In November 2019, Ryan Reynolds became part-owner of Mint Mobile, one of many wireless services available in the United States. Thanks to some savvy marketing and Reynolds’ star power, the company was sold less than four years later to T-Mobile for $1.35 billion.
Around that same time, Mexican YouTuber and blogger Luisito Comunica took a radically different approach. He launched a network of his own, going directly to his nearly 40 million followers. That telecom company, PilloFon, became Mexico’s fourth-fastest-growing telecom company in less than a year.
Each example illustrates the contrast in the state of telecom in the U.S. and Mexico. Reynolds’ American tale is one of celebrity and business success in traditional terms. The movie star followed a tried-and-true formula of buying part of a company, using his celebrity to promote it through traditional media channels, and then selling it for a terrific profit. Comunica went directly to his fans with an out-of-the-box offering tailored to their needs. And it’s PilloFon, rather than Mint Mobile, that signals telecom’s future, partnering with brands in creative ways and offering flexible, customized plans that align with customer lifestyles.
So, how did Mexico leap ahead in terms of creativity in marketing wireless services while the U.S. remained relatively stagnant? The answer lies in Mexico’s groundbreaking 2013 telecom reform. This reform, which opened the floodgates to competition in a previously highly concentrated sector, should inspire hope and optimism among American consumers for what could be possible in their own market.
That led to a surge in no-contract, monthly top-up plans rather than long-term contracts. Around 20% of Mexican mobile users switch providers each year, lured by better deals. Prices have dropped by 42% since the 2013 reform. And Mexico is now Latin America’s second-largest telecom market, pulling in 7.7% of the overall market with 10.5 million lines and 111 registered MVNOs in 2022. A recent survey on MVNOs conducted by Mexico’s Federal Telecommunications Institute (IFT) revealed that the Mexican MVNO market grew by 312.7% from 2020 to 2022, and that 53 new MVNOs entered the market between 2021 and 2022 alone.
Additionally, Mexican telecom companies must constantly innovate with their offerings and forge partnerships with popular consumer brands. For example, Walmart offers steep discounts on wireless plans to customers who spend over a minimum amount monthly in their stores. Delivery marketplace company Rappi offers its couriers tailored, high-data plans optimized for using their app without consuming data. The customization also extends to the enterprise market, with carriers working closely with brands to meet the connectivity needs of their business, whether outfitting a retail chain with POS systems or keeping a delivery fleet connected on the road.
Despite some U.S. companies (including Mint Mobile) making progress with no-contract offers and more flexible data plans, many American consumers are still trapped in a legacy mindset, where two-year contracts are the norm and switching carriers is daunting. This situation should invoke a strong desire for change among American consumers.
But consumers always benefit from more choices, more customization and more value. Generic connectivity is past its prime, and today’s wireless customers want better options and a way to connect with a provider who shares their values. Consumers see telecom as part of their personal technology stack and expect the same availability, experience and personalization from big tech.
Mexico has set a compelling example of what can happen when competition and choice drive innovation. This should serve as a challenge and motivation for the future of telecom in the United States, which could look more like Luisito Comunica rather than Ryan Reynolds.
Originally posted on TelecomDrive.
