The new wholesale mobile network in Mexico considered a model for South Africa

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South African regulators want to emulate Mexico’s new wholesale mobile network to an extent. The network could have 20 contracts in place with private-sector operators by the end of 2018. South Africa’s Electronic Communications Amendment Bill, which recommends the creation of a wholesale open access network that will give smaller operators and new entrants an advantage, is ready to be presented to parliament.

The bill which is aimed at boosting competition and lowering connectivity costs, states Vodacom and MTN will have to open up their network to rivals. Mexico’s version of a wholesale national network, has already signed 13 groups to buy capacity from the network.

The project manager and head of Mexico’s Telecommunications Investment Promotion Agency, Fernando Borjon said “there has been a lot of interests, we will probably have more contracts, I guess in a month”. Mexico’s Red Compartida shared network is a public private partnership operated by Altan Redes consortium- which has investors including Morgan Stanley and the International Finance Corporation.

Borjon notes that of Mexico’s three operators, AT&T was considering buying capacity from the wholesale network  and Telefonica had already signed a contract. He admitted dominant operator, America Movil, whose grip on the market regulators are trying to reduce, has been forced to open its network up to competitors and the wholesale network. The company’s market share has decreased from 82 percent to 70 percent.

In addition to proposing a wholesale access network, South Africa’s Electronic Communications Amendment Bill notes that a service provider with significant market power or at least 25 percent of the country’s network infrastructure, must share its infrastructure with competitors.

According to the bill, the Independent Communications Authority of South Africa will prescribe the acceptable rates the large operators can charge their rivals.

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