Mexico’s Turbulent Digital TV Transition

Analog TV shut-offs tend to be complicated and bumpy affairs under the best of circumstances. The transition in Mexico, however, has seen more than its fair share of turbulence and false-starts.

The original analog shut-off (ASO) was slated for 2021, but the previous president, Philippe Calderon decided to dramatically accelerate the change, bringing the ASO to 2015. To meet such an ambitious goal, the government planned to subsidize and install converter set-top boxes and antennas for poorer households starting in Tijuana, the first city to switch off its analog broadcasts.

While the schedule was ambitious, Tijuana residents who couldn’t afford them were provided with converter boxes and when the government was confident that roughly 93 percent of the city’s households had access to digital signals, it prepared to end analog broadcasts. Unfortunately, the shutdown happened to coincide with a local election and quickly became a lightning rod for controversy. The city’s mayor pleaded for a delay as did other officials and interest groups. Having briefly shut down analog signals, the government relented, reversing course briefly to allow the election to proceed while eliciting howls of protest that it was carrying water for the country’s monopolistic broadcasters.

The next round of switch-offs are due in November of this year, where at least 15 cities will convert to digital. Only now, it seems, they’ll be doing so without subsidized converter boxes. According to a statement released by the Ministry of Communications and Transport, Mexico would stop installing decoder boxes and instead subsidize and install 24-inch televisions, despite the huge cost differential (the boxes are said to cost between $48 and $90 while the TVs range from $218 to $436).

Two local manufacturers, Diamond Electronics and Foxconn Electronics, were tapped for an initial order of 120,000 units for a pilot run in the cities of Nuevo Laredo and Reynosa, but the country will need millions more if it plans to finish out its transition relying on TVs instead of converter boxes. Such a change raises a host of questions about the feasibility of Mexico’s shut off timeline — namely, how a program of such importance can unfold with seemingly so little strategic forethought.

Ironically, while the transition veers its way toward an uncertain conclusion, other facets of Mexico’s telecommunications market seem to be improving. As part of President Enrique Pena Nieto’s comprehensive push to reign in monopolistic sectors of Mexico’s economy, regulators have ruled that, among other changes, incumbent telecom providers must open up their last mile connections to competitors. Regulatory reforms may spur long overdue competition and investment in the country’s digital infrastructure. Together with the freeing up of analog TV spectrum for better wireless services, Mexico may be on the cusp of pushing its economy deeper into the information age. It just won’t be an easy ride.