Control of Altán by CFE will lead to a new Pemex, they warn

The federal government has always shown an interest in rescuing Altán Redes, the firm in charge of the Red Compartida project, since the company is essential for connectivity objectives by having spectrum and infrastructure suitable for remote areas, particularly where there is still no internet, so if López Obrador and his successor’s plan were to fail, it would be undermined. So it is better to control it.

But analysts consulted by Expansión agreed that controlling Altán can only lead to a new Pemex. Dominating the operation of Altán will imply more of a financial burden for the State than support, because it will have to pay and negotiate the debt of the Red Compartida with its creditors and at the same time continue with the subsidy applied to mobile telephone service rates through CFE TEIT.

The State has so far provided two financial supports to Altán. The first was in 2022, when the federal government, through the national development bank, granted an investment of 161 million pesos for its continued operation. The second aid came in September of last year when Bancomext and Nafin, arms of the national development bank, approved new financing of up to 100 million dollars.

“I think we are already facing a new Pemex. This is the third time that the government will rescue Altán and we only have partial information about what is being done in connectivity. Neither Altán nor CFE TEIT provide public data,” said Salomón Padilla, a telecommunications expert and vice president of the Association of Independent Telecommunications (ATIM).

Carlos Lerma, CEO of Altán Redes, assured Expansión last March that the company is in a moment of tranquility, thanks to the fact that the company has managed to subscribe 11 million users, which means almost double what it reported in 2022. This progress has caused the company to project a possible financial equilibrium during this year, added to the fact that the Development Bank has injected a new credit of 100 million dollars. However, this media has not been able to access documents that can support this information.

“Unfortunately, we have not been able to learn the business plan of Altán or CFE TEIT, as well as the income that both companies have generated in the last two years, something that could give us perspective on their performance. And now we only know that the government is seeking to leverage itself against a company that has a large debt due to its financial restructuring and for which we also do not know how the payment will be made,” said Jorge Moreno Loza, a lawyer specializing in telecommunications.

Greater market distortion

The mobile market has also changed since the government decided to bail out Altán. In the last two years, the Red Compartida company has granted greater network capacities to CFE TEIT and the Mobile Virtual Network Operators (MVNOs), especially Bait, resulting in affordable plans for users. This has resulted in large operators such as Telcel, AT&T and Telefónica facing difficulties in replicating the rates and plans of their competitors.

América Móvil is one of the companies that has even filed a lawsuit against Altán for alleged anti-competitive practices related to the sales rates for connectivity services offered in particular by Bait, Walmart’s MVNO.

And now this situation could get worse with CFE TEIT’s control over Altán, since the state-owned company would have more favorable conditions to access the Altán Redes Shared Network, such as not paying for the infrastructure and thus depredating rates, that is, imposing lower prices in the mobile market, and that other companies cannot replicate those offers, something like what Bait does.

Analysts said that to avoid market problems such as those already occurring, the Federal Telecommunications Institute (IFT) will need to monitor and review the regulation of CFE TEIT as well as the concession of Altán Redes to avoid barriers to competition in a sector that is facing several economic challenges due to the large investments required for the network and infrastructure and changes in user consumption habits that have reduced operator profits.

“The regulator is a key piece for the change that the government is seeking. It has to be reviewed whether the company will still be public-private or only state-owned, as well as determining the issue of supervision of the milestones of the Shared Network, since now the government will be both judge and party. But especially the issue of network and infrastructure sharing between the state-owned company and Altán must be reviewed to avoid problems in mobile operations because this can greatly affect the market, which is already complicated,” Moreno said.

Expansión requested information from the IFT regarding the new regulatory implications that government control over Altán would require, but the request had not been answered until the publication of the text.

The government has a clear conviction to save Altán so that it can form part of its connectivity plan, but especially because it will allow it to operate and compete in telecommunications. This industry has become a strategic point for the States thanks to the thousands of data that are transported through the networks of the companies and which are the new oil of the governments. However, before achieving this objective, the State must settle an enormous debt and avoid competition problems in the mobile market.