging demand for satellite television,long-distance calling and wireless services,” writes the New York Daily News. “Pay television grew 12.4 percent in the January-March period. Satellite television was the most dynamic sector,posting a growth rate of 20.9 percent. Mobile data and broadband subscriptions grew 39.4 percent.”

Also of note,the total number of wireless telephone users grew 6.4 percent,cable television subscribers grew 4.8 percent and incoming international calling minutes grew18.8 percent. In addition,the total number of landlines in service as of March 31,2013 was up by more than 475,000 compared to the same date in 2012.

Investor’s Business Daily also reported on the positive effect Mexico’s recent reforms are likely to have on the nation’s growing economy,which is already benefiting from a rapidly narrowing wage gap with China. This,combined with the favorable geographical location of Mexico real estate,along with the proposed structural changes to the nation’s fiscal policy,labor markets,education and energy sectors,in addition to the recent telecom reforms,are all working to rapidly prompt greater consumption and investment throughout the country.

“Nieto says economic growth by 2018 could accelerate to 6% from last year’s 3.9%,on a rebound in productivity and investment,” writes Investor’s Business Daily. “Signs show that companies are ramping up spending.”

The recent telecom overhaul establishes a new regulatory body that will apply regulations on dominant competitors in order to increase competition and give Mexicans better access to more affordable telecommunications services. In fact,the reforms are expected to reduce the amount that Mexican consumers have to pay for phone service,while increasing innovation to foster a more information-based economy in Mexico.

“These reforms are creating a more market-oriented economy in Mexico,” University of Texas economics professor Tom Fullerton told Investor’s Business Daily. “And the business sector is responding.”

Other proposed reforms currently working their way through congress include labor changes,education legislation and opening Mexico’s energy sector up to even more outside investment.

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