Unlocking Mexico’s Digital Potential

Why It Matters

Without pro‑competition telecom rules and broader digital adoption, Mexico risks falling behind in productivity and inclusive growth, limiting its economic recovery and global competitiveness.

Key Takeaways

• Dissolution of independent telecom regulator (IFT) reduces oversight autonomy
• Mexico's spectrum fees rank among OECD's highest, deterring network investment
• ADTT-led digital government reforms cut procedural time and cost for investors
• Low digital skills and uneven local capacity hinder nationwide digital adoption
• SMEs generate >50% of GDP; digital support could significantly raise economic output

Pulse Analysis

Mexico’s economy has stalled for more than two decades, prompting policymakers to view digitalisation as a catalyst for renewed growth. The country’s vibrant cultural exports—exemplified by the Oscar‑winning film *Roma*—showcase the power of streaming platforms, yet most businesses and households still lack reliable, affordable connectivity. A modern, competitive telecommunications sector is essential for expanding broadband access, lowering costs, and fostering innovation across agriculture, manufacturing, and services. By addressing structural constraints, Mexico can tap into the productivity gains observed in other OECD economies that have embraced digital tools.

A pivotal obstacle lies in the regulatory framework governing telecoms. The 2024 reform that dismantled the independent Federal Institute of Telecommunications (IFT) and created the more government‑aligned Telecommunications Regulatory Commission (CRT) has eroded investor confidence. Independent regulators are linked to lower prices and higher service quality, while Mexico’s spectrum fees remain some of the steepest in the OECD, discouraging new entrants and leaving valuable frequencies idle. Restoring regulator autonomy, instituting merit‑based appointments, and shifting to lower annual spectrum charges—preferably through transparent auctions—could revive private investment, accelerate network roll‑outs, and bring rural communities online.

Parallel advances in digital government and skill development are equally critical. The Agency for Digital Transformation and Telecommunications (ADTT) has streamlined federal procedures, cutting processing times and costs for investors through initiatives like the One‑Stop Shop and Digital Window. However, uneven capacity across states, limited funding, and poor system interoperability threaten sustained progress. Targeted programs that combine digital‑skill training, financing, and advisory services for SMEs—responsible for over half of Mexico’s GDP—can bridge the adoption gap. Strengthening education curricula and lifelong‑learning pathways will equip the workforce to leverage emerging technologies, ensuring that Mexico’s digital potential translates into tangible economic inclusion and higher productivity.