Satellite industry income grows due to AMLO’s connectivity plan

Revenue from the satellite sector has increased. In 2018 the industry invoiced 20 million pesos, while at the end of 2023 it reported sales of 1,288 million, according to data from the Federal Telecommunications Institute (IFT). This increase is due to the fact that the CFE subsidiary has found an ally in private satellite companies to provide it with the capacity to provide connectivity services in remote areas.

One of the companies that has capitalized on this trend is Starlink, positioning itself as the most relevant player in this segment, thanks to the three contracts it has won with the state-owned CFE Telecomunicaciones e Internet para Todos. Only one of the agreements won by Elon Musk’s company amounts to a minimum value of 778,039 million pesos up to a maximum of 1 million 556,000 million pesos, valid until December 31, 2026.

The government has shown a preference for Starlink internet, due to its greater network capacity. The company itself has explained that its service provides fiber-like connectivity in remote locations, making it ideal for eliminating the digital divide and in times of climate crisis.

However, the other companies in the sector have not lowered their guard to win contracts from the state company. For example, Globalsat signed an alliance with Starlink to win two agreements with the state-owned CFE TEIT to provide connectivity to remote sites, but the amount of the agreements was not detailed.

Stargroup, a strategic partner of HughesNet, is another satellite company that signed a contract with CFE Telecomunicaciones with which up to 8,000 WiFi access points have been enabled in remote areas.

Until now, there is no clarity on the budget that the state telecommunications company allocates annually to the leasing of satellite capacity, but data obtained via transparency by Expansión detail that it allocated 752 million pesos to Elon Musk’s Starlink alone in 2023.

But Claudia Sheinbaum’s government seeks to change this story. The president wants to reduce dependence on foreign satellite companies by integrating a Mexican satellite into the connectivity system.

The Digital Transformation and Telecommunications Agency will be the agency in charge of materializing the president’s plan. Expansión requested information from José Merino’s Agency about the budget it plans to allocate to Sheinbaum Pardo’s objective, but until the publication of the text it did not offer comments. Within the expenditure approved to the Agency for 2025, the amount that will be allocated to the satellite plan is also not detailed.

Jorge Moreno Loza, a lawyer specialized in telecommunications, considers that the bet of launching a satellite is interesting, but it would imply large investments for the government, so the option that the State should maintain is collaboration with satellite companies, but accompanied by a national development plan that envisions not only connectivity, but other industries and activities that could benefit, such as agriculture in a context of climate change.

“Telecommunications are a medium that touches all sectors of the country, which is why it is important that satellite connectivity be seen not only as a way to connect, but as a possibility of promoting the economic development of all the productive sectors of the country,” he said. the specialist.