1. Mónica Aspe Bernal Head of the Information Society Office Ministry of Communications and Transportation monica.aspe@sct.gob.mx @maspeb First North American Sustainable Economic Development Summit Energy, Infraestructure, Transportation, Logistics and Border Facilitation Las Colinas – Irving, Texas www.reformas.gob.mx

2. 2 Reforms in Action www.reformas.gob.mx

3. Much has been done in the past 20 months. Mexico has the lowest tax take in the OECD as a percentage of GDP: a fiscal reform has started to broaden its sources of revenues. Measures to shake up the telecoms and broadcasting industries last month prompted America Móvil to announce it will divest assets to avoid antitrust pricing regimes. Teachers will face more scrutiny, banks more competition… The Economist, 2014. Much has been done in the past 20 months. Mexico has the lowest tax take in the OECD as a percentage of GDP: a fiscal reform has started to broaden its sources of revenues. Measures to shake up the telecoms and broadcasting industries last month prompted America Móvil to announce it will divest assets to avoid antitrust pricing regimes. Teachers will face more scrutiny, banks more competition… The Economist, 2014. 3 www.reformas.gob.mx

4. During President Peña’s administration 11 constitutional reforms have been promulgated. The objectives of these reforms are: 1.To increase productivity to boost economic growth in the country 2.To reinforce Mexicans’ rights 3.To strengthen Mexico’s democratic regime The legislative phase of the reform process is now completed. Next comes implementation 4 Reforms in Action www.reformas.gob.mx

5. Enables domestic and foreign firms to drill in deepwater fields and shale beds. Existing regulators to be strengthened. Access to broadband is recognized as a constitutional right for all Mexicans. Creates new competition authorities. Increases sanctions for offenders. Reforms in Action Energy Telecommunication and Broadcasting Anti-monopoly 5 Increases tax collection base, cuts tax loopholes. Fiscal www.reformas.gob.mx

6. Reforms in Action Encourages the creation of jobs through more flexibility. Establishes better working conditions for Mexicans. Introduces evaluation of teachers in order to improve standards. Creates a unified criminal justice model that ensures that all Mexicans will be judged with the same procedures. LaborEducationUnified Criminal Justice Procedures 6 Improves competition among Mexico’s banks. Strengthens development banks. Banking www.reformas.gob.mx

7. Reforms in Action Strengthens this instrument so that Mexicans can rely in an effective tool to defend their fundamental rights. Allows reelection of members of Congress. Increases oversight of local elections. Strengthens the right of access to public information and promotes accountability. New Injunction Law (Habeas corpus) PoliticalTransparency 7 www.reformas.gob.mx

8. 8 Telecommunications and Broadcasting Reform

9. 9 Mexico had been left behind in telecommunications Source: World Economic Forum, Reporte Information Technology 2013 The development of the telecommunications sector in Mexico has not been enough to improve productivity and welfare of the population Infrastructure and digital content Network Readiness Subindex World Economic Forum www.reformas.gob.mx

10. 10 Diagnosis “The welfare loss attributed to the dysfunctional Mexican telecommunication sector is estimated at USD 129.2 billion (2005-2009) or 1.8% GDP per annum.” OECD, Review of Telecommunication Policy and Regulation in Mexico Inefficient legal and institutional framework High level of concentration -In telecommunications and broadcasting one single group concentrates 70% of the market Weak competition Poor level of infrastructure development High prices (among the highest consumer prices in the OECD) Low take-up of services www.reformas.gob.mx Causes

11. 11 Low Investment Levels Source: OECD Communications Outlook 2013 Public Investment in Telecommunications (per capita) 2009-2011 www.reformas.gob.mx

12. 12 Mobile Broadband Penetration To be compared with OECD countries may be a ambitious, however the result is not different if we are compared with Latin American countries. www.reformas.gob.mx Source: World Bank, 2012

13. 13 www.reformas.gob.mx Constitutional Reform To reverse this situation, the Federal Government with the support of the main political forces in Mexico, implemented a radical change in the legal framework of the sector

14. 14 www.reformas.gob.mx First Positive Outcomes Elimination of long distance calling fees in mobile and fixed line (January 2015). Customers will be able to switch phone companies without additional charges and in less than 24 hours. Devices must be unlocked. Free Internet Access in 250,000 parks and public places (currently up to 45,000). Users will be able to check their cell phone balance without charges. Prepaid cellular phone balances will now be good for one year and not just two months. Strong sanctions for agents that obstruct competition The independent regulator (IFT) is now in full operation. Specialized telecommunications courts are now in full operation. Anti-trust regulation for dominant agents in telecommunications and broadcasting has been issued. Direct foreign investment is now allowed (100% telecom; 49% broadcasting).

15. National Wholesale Backbone (including CFE´s fiber optic network) Wholesale Open Access Mobile Network (700 MHz Band) México Conectado: Open Internet access to all public schools, health centers, libraries, parks Main initiatives to achieve universal access Transition to Digital Television (TDT) MexSat Mexican Satellite Constellation The Mexican Government is currently implementing the most ambitious infrastructure projects in the history of telecommunications in the country. They total an investment USD 14 billion. www.reformas.gob.mx Telecommunications Infrastructure Projects 15

16. 16 Coverage and capillarity: from 25,000 km to 60,000 km Access points: from 114 to more than 900 Redundancy: through other rights of way (highways, railways, oil pipelines) Wholesale: open and non discriminatory network. Fosters competition, does not compete Investment: USD 758 million P del Carmen Nuevo Laredo León (m) Saltillo Aguascalientes Guadalajara Silao Celaya Querétaro Yautepec Texcoc o Tula Pto. Vallarta Tepic Mazatlán Durango Gómez Palacio y Torreón Nogales Hermosillo Guaymas Cd. Obregón © Navojoa Los Mochis Guamuchil Culiacán © Cd. Juárez Ensenada Reynosa Matamoros Cd. Victoria Altamira © - Tampico Acapulco Veracru z Oaxaca Cd del Carmen Campeche Cárdena s Mérida Cancún Coatzacoalcos © Zacatec as Chihuahua Orizaba Xalap a Poza Rica Tuxtla Gutiérrez © Morelia Monclova Chetumal Delicias Parral Minatitlán (No) Tecate Camargo Cd. Cuauhtémoc P Peñasco Caborca Sta. Ana Cananea Nacozari Casas Grandes Agua Prieta La Paz Cd. Constitución San José del Cabo Cabo San Lucas P. Negras © Sabinas y Nva. Rosita Uruapan L Cárdenas V de Bravo Salina Cruz Juchitán M Romero © Villahermosa Tapachula © Manzanillo ColimaPuebla Moctezuma Topolobambo Linares Cd Guzmán Ocotlán Irapuato Zamora Escárcega Monterrey México San Juan de los Lagos Fresnillo Guanajuato National Wholesale Backbone www.reformas.gob.mx

17. Wholesale network (4G) with national coverage on the 700 MHz band Public Private Partnership No restrictions for foreign capital investments Public buildings available for installation of infrastructure Coverage for over 95% of the population Reduce entry barriers for the mobile broadband market Promote competition both in infrastructure and services Benefit consumers through internationally competitive prices Estimated investment: USD 10 billion Open Access Mobile Network 17 www.reformas.gob.mx

18. Guarantee the Constitutional right of access to information. Liberalize the 700 MHz Band by December 2015. Aid almost 14 million low-income households through the distribution of smart-ready TVs. Provide households with a better signal & audio TV, plus a larger diversity of contents. Provide the digital devices needed for the Regulator´s tender for two national TV channels. Generate energy consumption savings (twice the daylight savings time) Can be used as smart TVs for Internet access. Estimated investment: USD 2 billion Transition to Digital Television TDT is an innovative policy for developing countries, where a large part of the population doesn´t have the economic resources to substitute their analogue TV for a digital one. 18 www.reformas.gob.mx

19. Mexico Conectado will: Provide free broadband Internet access to all public schools, health centers, libraries, parks and other public buildings in the country (aproximately 250,000) by 2018. Reduce service costs by aggregating demand. Use any technology based on a cost-efficiency criteria. Install hotspots in unserved and underserved areas. Provide an access platform for the e-government, e-health, e-education and open data initiatives in the National Digital Strategy (EDN). Estimated Investment: USD 1.5 billion Mexico Conectado 19 www.reformas.gob.mx

20. 20 www.reformas.gob.mx National Infrastructure Program The National Infrastructure Program will position Mexico as a Global Logistic Platform, taking advantage of its privileged geographical position and its free trade agreements with 44 countries. The goal is to transport people, goods, services and data efficiently and safely through the US-Mexico border. Telecommunications reform & infrastructure initiatives 46 new highways Double our ports capacity by 2018 8 new passenger railroads including 3 high-speed railroads Mexico City’s new airport The National Infrastructure Program totals an unprecedented investment of USD115 billion. The reforms will fuel Mexico´s economy. A stronger economy will require these logistics and transport platforms in order to reach its full potential.

21. www.reformas.gob.mx Thank you Mónica Aspe Bernal Head of the Information Society Office Ministry of Communications and Transportation monica.aspe@sct.gob.mx @maspeb