Dollars for dialing.

• Author: Luxner, Larry
• Position: Mexican telecommunications industry

WHEN DOUG CLARK ARRIVED IN MEXICO two years ago to oversee Northern Telecom's operations, few Mexicans possessed fax machines, even fewer had cellular phones, and the company's entire 13-employee sales staff could fit into one conference room. Today, Northern Telecom de Mexico occupies the entire second floor of an ultramodern glass skyscraper on posh Avenida Insurgentes; it employs 60 fulltime salespeople and another 400 maquiladora factory workers on contract, and boasts annual revenues in excess of $80 million. At the same time, fax machines hum in nearly every office in this sprawling metropolis of 18 million people, 100,000 of whom use cellular phones on a daily basis.

In fact, Northern Telecom supplies five of Mexico's nine regional cellular operators. Last September it won a $21 million contract for 10 operator positions and 1,500 operator switches from Telefonos de Mexico (TELMEX), the country's recently privatized telephone conglomerate. "We're here because business is booming," said Clark, a native of Cambridge, Ontario, and a 10-year Northern Telecom veteran. "We're probably the fastest-growing Canadian company in Mexico."

Northern Telecom's chief competitor, Motorola - which supplies the other four cellular companies-is equally bullish on this nation of 88 million people. "The fact that the current government has decided to rapidly implement market strategies to open the economy and pursue free trade happens to fit us very well," says Jose Baviera, Motorola de Mexico's director-general. "We feel very good, we are enthusiastic, and we are certainly supportive of the effort."

Mexico's telecommunications explosion - dramatic for a country where nine out of 10 families still don't even have telephones - is the result of three factors: President Carlos Salinas de Gortari's 1988 lifting of import restrictions, which has opened up the Mexican economy; the privatization of Telmex, which is expected to lead to rapid improvements in basic phone service, and the pending North American Free Trade Agreement, which seeks to unite the 360 million inhabitants of Canada, the United States and Mexico into a $6 trillion trading bloc, the world's largest.

"Three years ago, the economy was opened to imports for the first time," said Jorge Arredondo, spokesman for Ericsson de Mexico. "Barriers were reduced, so businessmen began to buy terminal equipment they didn't have access to before. The phenomenon of fax machines is directly tied to expansion of the economy. Before, you needed a license...