Sun. Dec 3rd, 2023
Government of Mexico Confirms Agreements with Starlink to Expand Internet Access

Mexican authorities have confirmed the closure of two agreements with Starlink, Elon Musk’s satellite internet service. The contracts, valued at a total of 3.331 billion Mexican pesos, aim to accelerate the objectives of the federal program ‘Internet for All’.

Last week, Reuters reported that the South African entrepreneur’s company had won the bidding process by offering “the best conditions in terms of prices”. The commercial alliance consists of two contracts. The first contract, with a minimum cost of 778.003 million pesos and a maximum of 1.556 billion pesos, will provide free internet in remote and hard-to-reach areas within the country. The second contract aims to expand cellular phone services coverage in disconnected communities, with a minimum amount of 887.059 million pesos and a maximum of 1.775 billion pesos.

According to Carlos Emiliano Calderón, coordinator of the National Digital Strategy of the Presidency of the Republic, Starlink’s service is one of the most advanced available and has been contracted to rapidly respond to connectivity nationwide, as promised. The Mexican government has sought all possible technologies to quickly connect the entire population. President Andrés Manuel López Obrador stated that now 94% of the population lives in regions with internet access. Official figures show that there are 119.12 million Mexicans living in areas with cell phone coverage, representing 94.5% of the total population and an improvement from last year’s 91.9% coverage.

The objective of ‘Internet for All’ by 2024 is to provide access to 4.5G mobile networks for over 20 million Mexicans living in communities with fewer than 5,000 inhabitants. These contracts strengthen the presence of Elon Musk’s companies in the Mexican market. Earlier this year, Tesla announced its plans to build an electric vehicle plant in the state of Nuevo León, with an investment exceeding $5 billion.

Starlink’s operations currently span nearly 50 countries and regions worldwide, with 1.5 million global subscribers as of May. Bloomberg reported that Musk is considering an initial public offering (IPO) for Starlink, which could happen by the end of 2024. Although Musk denied the information, the report explains that the company has begun transferring its assets to a subsidiary that would eventually be split off in the IPO. Musk has previously stated that Starlink could go public when revenues and cash flow become consistent and predictable. The company reached profitability earlier this month.