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Spanish incumbent Telefónica is taking a decidedly different approach to improving connectivity in Mexico.
January 26, 2024
The telco has partnered with US-based blockchain company Nova Labs to launch the latter's Helium Mobile Network of decentralised Wi-Fi hotspots.
Instead of an operator spending millions on building a hotspot network, Nova Labs encourages people to do it themselves by purchasing one of its access points from its Website, plugging it into their home broadband connection, and switching it on.
In return for providing coverage, customers are rewarded with Nova Labs' native cryptocurrency, MOBILE, which is tradeable on various exchanges. The more a hotspot is used, the more crypto it earns, incentivising people who live in busy areas to deploy access points, and by extension ease network congestion where it is felt most acutely.
Nova Labs' community-driven approach to network deployment also includes LoRaWAN-based IoT networks, and with the emergence of CBRS spectrum, it has also branched out into offering 5G coverage solutions, signing up first Dish, and then T-Mobile US.
When it comes to Mexico though, all parties – including Mexico's telco watchdog, the Instituto Federal de Telecomunicaciones (IFT) – are taking things slowly.
First up, this is not a fully-fledged launch of the Helium network in Mexico. The partnership will give Nova Labs an opportunity to effectively conduct a commercial trial so it can evaluate performance and customer satisfaction and go ahead with a big launch at a later date.
As a result, only a limited number of customers in Mexico City and Oaxaca will get the opportunity to deploy Helium hotspots.
Similarly, Telefónica's Movistar unit will offer access to a select group of customers. It has also developed a proprietary management solution. This will serve the dual purpose of routing traffic from Helium hotspots to Movistar's core network, and controlling access to Helium by seamlessly authenticating eligible users via their SIM card.
Furthermore, for now this is most definitely a Wi-Fi-only solution. According to Nova Labs, Helium's outdoor Wi-Fi hotspots have been approved for use by the IFT. Indoor Wi-Fi and CBRS radios have not.
"Telefónica is exploring ways to expand coverage through innovative, lower-cost, cooperative-based solutions. This programme in Mexico is critical to evaluate performance and customer satisfaction of this solution and its associated costs," said José Juan Haro, chief wholesale and public affairs officer at Telefónica.
Indeed, the operator is having to work overtime to compete profitably with America Movil. In 2022, it completed its migration to AT&T's network in Mexico, and returned its spectrum to the regulator, saving it a fortune on spectrum licence fees.
Its customer base is on the rise though. In Q3 of last year, postpaid subscribers increased 21 percent year-on-year; however, revenue was down 4.4 percent due to lower handset sales and termination rates.
Innovative solutions like the Helium network might allow Telefónica to add wireless capacity without having to fork out for network infrastructure.
So, despite the tentative nature of this partnership, it does offer a certain degree of promise for Telefónica, which also has half an eye on other markets.
"Our expectation, if successful, is to incorporate this into our portfolio of mobile networks in the different countries of the region," said Haro.
Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.
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