1. Regulatory Challenges for MVNOs in Latin America: A Mexican Perspective Dr. Víctor Pavón-Villamayor Director-General for Prospective Regulation Federal Telecommunications Commission, Mexico MVNOs Industry Summit Latin America American Chamber of Commerce, Sao Paulo, Brazil 29 May 2012

2. 2  MVNOs in Mexico are currently treated as resellers. Mexican MVNOs Overview Permits for Mobile Telephony Resellers in Mexico 2009-2011  There are conditions for the emergence of a strong MVNO market in Mexico:  The market is not saturated: 85% mobile penetration  There is a huge pre-paid market segment.  Regulatory environment: New Guidelines for Telecom Contracts (PROFECO).

3. 3  Is there any need to have a more robust & updated regulation for MVNOs in Latin America?  Will MVNOs be better/worse off after the implementation of these new regional regulations? Challenges of MVNO Regulation in LATAM Identification of a Market Failure Optimal Regulatory Tool Benefit > Cost

4. 4 Focused Reform Approach 2 nd Layer of Number Portability in the Regulation Portability MVNO right to be treated as “user” for portability purposes Elimination of the lock-in of MVNOs with respect to their initial “host” choice Numbering MVNO right to have its own numbers blocks Direct Allocation / Authorized Reallocation / MVNO-only allocation to MNOs Better user´s management is correlated to better market performance

5. 5 Global Reform Approach Some issues to be addressed Free-Use Radio Spectrum MNO Wholesale Offer: Pricing should include “lost profits” of access? Competition Concerns: MNO Market Power should be extended to MVNOs? MTRs, MVNOs & Asymmetry