On January 17, 2025, the Mexican Telecom Regulator (IFT in its acronym in Spanish) authorized the state-owned electric utility of Mexico (Comisión Federal de Electricidad, “CFE”) to acquire a 23.08% stake in Altán Redes, marking a pivotal moment in Mexico’s regulatory landscape.
IFT’s decision is important not only because of the conditions imposed in a minority shareholding acquisition, but also because it may represent one of the last decisions to be issued by the IFT.
Following the constitutional reform in Mexico in November 2024, the “IFT” will cease to exist in its current form in 2025, with its responsibilities redistributed between a forthcoming specialized competition authority and the Agencia de Transformación Digital, both under the Executive Branch. However, all the decisions adopted by the regulator until then, are legal and enforceable.
From an antitrust point of view, the IFT’s decision is relevant because it imposes behavioral and structural remedies to the acquirer in a minority acquisition that doesn’t provide control over the target.
Altán, a telecommunications operator, holds a wholesale concession and is tasked with the deployment and operation of the Shared Network (Red Compartida in Spanish). This initiative provides wholesale telecommunications services, including connectivity for mobile telephony and Internet access. As a public-private partnership, the Shared Network focuses on building a robust telecommunications infrastructure to help close Mexico’s digital divide.
The CFE is a state-owned utility company responsible for the control and development of the national electric industry. The economic interest group (EIG) of the CFE also provides services in the telecommunications and broadcasting sector. In particular, it provides access to its passive infrastructure and offers retail mobile telephony and Internet services on a non-profit basis. These services operate under the framework of the CFE Telecommunications and Internet for All (CFE TIT) initiative, which seeks to enhance digital connectivity across the country.
The regulator has imposed conditions on this operation to ensure neutrality, competition, and equitable access within the telecommunications sector. These measures are designed to foster a fair and open market environment. Key remedies include:
- Guaranteed neutrality: Altán Redes and CFE must provide non-discriminatory access to wholesale telecommunications services, ensuring fair treatment for all market participants.
- Operational independence: Altán Redes will maintain autonomy in its decision-making processes to minimize market distortion risks. Compliance programs and periodic audits will be implemented to uphold this independence.
- Divestiture of CFE’s Wholesale Activities: the CFE must stop providing wholesale activities and cease to operate as a telecommunications service provider. This is to guarantee that CFE won’t have any influence over how Altán operates the Shared Network.
The parties have now 20 days to accept these conditions or the acquisition will not be cleared. CFE and Altán could also challenge the IFT’s decision in court if they deem the conditions to exceed what is proportionate to achieve the goal of ensuring network neutrality and equal access.
