Mixed Messages From Mexico
The Mexican telecoms reforms of 2013 and 2014 were inspired by a dubious perception that Mexican telecoms were lagging far behind modern developments, by an excessive confidence in what competition can bring about in markets with strong economies of scale and by unrealistic expectations about what economic regulation can achieve in such a setting. As I set out in this article, the results thus far are a crusade against the incumbents under the banner of competition, a spiral of regulatory intervention with increasing costs and diminishing returns, and a creeping erosion of the incentives that private operators are left with to invest in the expansion and upgrading of their networks. The reforms may well turn out to be counterproductive, and fail to address the real challenges facing the industry.
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