This article was contributed to technology news website “techcrunch.com” by columnist, content producer, critic and author Ira Brodsky, who has written five books about technology and founded Datacomm Research in 1989.
Twenty years ago only one out of 10 people in Mexico had a telephone of any kind. Today, more than 100 million people (out of a population of roughly 125 million) have cell phones and, more amazingly, more than 70 percent of those are smartphones. To keep up the torrid growth, scrappy competitors are offering smartphones for every budget and plans that let users choose right from their handsets which services they want and how much they want to spend.
Three factors have catapulted Mexico’s mobile industry into the 21st century. First, Mexico has grown into the world’s 11th largest economy (in terms of purchasing power) in just the last two decades. Second, millennials are Mexico’s largest demographic group (they make up more than half of Mexico’s online population) and they want and expect what their counterparts in developed countries have. And third, the towering presence of a company that Mexico’s government considers a monopoly in both the landline and mobile markets has spurred its smaller (though not unsubstantial) competitors to be more inventive and aggressive.
That monopoly is the creation of a man who for four years in a row was ranked the world’s wealthiest individual, Carlos Slim. His flagship business, America Móvil, is one of the largest telecom concerns in the world, with operations in nearly 30 countries.
The telecom titan controls roughly 80 percent of Mexico’s landline market and 70 percent of its mobile market. The Mexican government has been trying unsuccessfully for years to break up Slim’s empire. However, his mobile competitors aren’t waiting for that to happen. Instead, they are challenging the status quo that America Móvil is struggling to preserve by bringing innovative technology and business models to Mexico’s mobile market.
Mexico’s second largest mobile operator, Telefónica, is shaking up the market by offering users a more modern solution for purchasing and managing mobile services. As the fifth-largest mobile operator in the world, Telefónica has the financial assets and know-how to give America Móvil serious competition. The company introduced a new service, branded as Movistar On, in response to the rampant confusion and frustration among consumers that it discovered through intensive market research.
Telefónica partnered with Silicon Valley-based ItsOn to build Movistar On around that firm’s cloud-client platform. “Cloud-client” is the architecture of choice among internet phenoms like Amazon and Uber. The cloud component enables the operator to quickly introduce new services, while the client piece gives users the self-service functionality that millennials crave. The combination enables Telefónica’s marketers to engage subscribers directly, presenting them with timely offers and closely tracking their choices.