Telia Carrier is popping up everywhere
21 June 2018 |
Telia Carrier has recently launched points of presence in Mexico, Serbia and Rome. CEO Staffan Göjeryd talks the move into Mexico and what is next for the carrier
The opening up of some elements of the Mexican telecoms market from an oligopoly to a more competitive landscape means the door is open for the international carrier community to enter.
That is the view shared by Telia Carrier CEO Staffan Göjeryd as Capacity sit down with him at ITW to discuss the company’s latest expansion – a point of presence (PoP) in the city of Queretaro, just north of Mexico City.
With a population of more than 120 million people and a growing demand for broadband services, Mexico offers a “significant market opportunity” for Telia Carrier, Göjeryd tells Capacity. He adds: “If you look at Telia Carrier and the footprint we have in the US, we have positioned ourselves near the border crossings a couple of years ago so we’ve been addressing a lot of the Mexican customer base from those different locations, whether it is there or in the California area. Most of the major players are someone we already have a relationship with today, but it has reached a point where we need to go in market.”
New regulations in Mexico and the launch of the Red Compartida wholesale wireless service are set to drive broadband penetration, though a recent report from the Federal Telecommunications Institute (IFT) said that the smaller markets still lacked options in this space.
Göjeryd explains that Telia has already had numerous requests from both companies based in Mexico, but also from existing international customers, most notably on the over-the-top content side, who wanted the carrier to expand directly into Mexico.
“That’s the logic for us in terms of expanding there and it is a close proximity to where we have our network footprint, so a lot of the logic is that it is a vibrant market going through a lot of changes, including deregulation,” he adds. “That gives a lot of opportunities, with smaller players popping up.
You can’t serve them from outside the country – you have to be in it.”
Why enter now? Göjeryd says that, although Telia Carrier won’t be going directly for the 4G space following the launch of Red Compartida, the general regulatory environment in the country, driven by policies introduced by president Enrique Peña Nieto which aims to uproot monopolies, is favourable.
The privatisation of Telmex in 1989 produced a huge and sorely needed investment in Mexico’s telecommunications networks, but the decision not to open up the market to new competitors led to a powerful monopoly.
In March, the IFT approved a plan to separate part of Telmex - America Movil’s fixed-line unit - into new companies. Its network includes telephone poles and copper cables, which transmit fixed-line calls, mobile data and internet.
Göjeryd says: “We’re not playing in the 4G space but the general sentiment of trying to deregulate many different markets plays into our decision. That is why the timing for this is very good for us. So far it has been a very conscious move from the Mexican government to deregulate many different sectors – it was definitely a factor for us to enter now, rather than earlier.”
This hasn’t been the only expansion for Telia Carrier recently. It also announced its first PoP in Serbia, offering greater reach and IP services for customers in the Eastern European market, and a new PoP in Rome.
“There are two different ways we look at expansions,” he explains. “One is extensions from where we are – we have network footprint that ends in country A and country B is the next one, so we can look at expanding there. But there are a lot of other factors to consider.”
The other is “where we see major shifts in the underlying cost structures” often driven by subsea cable systems into certain markets. If a market stops being cost prohibitive, it “could be fair to build out and try to make a business from it without putting too much money on the table”, he adds.
“Ambition-wise, we are trying to make sure everyone can be connected but certain markets can still be very locked down, especially when you’re doing what we’re doing in terms of IP transit traffic. A lot of markets are opening up more and more and there are more sea cable systems that are being developed so other markets become interesting for us.”
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