As part of highlighting Trade & Investment as one of our Center’s key areas we talked to Thaddeus Arroyo, a member of our Executive Advisory Board, about why cross-border investment is important to him. Arroyo, CEO of AT&T Business, led the charge of expanding AT&T’s network into Mexico, which now covers nearly 100 million people living in Mexico.
Why did you decide to join the leadership of the Mission Foods Texas-Mexico Center?
Given the opportunities that I’ve been provided to serve as a business leader not only in Texas, but also in Mexico, I feel a responsibility to use what I’ve learned from my experiences, however I can, to further business opportunities for both countries.
I’ve seen first-hand how business success can benefit both countries and enhance communities on both sides of the border. While we’ve made progress in recent decades, there is still plenty of opportunity to improve the policies that govern Texas and Mexico. Through the research that the Texas-Mexico Center sponsors we can better understand and explore the dynamic political, cultural, economic, and business relationships between our two countries.
I’m truly honored to be part of the Mission Foods Texas-Mexico Center as a member of the Executive Advisory Board. I believe in, and support, its mission to continue improving relations between Texas and Mexico through dialogue and research.
As we continue to grow and extend the scope of our work, I feel encouraged by what we can accomplish with the help of executives, faculty and students all aligned to encourage greater cross-border collaboration.
Why is it important to you for the Center to have trade and investment as one of its key areas?
Trade and investment are key for a variety of reasons, but most importantly because of the capabilities they possess to spur new cycles of innovation. If we hope to further progress, shared economic success and societal advancements across Texas and Mexico, then we must have a successful formula as to how trade and investment factor into the equation.
If you look at Mexico, the country has a rapidly growing middle class, the second-largest economy in Latin America and one of the highest per capita GDPs in Latin America. Maintaining a mutually beneficial pathway for trade can benefit both the United States and Mexico.
Investing, and specifically from a technology perspective, is also crucial. We’re seeing this hold true across the world. New technology is propelling business deeper into the heart of the fourth industrial revolution and causing a lot of positive disruption that is enhancing economies and creating new industries.
You must commit to investing in and developing these next-generation technologies or risk falling behind the next great innovation cycle. The combination of technology and connectivity has placed the collective knowledge of human kind in a device that fits in our pocket.
I witnessed just how powerful technology can be for an emerging economy like Mexico’s. In early 2015, a majority of mobile internet access was still at 2G speeds – think of that as dial-up. Now, Mexico has more 4G LTE availability than some G7 countries according to a 2018 Open Signal study.
It is important to look at how we can continue to open new trade pathways and mutually invest in building our economies and developing technologies that shape a better world.
How is AT&T helping connect Texas and Mexico through its own investments?
The mobile Internet has changed how we live, work and interact as a society.
Nothing has traversed physical borders and social barriers like the mobile internet revolution. Mobility has crossed the social divide connecting people of all backgrounds and socioeconomic experiences. Access to high-speed mobile networks and wireless adoption power the transformation of communities.
This means it is of vital importance that we extend the reach of the mobile Internet as far as possible. Year after year, we’ve consistently expanded our wireless reach and capabilities for consumers and businesses in the United States and we’re doing the same in Mexico.
The byproduct of our investments in advanced networks in Mexico has been rapid innovation across the entire technology ecosystem. This impacts not only the economy and businesses, but society as whole. It is ushering in mobile and digital communities – offering citizens entirely new experiences.
This is felt in both Texas and Mexico as we now live in a world where technology is making boundaries between industries more porous. These cross-border opportunities will only continue to connect our two countries in the coming years.
Beyond this, Mexico’s growing and young population, growing middle class, and growing economy make it an attractive place to invest. That’s why we committed to invest $3 billion from 2015 to 2018 to deploy our network, grow our distribution and to introduce the AT&T brand. That investment is in addition to the $4.4B we invested to purchase Iusacell and Nextel several years ago.
And thanks to the investments we’ve made, AT&T has the largest network in North America – covering more than 400 million people and businesses with 4G LTE across Mexico and the U.S.
We make it easy to tap into the full power of this network with plans and benefits working the same regardless of which side of the border our customers are on – so it’s a great experience whether in Texas or Mexico. This is important, as we’ve found that companies are increasingly looking for more opportunities to do business on both sides of the border.
The telecommunications industry was a focus of the NAFTA renegotiation. Are you happy with the outcome of the USMCA for your industry? What is the end impact?
We’re committed to improving the network and customer experience we offer in Mexico. What we see happening in Mexico and what the government has accomplished with the macroeconomic environment and regulatory reforms to encourage foreign investment is impressive.
We’ve made these significant investments in Mexico, in part because of the telecommunications reform that’s taken place. And when you combine this with other reforms in the sectors of energy, education and finance, it is clear that Mexico is well positioned to accelerate its growth trajectory and economic mobility.
Mexico has an economy that interconnects with the U.S. in so many ways – culturally and economically. I witnessed this first-hand during my time as CEO of AT&T, Mexico. Our wireless operation in Mexico also represents a natural geographic expansion of our wireless footprint in a country with a growing economy that is interconnected with the U.S. economy.
With the introduction of more competition in the wireless marketplace and the increasing access to the next-generation mobile internet we’ve driven mobile internet adoption across all layers of society.
Productivity, competitiveness, and well-being will increasingly be a function of how well connected we are, and how effectively we are putting information to use. While many may not immediately think of network infrastructure as fundamental to innovation, I personally believe that the network is the oxygen that fuels a connected generation.
This does nothing short of help address the digital divide and create a platform for future economic growth.
There is generalized agreement that technology has a positive impact on job creation, GDP growth, and the emergence of new industries and services. Technology changes the way people work and even the interaction between citizens and their governments.
Based on a 2014 Inter-American Development Bank Study, a 10% increase in penetration of broadband services is related to an average rise of 3.2% in GDP and 2.6% in productivity.
Competition and the race to invest to better serve consumers will directly impact Mexico´s manufacturing and services competitiveness. Today´s global supply manufacturing, as well as other sectors, require efficient telecommunication services, secure e-banking, mobility, and information sharing in near-real time.
Mexico’s mobile industry is going through dramatic change thanks to Mexico’s telecom reforms and we hope to help lead in this transformation.