Mexico’s emergence as a prime destination for nearshoring U.S. investment and supply chains is driven by its geographical proximity, skilled workforce, and economic integration through the USMCA. However, barriers to competition in the ICT sector hinder Mexico’s full potential in this regard. The country’s digital economy is on the rise, with a growing fintech sector and increased technology adoption in various fields. To fully capitalize on these opportunities, Mexico must address its ICT infrastructure and competition policy.
The ICT landscape in Mexico faces significant regional disparities in access to high-speed connectivity and investment. Urban households have better internet access compared to rural areas, leaving a portion of the population disconnected from the digital economy. Bridging this gap is crucial for inclusive development and attracting investment. While public programs like Internet para Todos aim to address this issue, enhancing sector competitiveness can further stimulate private investment and reduce the burden on state resources.
The establishment of the IFT in 2013 marked a positive step towards enhancing competition in Mexico’s telecommunications sector. The regulatory body has contributed to lowering consumer prices and reducing market monopolies. Despite these advancements, Mexico still lags in global ICT sector competitiveness rankings, primarily due to market concentration and limited investment compared to regional peers. Maintaining the independence of the IFT is essential for fostering a competitive environment and attracting private investment.
Under the AMLO administration, efforts to weaken the IFT’s regulatory power raise concerns about the sector’s competitiveness. Neglecting commissioner appointments and budget cuts have hampered the IFT’s effectiveness. Proposed reforms to dissolve the IFT and increase spectrum fees further jeopardize competition and compliance with USMCA requirements. High spectrum fees deter new entrants and limit market participation, hindering the expansion of telecommunications services in Mexico.
Promoting a competitive ICT sector is crucial for Mexico’s nearshoring prospects and economic growth. Enhancing the IFT’s independence aligns with USMCA provisions and boosts investor confidence. Empowering the regulator to issue consumer-centric regulations can lower market entry barriers and encourage private investment in underserved areas. A robust ICT landscape not only drives economic growth but also fosters digital inclusion and workforce development.
The incoming Sheinbaum administration presents an opportunity to prioritize ICT competitiveness and digital development. Key cabinet members like Marcelo Ebrard and Jesús Antonio Esteva Medina can influence policy in these areas. Sheinbaum’s track record of promoting digital transformation and international partnerships bodes well for advancing Mexico’s ICT sector. Strengthening the IFT’s role and affirming its independence will be crucial under the new administration to attract investment and achieve digital development goals.
In conclusion, fostering a competitive ICT sector is vital for Mexico’s nearshoring aspirations and overall economic prosperity. Upholding the IFT’s regulatory role, combating market monopolies, and expanding telecommunications services are key steps towards realizing Mexico’s potential as a nearshoring destination. By prioritizing ICT competitiveness, Mexico can drive inclusive growth, attract investment, and position itself as a leader in the digital economy.