In April 2024, Telcel’s parent company, América Móvil, filed a complaint with Mexico’s Federal Telecommunications Institute (IFT) accusing Altán Redes—Mexico’s wholesale mobile network operator—of anti-competitive practices. The claim centered on Altán allegedly favoring Walmart’s mobile virtual network operator (MVNO), Bait, with preferential conditions. However, in October, the IFT dismissed the complaint, finding no violation of Altán’s concession terms or competition laws.
The IFT’s decision is undoubtedly a setback for Telcel, but also for other competitors like AT&T México and Telefónica, since Bait could continue growing in the Mexican telecommunications market through Altán.
Regulatory factors are added to the analysis, such as those derived from the constitutional reforms of December 20, 2024, which, among other things, will transform the IFT into two new agencies: the Digital Transformation and Telecommunications Agency, which will handle regulatory matters, and a new authority (yet to be defined) in competition matters, which will absorb the powers over competition in the telecommunications and broadcasting sectors (as was the case before the 2013 constitutional reform). The issuance of new laws in both telecommunications and competition is also anticipated.
Bait has grown exponentially. By the third quarter of 2024, it had reached 15.1 million users, becoming the fourth-largest mobile operator in Mexico. This expansion represents a major challenge for Telcel, which holds about 66% of the mobile internet market and generates quarterly revenues close to USD $2.9 billion. Note: other operators might also be losing customers.
We observe that Bait’s rapid growth could be related to its integration within Walmart’s ecosystem, offering possibly more affordable mobile plans through its network of nearly 3,000 stores. This model allows it to leverage Walmart’s distribution channels and customer base, with the potential to reshape the competitive dynamics of the sector. At checkout, while paying for your groceries, they offer you a Bait SIM card.
However, the IFT’s decision cannot be considered a definitive relief for Bait, as both Telcel and AT&T México have expressed concerns that the relationship between Altán and Walmart could lead to market distortions. Here we make a hard stop to point out that, as a result of the December 2024 constitutional reforms, it is expected that the State (in this case through Altán, as it is a state-owned enterprise) cannot and should not distort the market. Thus, this new law could impose stricter requirements on public-private partnerships like Altán’s.
In this regard, recently (in February 2025), Mexico’s first woman president, Claudia Sheinbaum, acknowledged the concerns regarding Altán and Walmart, stating that her administration would review whether the partnership complies with competition regulations.
As has been noted, the proposed legislative changes could alter the regulatory landscape. The new economic competition legislation would require that state-influenced companies, like Altán, compete on fair terms and refrain from receiving government subsidies or preferential treatment. It should also be considered that Walmart’s continued expansion in telecommunications remains a key point in the industry. At the beginning of 2025, Bait surpassed 18 million users and is expected to enter the postpaid market, which will further intensify competition. Meanwhile, Telcel is exploring strategies to counter Walmart’s growing influence, including potential partnerships with other retailers such as Chedraui and Soriana.
