Telecommunications giant Telefónica has picked blockchain technology to lower infrastructure costs and expand its mobile coverage in Mexico. 

Through a partnership with Nova Labs — the company behind the Helium Network — Telefónica will leverage Helium Mobile Hotspots to expand its actual coverage in Mexico City and Oaxaca, according to an announcement on Jan. 24. 

Helium’s hotspots are essentially nodes that provide wireless network coverage for Internet of Things (IoT) devices. By integrating Helium’s decentralized network, Telefónica is able to expand its coverage, particularly in remote areas, by allowing hotspots to validate wireless activity and provide coverage to the network.

For users, the adoption of a decentralized network may result in better connectivity during peak usage times since Telefónica plans to offload data traffic to the Helium ecosystem. This means that when a user’s device is in the range of a Helium hotspot, it can switch from using Telefónica’s traditional cellular network to the Helium network, helping alleviate connectivity congestion.

New partnership alert @NovaLabs_  is working with  @Telefonica  to launch Helium Mobile Hotspots in Mexico!

This will allow  @Telefonica  customers to connect to the @Helium Mobile Network seamlessly using their Movistar SIM cards, reducing infrastructure costs while expanding… pic.twitter.com/3u3CgcEdXO

— Helium Mobile (@helium_mobile) January 24, 2024

Users will be authenticated via their SIM cards, explained Telefónica, adding that the company will maintain full control of clients' activities through its proprietary management system.

Telefónica’s chief wholesale officer, José Haro, said the initiative is part of the company’s efforts to expand coverage via lower-cost and cooperative-based technologies. “This program in Mexico is critical to evaluate performance and customer satisfaction of this solution and its associated costs," he said. "Our expectation, if successful, is to incorporate this into our portfolio of mobile networks in the different countries of the region.”

In Mexico, Telefónica operates under the brand Movistar. According to data from Statista, it held 18.3% of the country’s mobile market share in 2022. The company is based in Spain but operates in over 17 countries across Europe and Central and South America. In 2017, Telefónica claimed to have over 272 million mobile users.

Telefónica has several initiatives tied to the Web3 space. In September 2022, the company enabled payments with cryptocurrencies like Bitcoin ( BTC ), Ether ( ETH ), and USD Coin ( USDC ) via its online tech marketplace. Telefónica Tech, the company’s technology division, has been involved in developing and implementing blockchain solutions.

Magazine: Real AI use cases in crypto, No. 1: The best money for AI is crypto