Telecoms infrastructure prioritised to support economic growth in the State of Hidalgo

Internet access is a constitutional right in Mexico, and while penetration rates are gradually increasing, the latest survey from the National Institute of Statistics and Geography suggests that Hidalgo has some work to do to improve connectivity. In 2017 the state ranked 22nd out of 32 nationally for the share of its population that used the internet (59.3%), while it ranked 24th in terms of its percentage of residents using mobile internet on a smartphone (46.8%). As of 2017 around one-third of Hidalgo’s homes were equipped with internet, while two-thirds of residents had a mobile phone.

The government is working to ensure that the population has access to high-quality internet and phone connections, and that the necessary infrastructure is in place to support investors. Indeed, the OECD cites internet connectivity and accessibility as “major challenges to boosting competitiveness in the state”. The Secretariat of Economic Development of Hidalgo has accordingly added ICT to its list of strategic sectors. “Mexico has the most work to do in the OECD when it comes to telecommunications,” José Luis Romo Cruz, secretary of public policy of Hidalgo, told OBG. “We cannot start talking about Industry 4.0 or become an economy of the future if we do not have strong telecoms infrastructure and connectivity.”

Improved Framework

As in many sectors, delays in rolling out infrastructure represent a major sticking point for telecoms progress. In particular, differences in how municipal governments treat telecoms companies across Latin America often mean projects take longer than expected or are not completed at all. “The expectations of local governments and private companies are often not aligned. There is little communication, and tariffs and processes often differ across municipalities,” Gabriel Székely, managing director of the National Telecommunications Association (Asociación Nacional de Telecomunicaciones, ANATEL), told OBG. “We have been taking measures to achieve true dialogue between different parties and improve conditions for investors.”

To this end, in September 2018 the state brought together its 84 municipalities to evaluate the recommendations of the Ministry of Communications and Transport and the National Commission for Regulatory Improvement regarding a new framework for telecoms infrastructure. The scheme proposed a series of changes to simplify municipality regulations. Zempoala was the first municipality in Mexico to approve this legal framework in November 2018, seeing the authorisation of telecoms infrastructure in seven days. Yahualica, Xochiatipan, Tula de Allende, San Agustín Tlaxiaca, Huejutla de Reyes and Huasca de Ocampo soon followed.

National Recognition

In June 2019 ANATEL gave Omar Fayad Meneses, the governor of Hidalgo, special recognition for his “significant contribution to facilitating the rollout of telecommunications infrastructure”. According to ANATEL, the state’s efforts to create an efficient regulatory framework are “unprecedented” and will greatly benefit its citizens, as well as set an example for the rest of the country. “We decided to recognise Hidalgo because this small state with relatively limited resources is fast becoming a leader in Mexico,” Székely told OBG. “We are sure that further investments will follow, and that Hidalgo will be able to provide concrete examples of success for the rest of the country,” he added. As of June 2019 ANATEL members had already agreed to invest MXN179m ($9.3m) in the state. In the same month Hidalgo signed an agreement with American Tower Corporation to facilitate the US company’s infrastructure investments in Hidalgo. This is a clear priority: according to Székely, Mexico needs to double its number of base stations to meet demand.

Furthermore, Hidalgo has made 3773 government plots of land available for antennas or boosters since 2018, meaning that one out of every three in the country is located in the state. Hidalgo is also launching a digital government platform, which it hopes will save MXN100m ($5.2m) per year. This will help to combat corruption and reduce government response times.