Slow net drives Mexicans mad
By Andrea Mandel-Campbell in Mexico City
Published: October 4 2000 19:38GMT | Last Updated: October 5 2000 10:50GMT
Maria Elena Varela could spend hours chatting on the
internet, e-mailing friends or surfing the web. That is, if
she could ever get online.
Most of the time the 26-year-old waitress is either waiting
to log on or is frantically trying to reconnect after being
abruptly cut off.
"It just drives me crazy," says an exasperated Ms Varela,
who, fed up with the local cybercafes and unable to afford her own computer, has
virtually given up trying to hook up to the internet.
But she is not the only one being driven to distraction in Mexico by painstakingly
slow service and technological glitches that make it impossible to download
e-mail for days at a time.
Many of Mexico's more than 200 internet service providers (ISPs) admit their
circuits are saturated, overwhelmed by the explosive demand for online services.
Despite its relatively small size, the Mexican internet market is one of the fastest
growing in the world with the addition of 1m new users in the last two years.
Nonetheless, its bright future is being threatened, say analysts and ISPs, by the
near monopoly enjoyed by Telmex, Mexico's dominant carrier, over the country's
internet access.
The ISPs complain they have to wait months for Telmex, which controls more than
95 per cent of the local telephone market, to provide new lines and greater routing
capacity.
The principal supplier of local lines and interconnection links to ISPs, Telmex's
backbone also provides the main access to internet nodes in the US, through
which all Mexican internet access is routed.
"The ISPs are suffering because Telmex does not have enough capacity," said
Jesus Diaz, director of marketing for PSINet, an ISP. "Telmex takes a month to put
in a new line and in the meantime I cannot provide connections because the
network is absolutely saturated by the demand."
Telmex says it has been unable to meet demand because it is overwhelmed by
the "monstrous growth" in the internet.
According to Arturo Elias, its head of new technologies, the carrier has been
forced to add its own ISP, Prodigy, to the ever-growing waiting list of providers
clamouring for more capacity.
But while Mr Elias says Prodigy, which commands 60 per cent of the ISP market,
does not get preferential treatment, rival providers have their doubts.
Telmex has been widely accused by its rivals of anti-competitive behaviour and
many believe the service delays are part of a concerted campaign by the carrier to
maintain its stranglehold over the internet.
"When it comes to the internet, Telmex is both the judge and the jury and there is
no doubt it is using its position to monopolise the market," said David Cuen,
co-director of technology research at Mund, an IT consultancy in Mexico City.
In its defence, Telmex has urged disgruntled ISPs to seek service from the
handful of upstart local telephone providers.
Some, such as PSINet, have tried but with little success.
The network range of the new local operators remains limited and they still must
rely on Telmex for routing to internet nodes in the US.
PSINet contracted Maxcom, a local operator, to provide local lines but Maxcom's
routing capacity is already saturated, said Mr Diaz.
In fact, while the newcomers are touted as the main alternative to Telmex's
clogged capacity, hostile market conditions have limited their servicing abilities
and some are facing financial difficulties.
At Maxcom, top executives were forced to resign in July after the carrier was found
to have just 27,000 lines 18 months after launch.
Megacable, another local operator, says it has been waiting eight months for
Telmex to provide it with more routing capacity.
At the same time, high rates charged by Telmex to complete high-speed
connections by Megacable on its network have made providing broadband
internet access unprofitable for Megacable.
But rather than Telmex, analysts and operators blame the government for failing to
provide greater investment incentives for local operators and clearer regulations
regarding the tariffs Telmex charges and the services it must provide to
competitors.
Many are now pinning their hopes on the incoming administration of Vicente Fox,
Mexico's president-elect, to level the playing field and open up the sector to
improved competition.
"The internet is the kind of issue that could push Mr Fox to take measures that are
strong enough to change the competitive environment," said Francisco Gil,
president of Avantel, a long-distance service and internet provider. "If he does not,
Telmex will continue to strangle the market and the internet will not develop."
Mr Cuen at Mund says the bottlenecks are already damping enthusiasm.
He predicts the number of internet users will grow 300 per cent from to 5m by July
2003, but estimates infrastructure problems have reduced the market's growth
potential by 20 per cent. |
