In recent years, Chinese telecommunications companies have expanded their operations globally, and Mexico is no exception. In late 2022, China United Network Communications Group — known as China Unicom for short, received a 30-year permit from The Federal Telecommunications Institute (FTI) to operate in Mexico, marking a significant milestone in its global expansion. How did this state-owned company — one of the largest telecom companies in China, secure its permit, and what does it mean for Mexico’s telecom industry?
It’s important to understand that the Mexican telecommunications industry is highly regulated. Companies must comply with strict regulations set forth by the Mexican government, including requirements for investment, infrastructure, and service quality, among other things like demonstrating financial stability and technical capabilities to obtain a permit to operate.
For China Unicom, obtaining a permit was a process that involved significant investment and planning. According to CommsUpdate reports, the company first submitted for a permit in March of 2022; it was accepted four months later by the IFT, and went public in late October. China Unicom, which holds around 155 million mobile customers, also had to work closely with local partners to ensure that they could provide the necessary infrastructure to support their operations in Mexico’s fixed and mobile markets. The endeavor could be an investment in Mexico’s telecom infrastructure over the next few years, boosting economic growth. This commitment is crucial in winning over regulators and partners in securing the necessary permits.
“IFT’s concession title for commercial use said China Unicom may offer data transmission, capacity provision, dedicated links, commercialization of capacity and services owned by other concession-holders, and “any telecoms and broadcasting service that is technically feasible, considering the required infrastructure and transmission means, it is own or by third-parties.”
“El Economista reports that the operator aims to begin its operations in Mexico with a focus on dedicated links and data transmission capacity in the enterprise space, with an eye towards expanding into developing fiber optic networks.” – El Economista
Focusing on providing customers with high-quality services in Mexico also supported the company’s success. China Unicom is committed to delivering fast and reliable internet and mobile services where many of Mexico’s existing telecom providers have struggled, allowing it to differentiate itself from competitors and win over customers and regulators.
Overall, granting a 30-year permit to a Chinese-based telecommunications company is a significant development in the Mexican telecom industry. It shows that there is room for new players in the market, and that regulators are willing to work with foreign companies to promote competition and investment in the industry. It also highlights the importance of investment and infrastructure in securing permits and winning over customers. For those in the telecom industry, this development should be a wake-up call to stay competitive and focus on delivering high-quality services to customers.