# Speedtest® Market Report

### Mexico

#### Published September 8, 2016

Mexico’s telecommunications industry has seen significant change since new regulatory reforms were enacted in 2014. The reforms paved the way for more competition between providers and carriers, resulting in greater choice for consumers as operators battle for the highest speeds and largest market share. Mexico’s telecom industry has been anything but void of excitement as a result. We saw a year-over-year increase in June 2016 of average download speeds in Mexico’s fixed and mobile broadband markets of 48% to 20.44 Mbps and 76% to 16.19 Mbps, respectively. Upload speeds have improved significantly as well showing a 73% increase for fixed broadband to 11.03 Mbps and a 108% increase for mobile to 9.49 Mbps. With this continuing trend of a more competitive and diversified market, the coming years will likely be marked by more progress and consumer-focused competition.

## Speedtest by Ookla: Over 9 billion tests and counting...

### The Definitive Source for Internet Metrics

Speedtest is the most popular and trusted way to measure internet performance. Using Speedtest, consumers can accurately test their connection speeds from any of their devices at any time, whether in their home, at work, or on the go. Speedtest doesn't rely on background testing that surreptitiously collects data at the wrong times, or use drive testing that only collects data where cars can drive. Insights from Speedtest are always based on actual internet speeds experienced by hundreds of millions of consumers around the world.

Hundreds of millions of users worldwide

Over 8 million tests
every single day

5,000+ geographically distributed servers

Measuring both
broadband & mobile

### Mexico Fixed Broadband Speeds

### Report Stats

#### TEST COUNT:

13,054,655

#### 1-YEAR CHANGE (DOWNLOAD):

48 %

#### 1-YEAR CHANGE (UPLOAD):

73 %

### Mexico Mobile Speeds

### Report Stats

#### TEST COUNT:

1,051,614

#### 1-YEAR CHANGE (DOWNLOAD):

76 %

#### 1-YEAR CHANGE (UPLOAD):

108 %

The telecom landscape in Mexico has gone through quite a few changes in the past few years. The Telecom Reform of 2014 was meant to loosen the stranglehold that Telmex and Televisa had on the industry by forcing them to give competitors access to their infrastructure, as well as uphold a regulatory landscape that would promote competition. As a result, there have been a slew of mergers and investments meant to give companies a stronger position from which to compete in this new marketplace.

In the beginning of 2016 one of the top telecom companies in Mexico, the Monterrey-based Axtel voted to approve a merger with data service provider Alestra, giving it access to greater infrastructure and more favorable economies of scale moving forward. Also in 2016, AT&T completed its brand transition in Mexico after the acquisitions of both Iusacell and Nextel. For most of 2015, AT&T operated both companies under their old monikers.

The long term effects of these mergers and investments remain to be seen, but what the data in this report shows is that, in the short term, consumers are already benefiting from improvements in service as ISPs and carriers compete for customers. The level playing field the Telecom Reform created has made for a more competitive marketplace is seen by the general increase in speeds since last year of over 40% improvement in download speeds for fixed broadband and over 70% speed improvements for download speed in mobile.

One important consumer trend is that while Mexico has shown enormous growth in internet usage year after year, with a majority of that growth in mobile internet usage. The Mexican Internet Association (AMIPCI for its Spanish name) published its 2016 report in May that stated a whopping 77% of those surveyed use the internet on a smartphone as compared to a fixed broadband connection. This has been driven in no small part by an aggressive push by several mobile carriers to give away free, low-end, prepaid Android smartphones in order to get people hooked on buying data buckets. For most people in Mexico, smartphones are far more accessible than PCs or laptop computers.

### Mexico Fastest ISPs

### Download

#### FASTEST: Axtel

Axtel is the overall fastest ISP nationwide and trounces the competition in multiple major markets in Mexico. The company has invested heavily in strategic mergers in the past 10 years that have given it access to a supremely robust infrastructure which they’ve leveraged with great success.

### Upload

#### FASTEST: Axtel

As with download speed, Axtel outshines its competitors on upload speeds as well. The additional infrastructure has allowed the company to improve network speeds overall. These high speeds make Axtel an easy choice for gamers or VoIP users.

For years Mexico seemed stuck in “just enough” ISP connection speeds. 5-15 mbps, just enough to get HD streaming content, just enough to for some online gaming without terrible lag, and just enough to convince ourselves that there was “High Speed” internet. For example, in Q1-Q2 2014, average download speeds in Mexico were just 12.11 Mbps as compared to today’s average of 18.19 Mbps. Latency shrank in the same time period from 65 ms to 49 ms. Although, there is still some room for growth considering Mexico is 65th in the world on fixed broadband download speeds.

When we look at the “fastest” ISP results - which shows the top tier of all residential connection speeds - it becomes clear that even the fifth place finisher would have been considered “fast” only a few years ago. Mexico can finally say it has moved beyond “just enough,” and in the case of the winner, warped right past it.

Axtel is this report’s fastest ISP with blistering 155.01 Mbps download and 127.99 Mbps upload speeds, and with an almost imperceptible 2 ms latency. These are the sort of results you need for 4K streaming, PS4 remote play, and Smart Homes. It bodes well for consumers that this quality of connection is available in Mexico, albeit at a greater cost. It’s also shockingly far ahead of it’s nearest competitor.

Second place is held by Totalplay, which shows up with an 88.28 Mbps download and 19.39 Mbps upload speed. The company invested $400 million since February 2015 to make technology improvements to their network. Totalplay, which is active in 20 cities in Mexico, already offers fiber-to-the-home. But similar to other providers in Mexico, they are looking to enhance their customers’ triple-play experience with other services that attract new subscribers. They recently launched GameFly, which allows online gamers access to streaming video games, and have gone so far as to make their network available to competitors’ video streaming services in order to boost content provided to customers.

Moving to the third place ISP, izzi, we drop down towards less surprising connection speeds compared to Mexico’s countrywide speed averages: 31.58 Mbps download and 4.88 Mbps upload. izzi, which is owned by Televisa, the largest television network in the Hispanic world, used to be known as Cablevision before it was relaunched with a flashy new brand and more competitive fees when compared to marketshare leader Telmex (also owned by América Móvil). izzi when pronounced by spanish speakers sounds a bit like “easy.” Televisa has recently launched its Netflix competitor called “Blim” which has a preferential price for izzi customers. The service, however, has been mocked relentlessly for offering a subpar catalogue stocked mostly with Televisa’s own content (primarily soap operas). izzi also ran afoul of Mexico’s Federal Telecommunications Institute (IFT) in May for ad campaigns that “Did not provide the public with complete and accurate information on the services provided.” izzi claimed it offered “3 times faster internet” and was forced to pull the ads.

Fourth place goes to Megacable, a regional carrier that has a presence in 25 states of the Mexican Republic. The past two quarters, Megacable notched a 29.39 Mbps download and 8.99 Mbps upload. Megacable, along with Televisa’s izzi, used to offer a “Triple-Play” option under the YOO brand which they’ve had to divest themselves of in order to avoid further fines from Mexico’s Federal Telecommunications Institute (IFT). They had already been fined for similar “collusion practices” in 2014.

#### HOW SPEEDTEST MEASURES FIXED BROADBAND

ISPs offering fixed broadband services are ranked based on top speed performance, which is determined using the 90th percentile of the download and upload speeds, or Top 10%, of each ISP’s Speedtest results. While many ISPs offer various service tiers, our aim is to determine who is fastest by showing the performance achieved by each residential ISP’s top tier. These speeds represent customers who subscribe to faster service tiers and provide an accurate view of the top-end performance of a given ISP. It is important to note that customers subscribing to higher tiers will generally pay more for their service than the average subscriber. For purposes of this report, only Top Providers in a given location were included in the analysis. Each ISP that accounts for at least 3% of the total sample size in the geographic area are included as a Top Provider. When analyzing Mexico overall, we use the average speed, as it represents the experience of a typical consumer in Mexico. When comparing ISPs individually, we use top speed performance, as it represents the performance a consumer could reasonably expect to receive if they subscribe to one of the ISP’s higher tiers of service.

Lastly, Telmex Infinitum is in fifth place with a 19.81 Mbps download and 5.51 Mbps upload speed. Telmex is a wholly owned subsidiary of América Móvil and is still the dominant fixed line provider, in terms of subscribers, in the country; a position it used to become the largest ISP in the country despite severe competition from several other companies. Telmex does have one thing in common with its competitors. It also ran afoul of the Mexico’s Federal Telecommunications Institute (IFT) for the same reason as izzi. Telmex promised “unlimited” service with their Infinitum brand and were also forced to pull the ads.

These above results all represent the top tier speeds for all the ISPs. As such, it’s worth taking a quick gander at what connection speeds providers’ average customers’ experience. Using average speeds, the rankings don’t change. Axtel remains fastest ISP with a mean connection of 50.10 Mbps download and 48.44 Mbps upload, which trumps their competitors’ fastest connection speeds. AT&T registers at 32.04 Mbps download and 9.67 Mbps upload speeds, but when we move beyond second place we find ourselves in the familiar “just enough” territory. Third place izzi has mean connection speeds of 18.92 Mbps download and 11.25 Mbps upload, which is roughly half of its top connection speed performance. Fourth place Megacable isn’t drastically worse than izzi with 16.75 Mbps download and 5.91 Mbps upload. The dominant industry player, Telmex Infinitum, shows that despite improvements made, the vast majority of people in Mexico who connect to the internet through their service do so at speeds that are serviceable. An average connection supporting 10.38 Mbps download and 3.00 Mbps upload will not be able to provide access to any next generation technology.

### Mexico Fastest Mobile

### Download

#### FASTEST: Telcel

Telcel is an absolute behemoth whose very existence led to the telecom reforms that have transformed the industry nationwide. They have the largest network infrastructure, control 69% of the market and have committed to investing $6 billion dollars over the next 3 years. However, they’re clearly not a company resting on their laurels. Telcel has not only managed to keep up with the demands on their network, but also offer the fastest mobile download speeds nationwide, and in many major markets in the country.

### Upload

#### FASTEST: Telcel

Telcel’s huge network infrastructure has ensured that they can provide the fastest upload speeds on a modern device also. These overall speeds are faster than what some of the ISPs offer on a typical speed connection.

There is a natural cynicism facing politicians in Mexico these days, but in viewing the results of the 2016 Speedtest Market Report, even the most cynical citizen would have to acknowledge that the Telecom Reform of 2014 does seem to have yielded one clear result: service and speed of the carriers in Mexico have improved across the board - an improvement of year-over-year download speeds of 77% and upload speeds even more with a 108% increase.

Competition, it seems, begets greater investments. AT&T has committed to investing US$3 billion by 2018 in Mexico, which is on top of the US$4 billion it spent acquiring Iusacell and Nextel. The investment will allow AT&T to compete with its much larger rival, Telcel, as well as meet the commitments made in order to gain regulatory approval for those acquisitions.

Telcel is in a drastically different situation. It has 72 million mobile-phone customers compared to approximately 8.9 million for AT&T in Mexico. Telcel controls roughly 69% of the market and has strong incentives to limit its own market share growth in order to avoid being in violation of the Telecom Reform, which prohibits the dominant operator from growing. That said, Telcel has also announced heavy investments in Mexico, totalling US$6 billion over the next 3 years; the focus being on providing better service to urban markets that are the most profitable and increasing coverage of their LTE networks to 200 cities nationwide.

The final carrier to mention is Spanish firm Telefonica’s Movistar. They are the second largest carrier in the country, controlling some 22% of the market. They’ve stated that they recognize the competitive changes in the market with AT&T’s arrival, but feel that Telcel should be the one worried by the competition, not them. By way of comparison, Movistar invested US$402 million from 2014 to 2015, a paltry sum compared to the aforementioned investments.

Given this panorama, it’s unsurprising that Telcel is the fastest mobile carrier in this report. It clocks in at 16.62 Mbps download speed and a 9.86 Mbps upload speed; an improvement over the 14.63 Mbps download and 8.49 Mbps upload speed they had in Q4 2015.

In second place, AT&T is nipping at Telcel’s heels with 14.21 Mbps download and 7.79 Mbps upload speeds. What is remarkable about this score is its ranking comparison over the course of 2015.

#### HOW SPEEDTEST MEASURES MOBILE CARRIERS

The top mobile carriers in Mexico are ranked using the average download speed of “Modern Devices” - those devices that are capable of connecting to the fastest, broadly-available wireless networks. In Mexico, this means devices capable of 4G LTE. This ensures we provide an accurate view of the typical performance a user can achieve using a modern smartphone or tablet on a given mobile network. Top carriers are those that each account for at least 3% of the sample size in the geographic area. When analyzing the country as a whole, we use the mean value of all cellular results to account for the typical user. However, when analyzing individual carriers, we look at “Modern Devices” to account for top speeds available in Mexico.

In Q1 2015, AT&T, which was still operating mostly on the Iusacell network without the integration of Nextel’s assets, had an abysmal last place ranking of 3.88 Mbps download and 1.23 Mbps upload speed. By Q4 2015, AT&T had improved to 3rd place with an 8.04 Mbps download and 4.78 Mbps upload speed. This year’s ranking shows a remarkable improvement that has allowed it to bump Movistar from its traditional second place status.

Movistar’s relatively low amount of investment is showing in its overall network performance. Its network ranked third with a 9.22 Mbps download and 4.82 Mbps upload speed. Not terrible, but hardly enough to compete on performance with Telcel and AT&T, who both show double-digit download speeds. This is all happening at a time of change for Telefonica (Movistar’s parent company); Cesar Alierta stepped down as CEO of the company after 16 years earlier this year and has been replaced by José María Álvarez Pallete, the former COO. Despite the change in management, Movistar did have a good quarter in Q1 2016 - the Spanish multinational gained 760,000 subscribers compared to 566,000 subscribers for AT&T and a net loss of 200,000 for Telcel. This shows how competitive the market in Mexico is despite connection speeds.

## City Leaders

## Market Summary

Mexico’s telecom industry is clearly in a state of pronounced evolution spurred by the Telecom Reform of 2014. The government rightly recognised that without sweeping changes in the regulatory landscape, there weren’t sufficient incentives for the large investments needed both in mobile and landlines to give the country a 21st century infrastructure. In a country with a vibrant startup community and a society that’s a voracious user of social media, these improvements are fundamental.

In the ISP space, Axtel is clearly leading the way and has set the bar so high that one can only hope other providers will manage to follow suite. A 155.01 Mbps download speed would have been unthinkable as recently as 2014. If Axtel can manage to keep growing while maintaining this level of speed, they’re clearly the ISP to beat.

Mobile carriers will also be jockeying for position both in terms of connection speed, but also nationwide coverage and subscriber numbers. América Móvil’s Telcel has the most to lose here and must play an aggressive game of both defense and offense in order to fend off AT&T’s entry into the market by holding onto its current customers while seeking new ones. In a period where the US dollar is strong against the Mexican peso, AT&T has a significant advantage over Telcel by virtue of having a well-established presence in the U.S. and a balance sheet that generates revenue in USD.

It’s an interesting time in the Mexican telecom industry - the fiercer the battles between carriers and ISPs, the better off consumers are. So here’s hoping we see some legendary battles in the coming years. We are looking forward to better, faster and, hopefully, cheaper services.

This report was written by Luis Sosa.

### Powered By

## Speedtest Intelligence

Speedtest Intelligence is a comprehensive business intelligence platform, providing the unparalleled ability to analyze network performance for any location or service provider around the globe. It is trusted as a vital research and analysis tool by businesses and governments worldwide.

Speedtest Intelligence has the data science built-in, taking advantage of Speedtest’s expertise in measuring and evaluating internet performance data. Since the work is already done, you can avoid collecting, storing and aggregating Speedtest data.

For more information visit Speedtest Intelligence.