OTHER DISCIPLINES

Red Compartida or Shared Network constitutes the last hope of the Mexican Government to increase telecommunication services coverage, promote competitive prices and enhance the quality of services. Certainly, it creates the last hope to put forward a real competitor to the portentous public networks developed by Telcel (the largest mobile operator) and Telmex (the largest fixed line operator) in Mexico. Both companies pertain to América Móvil Group, whose major shareholder is Carlos Slim. Although, AT&T has informed of investment goals to develop its network in Mexico, much work is needed to put in place a robust network. Briefly, the main features of this stirring project will be commented.

The network will operate as a wholesaler and will provide services to other concessionaires or authorized entities as Mobile Network Operators (MNO), the Fixed Network Operators (FNO) that wish to venture into the mobile network market and the Mobile Virtual Network Operators (MVNO).

The Red Compartida aims at optimizing the use of the assigned spectrum of 700 MHz band; reducing the costs and increasing coverage in isolated regions. This project requires an approximate investment of US $10 billion for the following 10 years. It shall commence to operate in 2018. Private investment will be essential to materialize this hope. Thus, a private company or a consortium of companies can tender.  It should be noted that now, Mexico has opened the door to foreign investment in the field of telecommunications and this project may be fully carried out by foreign investment. This is a significant advantage that may enhance the economic conditions of interested bidders, strengthen the capacities of consortiums, add valuable experience and create ferocity among bidders so that they may present the best tenders to win the project. 

The Government will award a public-private partnership contract (PPP Contract) to design, finance, deploy, operate, maintain and commercialize the wholesale telecommunications services through the network.  This will be carried out by the use of the radio electric spectrum including the segments from 703 to 748 MHz and from 758 to 803 MHz, with a total of 90 MHz under a lease structure and, if applicable, a pair of fiber optic strands of the main (backbone) network.  

The Developer shall annually pay for the execution of the PPP Contract, as a compensation for the lease of the spectrum as an amount equivalent to the total rights for the use, profit, and exploitation of the bands.  The Developer will also be responsible for all the costs and the financial resources required for the design, installation, deployment, operation, maintenance and upgrading of the Red Compartida. The Developer shall provide all the real state as well as movable property, rights, infrastructure, equipment, authorizations, licenses, permits, rights of way, and other physical, human, financial or any other kind of element required to successfully achieve the purpose of the project. A Wholesale Concession will be granted to the Developer. 

Other important obligations of the Developer consist of: (i) obtaining all permits, authorizations, rights of way or use of passive infrastructure, environmental impact assessment necessary for the project; (ii) paying for the maintenance of the pair of strands (filaments) of fiber optic; (iii) complying with all contributions and obligations of the PPP Guidelines; (iv) share with the Government a portion of the income.  A trust will be created by the Developer. The trust shall include a Reserve Fund to guarantee the Offered Coverage. 

This Shared Network is headed by the Mexican Ministry of Communications and Transport (Secretaría de Comunicaciones y Transportes “SCT” by its acronym in Spanish) in coordination with the Federal Telecommunications Institute (IFT). On June 29, 2016, the Bidding Guidelines were published in the Official Gazette of the Federation. 

Some important dates shall be taken into account:

1)On March 18, 2016 the Authority shall answer inquires and provide with clarifications. The deadline for the reception of inquiries and clarifications is March 11.

2)On May 3rd or 4th 2016, bidders shall appear before the IFT to request a Competition Opinion.

3)On August 8, 2016, proposals shall be submitted 

4)On August 16, 2016, the results of the technical aspects evaluation will be released

5)On August 24, 2016 the project will be awarded.