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Mexico: Telecom Reform Promotes Competition as America Movil, Televisa Battle for Leadership

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A new telecommunications law in Mexico passed almost unanimously at the end of April, paving the way for fundamental reforms and creating a wide range of opportunities for operators to invest and grow, according to a new report from Pyramid Research.

"Penetration rates for most services are below where Mexico's GDP levels suggest they should be," says Jose Manuel Mercado , Senior Analyst at Pyramid Research.

"In no sector is this more evident than the mobile sector, where penetration rates at year-end 2012 were roughly 30 percentage points below the regional average," he explains.

The competitive structure of the market is largely to blame for this situation, as the market has proven difficult for challengers from a profitability perspective. New regulations included in the telecommunications law recently approved by the two houses of the Congreso seek to address this situation by creating an environment that would promote competition and, by extension, give investors more financial flexibility to sustain a business, according to the report.

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Tags: america movil  televisa  Mexico