Mexico's Fixed-line operators without a mobile license such as Axtel and Alestra could become mobile virtual network operators (MVNOs) to offer a convergent service offering, reports Signals Telecom Consulting. The limitation on bandwidth caused by delays in the tendering of new spectrum places Movistar in an attractive position to reach agreements with fixed-line operators seeking to expand their service offering.
The report describes this trend as replicability of the offering: adding mobile services to their current service portfolio of telephony, Internet and in some cases PayTV.
"Increased competition over bundled services will be the reason fixed line operators will opt for an MVNO model for the deployment of mobile services. Examples such as that of Maxcom could be replicated by Axtel with the aim of implementing services that ensure the loyalty of customers with a higher purchasing power. It is clear that an MVNO agreement between Axtel and Movistar could be the prelude to acquisition of this fixed line operator by Telefonica," stated Elias Vicente, Senior Analyst for Signals Telecom Consulting and author of the report.
The result of upcoming spectrum tenders could act as a catalyst for greater interest in the development and launch of new MVNOs.
"The high cost of logistics, advertising and customer acquisition limits the number of players who can enter Mexico's mobile market as new operators. Nevertheless, the possibility of seeing Televisa incorporating mobile services to its offering, either directly or in association with another market operator would increase the pressure on all Pay TV operators not forming part of Yoo! In addition, both Axtel and Alestra would encounter a deterioration in their competitive position in the residential sector due to their inability to quickly match offerings from the cable operators, which in addition to their higher residential broadband speeds, would be incorporating data and mobile telephone services. Lastly, unlike the situation in the Brazilian market, we do not note companies from outside the telecoms sector, such as Liverpool, Sanborns or Elektra, venturing into the market as MVNOs, in some cases because of the high cost of competing against Telcel and Movistar and in others because these companies already have a relationship with some of the MNOs present in the market," added Jose F. Otero, President of Signals Telecom Consulting.
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