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Telefónica hoping to take on big players in Mexico’s internet market

Mexico City, Mexico — Company Telefónica is hoping to increase its presence in Mexico by offering better internet speed to users.

Taking on more experienced players such as Telmex, Televisa, Megacable, Totalplay and Axtel, the Spanish company wants to increase the number of fixed household broadband in the country, which current stands at 49 percent.

Mariano Hansen of the Home Internet project of Telefónica says the company would also offer better speeds and higher quality to users. The opportunity is not only in increasing the low number of households with fixed internet, but also in the speeds that are offered.

“The speeds offered in the packages give us a business opportunity for the future digital age 100 percent. Having a single service of easy access and more internet penetration will help to reduce the digital divide quickly,” he commented.

Their pilot project is currently being tested in Toluca and will eventually be tested in other cities such as Tijuana, Guadalajara, San Luis Potosí and Apodaca. The Telefónica pilot will evaluate which markets have the greatest potential for the service, which could formally start at the end of the first quarter of this year.

For experts, the fixed broadband market potential is still important if one takes into account that internet in Mexico homes is low.

From an analytical perspective, this bet represents a challenge for Telefónica since Telmex and Televisa lead the market with 56.2 and 22 percent, respectively followed by Megacable with 14.7 percent of the market. Totalplay also come in with 4.2 percent, Axtel with 2.5 percent of the market and Maxcom with just 0.5 percent.

Claudia Benassini, a researcher and telecommunicaitons expert at La Salle University, said that Telefónica’s new commitment is a complicated challenge given that the company will enter a segment that it doesn’t only not know, but is also very competitive.

Rogelio Espinosa, an expert consultant in telecommunications, said that a concessionaire such as Telefónica could seek to deploy infrastructure in places where competition is not as high, although he sees that the strategy is aimed at having expenses that do not involve investing.