The Mexican rural community of Talea de Castro, in the state of Oaxaca, has set up its own mobile network, Red Celular de Talea (Talea Mobile Network), after Mexican operators refused to extend their mobile networks to Talea on the grounds that it was not profitable. With RCT, users can make local and international calls and send SMS text messages. The project was developed in partnership with Rhizomatica, a nonprofit that aims to bring mobile communications to underserved areas by using low-cost GSM-enabled mobile phones, VoIP technology, and open-source cellular software developed by Range Networks, a U.S.-based company.

The RCT uses “all spectrum fragments that exist across the Mexican airspace and which telephony operators refuse to use for reasons of financial infeasibility,” said Israel Hernandez, one of the project’s founders. RCT obtained a two-year license from Mexico’s Federal Telecommunications Commission (Cofetel) to test the service, and the project is currently in a trial period.

In the three months since the pilot was launched, RCT service has reached over 600 monthly users. For a monthly fee of MXN 15.00 (US $1.16), RCT users can make unlimited local voice calls of up to five minutes per call. Calls to international numbers are charged at approximately MXN 0.80 (US $0.06) per minute.

Tarifica’s Take

We found this story to be extremely interesting. We applaud the entrepreneurial spirit of this largely indigenous rural community in Mexico for taking matters into its own hands when MNOs refused to serve it. We also applaud the ingenuity involved in realizing that neglected spectrum fragments could be found and forged into a functional mobile network. Obviously, the existence of the RCT project illustrates vividly the fact that demand for mobile services now extends to every corner of the world, no matter how poor or remote.

Most importantly, this story can be seen as a cautionary tale for MNOs: If providers decline to serve areas where potential revenues seem small, other entities, apparently, will step into the breach and do it instead. In a world where operators’ traditional hegemony is already under threat from new types of competitors such as OTT providers, we think it does not pay—even from the point of view of public perception—to leave room for non-MNOs such as Rhizomatic and Range Networks to establish a foothold in the mobile marketplace. A few tiny communities today could turn into many self-starting larger ones in the future.

We understand that the Mexican provider Movistar (a subsidiary of Spanish-based Telefónica) has already gotten the message, taking a page from RCT’s book by starting a franchise-type arrangement to connect rural areas by sharing ownership with locally-based entrepreneurs.