Mexican Government Takes Control of Atlán Wireless Network
By KELIN DILLON
On Friday, June 10, Mexico’s federal government announced its acquisition of wholesale wireless network Altán Redes – a move that will save the company from bankruptcy – as part of Mexico’s initiative to provide the entire nation with internet access.
This marks the first time the administration of Mexican President Andrés Manuel López Obrador (AMLO) has intervened and rescued a company from bankruptcy, three and a half years into AMLO’s term.
The takeover agreement was signed on Thursday, June 9, giving Mexico the majority stake of Altán Redes through a debtor-in-possession financing structure for $388 million, 41 percent of which comes from development banks, though the company will remain a public-private partnership.
“Altán Redes was bankrupt, They were given loans from Nacional Financiera in the past six-year term and we made the decision to provide a resource that is going to allow us to have internet in all towns, as it already belongs to the nation and to the Mexican state,” said López Obrador during his daily morning press conference on Friday, June 10. “The state is the majority shareholder and already has jurisdiction over the the management and the administration of the company.”
“This achievement supports the viability of the shared network, a project that fosters economic and telecommunications development in Mexico,” said Altán Redes at the time, referring to AMLO’s initiative to provide free WiFi access throughout Mexico’s public places and thoroughfares.
As of the time of acquisition, Altán Redes offers service to 56 markets and more than 79 million people, including hundreds of thousands of small towns.
Though the potentials of the deal have been highly touted by AMLO and the Mexican government, industry experts are less enthused about the move, pointing to Altán Redes’ contentious economic viability and the likelihood that the company will require a secondary multi-billion-dollar bailout down the line.
Similarly, experts have raised concerns about AMLO’s appointment of Carlos Lema Cotera to head the company, despite his minimal experience in the telecommunications sector.
“The government proposed Carlos Lema Cotera to be in charge of Altán Redes, who does not have the experience to operate a public telecommunications network with the challenges that lie ahead,” said Gerardo Flores, a member of the Telecommunications Law Institute (IDET). “It seems to me that the government has placed itself in a situation where a new bailout will be necessary.”
Moreover, Flores said that “in the next administration there will be a second rescue and the infrastructure of Altán Redes will end up being wasted.”
“From now on, I can say that this telecommunications company is a black hole that will absorb public resources obtained from the taxes paid by citizens, he said.
In congruence with the Altán Redes initiative, the Mexican government’s Telecomunicaciones e Internet para Todos (CFE TEIT) will continue to attempt to deliver internet and mobile service to 60 million people across the country.