Red Compartida is a public-private partnership (PPP) wholesaler shared network project led by the Mexican government throughout an international tender process. It will generate to Mexico a private investment of more than 7 billion dollars along the entire project to design, deploy, operate and maintain a new 700 MHz network. The PPP is signed between ALTÁN Redes, as the private investment and network operator, and the National Agency of Telecommunications Promotion (Promtel). Both parties are holders to the radio spectrum concession.
Red Compartida will significantly improve the footprint coverage of wireless voice and data services in the country; this, through a 4G-LTE & 5G ready network built to reach 92.2% of the population, including regions that up until now have been neglected by traditional carriers.
At the same time, Red Compartida will promote more competitive prices, transforming the telecommunications sector in Mexico and seeking the economic and social progress of the country. It is a pioneering project for Mexico and of international interest.
This new infrastructure will give retail operators the option to use wireless and voice bandwidth to existing and new customers.
How long the radio spectrum concession will last and how much investment will be applied?
The initial concession is set at 20 years with the possibility of an extension of the same term. Investment is an estimated 7 billion USD of private and development banking funds to reach the 92.2% coverage goal.
What percentage of Bandwidth cover are you going to guarantee?
92.2% of Mexicans will have access to the best communication technology available worldwide.
In what period will Red Compartida reach its total coverage?
The network will be deployed in different phases:
March 31st, 2018: 30% of Mexico’s population.
Year 3: 50% of the added population and 50% of the Pueblos Mágicos.
Year 4: 70% of the added population and 75% of Pueblos Mágicos.
Year 5: 85% of the added population and all of Pueblos Mágicos.
Year 6: 86.6%
Year 7: There will be full coverage of the population to which the plan offered (92.2%).
How is the rent for external operators going to work?
Red Compartida will rent the mobile network 4G-LTE use capacity with a transparent and non-discriminatory price, available for all the mobile solicitants. Additionally, Red Compartida will be able to give other services to the virtual mobile operators, supporting their deployment, development and operation.
ALTÁN Redes objective is to develop an environment of suppliers who can give Red Compartida’s services, including the virtual mobile operators, from standard to specialized services.
Why did you choose the public-private association model for this project?
The public-private association model is the best one to encourage an asset given by the government, as is the radioelectric spectrum, but it also requires an additional strong inversion, which can only be worked with the private initiative.
What does the Red Compartida project adds to the competition at the telecommunication sector in Mexico?
Red Compartida will offer a new major infrastructure with national bandwidth cover of 700 MHz in 4-LTE technology, plenty based in IP Protocol and prepared for 5G. Among all the benefits for the market’s competition we have:
A biggest competition and dynamism in the sector
Assures a neutral infrastructure disposed for every retailer, from the ones that already exist, to the ones that will be created, with or without a network on their own, which will allow a biggest and better competition between the services suppliers and the final consumers.
It will eliminate the entry barriers for new competitors and the growing barriers for the actual ones.
What will it be the impact of this project to Mexico’s economy?
It will transform the telecommunications Mexican industry, providing a vanguard and competitive system from which the citizens and the industries of the country will be beneficiated.
It will allow the economic development of the industry: generating more jobs and a productivity rise, while the sector expands.
It will improve the access to services such as bank, health and education, among others, for the population segments in Mexico which are now excluded from this benefits. This way, economic activities will be multiplied in areas that are left behind.
All this activity is going to produce substantial incomes for the Secretariat of Finance and Public Credit (SHCP)
What is the decisive added value in the ALTÁN Redes offer?
The ALTÁN Redes has various partners with some of the following characteristics:
Experience in the telecommunication industry in competitive environments.
Demanding, competitive, and responsible
Financial Capacity and management that allows them to delve through such a competitive project.
Permanent focus, local and industrial accountability and transparency.
Besides from the experience in the development and operation of similar projects, ALTÁN Redes has local and international first level partners with experience in the telecommunications sector and a long-term commitment with success.
ALTÁN Redes presented from the very beginning the necessary resources for the Red Compartida development, overcoming the amount that the competition required, and immediately available to completely develop the project adjusting to the bases that the bidding needed. This resources include the capital given by the shareholders and the different international and local financing compromised by diverse entities.
Why did you decide to bid for Red Compartida?
We bid because we trust in the expertise the ALTÁN Redes partners offer to the sector. Multitel specializes in these type of projects, identifies and develops infrastructural opportunities around the world, in addition to having an expansive and successful trajectory within the telecommunication sector, and lastly has had success generating returns for its stakeholders.
The reforms made by the Mexican Government accompanied by the solid economic foundation of the country make this an ideal moment to invest in Mexico’s telecommunication industry.
Which criteria did you follow when you selected the consortium partners?
We selected international top partners with a solid experience in the telecommunications industry and in the management of huge projects. In this way, we combined the knowledge of the business world and the worldwide -and specifically mexican – telecommunications industry.
Another criterion was the gathering of the best team, from human talent to the financial resources that are needed to manage such an ambitious project as Red Compartida is.
We wanted this partners to have permanency vocation and long-term implication, with a strong capacity to create value for all the stakeholders.
Does the Development bank participates in ALTÁN Redes? Why?
Development Bank was at disposition for all the consortiums which wanted to participate in the Red Compartida competition with a financing package to support the construction of a basic infrastructure for the country’s development.
ALTÁN Redes decided to use this package because it’s an excellent complement to the financing that both the partners and the debt suppliers of the private sector gave.
How is the fulfillment contract monitored and regulated?
El IFT will monitor and sanction the fulfillment of all obligations.
The Shared Network is regulated as follows:
Specified regulatory burden (unique concessionary title, concessionary tital on the radio electric band spectrum, APP contract).
Loan service telecommunication influence in the network operation.
Prices and tariff regulation.
Public offer of reference.
Regulation of the spectrum use-technical conditions of the band use-band segmentation.
How much money will ALTÁN Redes have to pay to the Mexican government from the Red Compartida incomes?
ALTÁN Redes will pay 1% of the Red Compartida incomes to the Secretariat of Finance and Public Credit every year.
Besides, it will annually pay the established rate for the use of the assigned spectrum, which is 400 million pesos approximately.
Additionally, Red Compartida will generate important incomes for the public reserves because of the direct and indirect taxes payment associated to the operation.