Mexico opens up tender process for Red Troncal fibre network

The Mexican state-owned telecoms operator Telecomm has opened up bids for the development of a new wholesale fibre network.

The rules for the tender were published, with the winner expected to invest at least $200 million to access high-speed strands of fibre cable that belongs to Mexico’s Federal Electricity Commission (CFE).

Access to a second wholesale network which can directly compete with America Movil’s offering is a key part of telecoms reforms that aims to open up the Mexican market. Telecomm was awarded access to CFE’s network in 2015 and was told to develop a three-year development plan.

The plan, released by Telecomm, includes offering a public-private partnership with two high-speed strands of CFE’s cable on offer, making up part of a 25,000km network.

Interested parties have been given until 10 October 2018 to develop and submit their proposals, with submissions due to be adjucated on 24 October, and the PPP contracts ue to be signed by 23 November.

The successful partners will tasked with providing economic, technical, human, administrative and any other resourcs required to design, deploy and run the so-called trunk network (Troncal means trunk in Spanish).

The aim of the Red Troncal network is to provide fibre connectivity to more than 80% of Mexico (to within 35kms of a point of presence or interconnection point with the trunk network). Targets for potential bidders include providing 30% of coverage in under 18 months; 53.3% coverage within 30 months; and 80$ of coverage within 42 months (3.5 years).

The tender process will be open to investment from companies operating outside of Mexico. This follows a recent keynote from Mexico’s undersecretary of communications and transport Edgar Olivera Jiménez at Capacity’s Mexico Connect conference.

Olivera, who has overseen a major overhaul of Mexico’s telecoms sector as part of a bid to create more competitiveness, told a packed conference room that telecoms in the country was "on the fast track" for transformation.

Olivera concluded with a plea: "I hope Mexico Connect is a great event for you – please continue investing in our country.”

Mexico has already launched a wholesale network for 4G mobile services, Red Compartida, which was switched on in March, with its first partners announced last month. The services run on 700MHz spectrum that Altán Redes won more than a year ago to build and operate the Red Compartida – Spanish for "shared network" – in competition with América Móvil, owned by Carlos Slim, and AT&T’s and Telefónica’s local operations.