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Photo credit: Richard Branson by D@lY3D Abdelmaksoud

#HackTelecomMexico is a series of posts exploring the new Telecom Bill, in discussion at the Mexican Congress. You may follow the series here http://mexicanlawblog.com/tag/hacktelecommexico/

Virgin Mobile announced the launch of a MVNO in Mexico by Q2 2014 partnering I-New (“MVNO-in-a-Box”) and under the infrastructure of Telefonica, Recently, Virgin announced the appointment of Cecilia Vega as CEO, so the launch is pretty close.

Telefonica has been backing a few MVNOs like Maxcom and Coppel, but since December 2011, I have been following the launch of Virgin Mexico, which I consider a key metric of this market.

The arrival of a new mobile (even a MVNO) will put some pressure on quality and prices to current operators. Virgin Mexico could ignite a series of effects to the industry. These are some possibilities:

1. A British Invasion. Big telecom companies like BT and BBC have operations in Mexico. However, the successful landing of Virgin Mobile could validate the market for other UK telecom companies. Think Cable & Wireless, Easynet, Thus, Vodafone, Freeview, BSkyB or ITV. Virgin, BBC and BT could escalate business, too. After all, there are some tenders like TV and satellite, rulings and other conditions that could make Mexico attractive to them.
2. The Resellers Revamped. Resellers have been an on/off discussion for regulators and operators. A MVNO is a reseller of mobile minutes under its own brand. The authorisation of Virgin could force IFT to issue an upgraded regulation for resellers, and find an appropriate model. Resellers are pushed by operators, competitors and customers. They indirectly invest in active telecom infrastructure, and need to profit from the network under fair conditions. An ignition to the reseller market could happen if regulation learns to read the market.
3. The Talent is back. This phrase of Richard Branson could inspire this market: “Train people well enough so they can leave, treat them well enough so they don’t want to”. Before 1997, long distance service was exclusive to Telmex. Many companies invested into the market to get a juicy share. Not many survived the IP and P2P. Sunken investments did not stand a chance to get a ROI. Same happened in other services. That, combined with lack of competitive conditions and other factors led to M&As, bankruptcies and talent rotation. Some talent went indie or rogue. Training was left behind. Now, market is growing and law is opening opportunities, so things could change. A mix of veterans and rookies is a to-do for any company trying to grab the market.

These possibilities need big data validation. However, the sole fact of a major brand jumping into Mexican market, makes the investors wonder: Should this market be invested?


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