MEXICO CITY (WiMAX DAY) by Joachim Bamrud. While Mexico-based Telmex is busy pushing WiMAX in South America, it is losing ground to WiMAX competitors at home.

Telecom operator Axtel launched WiMAX services in certain areas of Monterrey (Mexico’s leading business city) early this year using equipment from Alvarion and Airspan. The company plans to expand its offering to other areas where it operates, according to Roberto Martínez, director for technology planning at Axtel. He declined to give more details on the expansion. But he stated that Axtel sees great potential for WiMAX in Mexico.

“It opens the possibility to offer multiple services that include mobility with economies of scale,” he says.

With a substantial network of towers in place throughout Mexico, Axtel can easily convert its network to use WiMAX, commented Adlane Fellah, a senior analyst at US-based consultancy Maravedis.

In August the launch of another WiMAX network was announced by Ultranet2go (a division of ZOMA Telecom of Mexico). They intend to launch WiMAX services in Veracruz and Aguascalientes, using equipment from Navini Networks. Future deployments are planned for markets in Tampico, Matamoros, Xalapa, Coatzacoalcos, Cuernavaca, Chilpancingo and Iguala.

Offshore WiMAX
Meanwhile, Mexican oil giant Pemex (Latin America’s largest company by revenues) is planning to use WiMAX to connect 10 offshore oil rig platforms in the Gulf of Mexico with its land-based corporate office. Pemex is using equipment and solutions from Redline Communications and AlanDick, a UK–based tower and antennae specialist.

“All equipment has been tested and is ready to install – but the platforms themselves are being built and have experienced development delays,” says Kevin Suitor, vice president for marketing and business development at Redline Communications.

The installation is now scheduled to be completed during the first quarter of 2007, but Pemex also plans to expand the use of WiMAX to include other remote oil drilling clusters and platforms later in the year.

Big potential, big challenges
Mexico is Latin America’s second largest economy, and has enormous potential for WiMAX. However, Mexico is also one of the greatest underachievers in the region, experts say. The Mexican telecom regulator Cofetel announced in March that spectrum for 3.6 to 3.7 GHz bands will be reserved for licensed use, while spectrum in the 900MHz, 2 GHz and 5 GHz bands will be available for unlicensed use.

Mexico had 2.9 million broadband subscribers by the end of June, according to the latest data from the OECD, released October 12. DSL broadband accounts for a 2.1 percent penetration rate, while cable broadband accounts for another 0.7 percent. The category that would include fixed wireless broadband lists zero penetration.

If Telmex decides to focus its WiMAX effort in Mexico, it may prove difficult for Axtel and other WiMAX start-ups, due to the capital resources of Telmex and their control of the market. According to Pyramid Research analyst Thomas Abreau: “It’s tough to compete with Telmex… Axtel is investing almost US$750 million dollars in WiMAX and DSL deployment [which] pales with what Telmex can do.”