Digitalizati-ON!

Since the inception of the analog blackout project in 2013, Mexico has been making strides to improve its telecommunications sector, and 2017 looks to be a year for further evolution and improvement. In July 2014, the Federal Telecommunications and Broadcasting Law replaced the Federal Telecommunications Commission with the Federal Institute of Telecommunications Institute (FIT) as the regulating agency and competition authority for the telecommunications and broadcasting industries.

The law also included a digital switchover to be finalized by December 31, 2015. DTT offers higher picture and sound quality and supports more channels and features such as program guides and multi-language subtitles. More interestingly, DTT uses internet connectivity to offer viewers interactive television services like home shopping, e-banking, and e-government service.

The Ministry of Communications and Transport and FIT were responsible for implementing campaigns to distribute and deliver digital signal decoding and receiving equipment to enhance DTT penetration nation-wide with a focus on ensuring access for low-income households. Prior to the analog blackout throughout Mexico, the law requires 90% of low-income households to have decoding and receiving equipment for digital signals, providing a means to bridge the digital divide between more rural and poorer communities.
According to data from the National Institute of Statistics and Geography (INEGI), in 2013, 65% of the population had an analog television. The transition from analog to digital television meant that the federal government spent MXN28.4 billion (USD1.5 billion) on more than 10 million digital televisions. In 2016, Mexico—along with Brazil, Chile, Peru, Panama, and Puerto Rico—crossed the threshold of over 90% digital subscribers, according to Advanced Television. Conversely, Argentina, Bolivia, Guatemala, Honduras, Nicaragua have digital penetration rates below 60%. Regionally, DTT accounted for 85% of total television subscribers in 2016, and this figure is expected to reach 94% by 2022.

This transition makes Mexico the first LATAM country with completely digital broadcasting, reaching over 105 million people; but it also brings several environmental hazards. According to Greenpeace, the improper disposal of analog electronic equipment could lead to potentially hazardous electronic waste with the dumping of some 40 million old televisions containing lead, mercury, and other toxic materials. Greenpeace worked with the Ministry of Communications and Transport to minimize informal dumping and its negative environmental side effects.

Allocation of broadcasting frequency bands begins with the reallocation of the 700MHz band. According to FIT plans, this band will be reused as a complementary tool for companies of mobile phone services, allowing them to offer more competitive services at a better cost. Also, in May 2017, FIT announced the agreement to classify the 57-64GHz band for services such as communication between cellular radio base stations, temporary urban networks for coverage of massive events, delivery of high-definition video, and connection for smart homes and cities, also known as the Internet of Things.

FIT has been quite active in supporting a competitive environment for telecommunications and enforcing regulations. In June 2017, the Plenary of FIT issued a draft mandatory standard for the import, sale, and distribution of digital telecommunications equipment in Mexican territory, detailing minimum specifications and limits. Not to mention, FIT is drafting a methodology for gathering information to identify anticompetitive behaviors and to monitor shared networks’ adherence to competition neutrality principles. Currently, FIT is in the consultation period of drafting this methodology, and this phase will end in August 2017.
According to specialists, 2017 will be a year in which the telecommunications sector in Mexico witnesses additional progress. The tendering of 148 DTT stations as well as 191 FM and AM radio frequencies will change the landscape of radio and television in the country, causing the market to change and have greater competition.