Local telecommunications firms rediscover Mexico: billion-dollar market awaits telephone advancements.

Mexico has become a multimillion-dollar market for companies in the Southland and elsewhere that make and service telecommunications equipment, now that the Mexican government has made a long-term commitment to upgrading the country's infrastructure.

Industry sources estimate that the Mexican telecommunications industry will have to spend $9 billion to $16 billion expanding its system in the next four years. The purchase of satellites, telephone lines and relay stations will create an infrastructure that will support telephones, cellular phones and facsimile machines for Mexico's recently privatized telecommunications network.

The massive buildup will create a $750 million-per-year market for related equipment by 1994, according to estimates by Chicago-based Telephony Magazine.

Nine of 10 families in Mexico, a country of 88 million people, do not have phones -- representing a huge potential market. On top of that, three major obstacles have been lifted from Los Angeles companies and their counterparts in other U.S. cities that want to sell hardware, software and services to the growing Mexican telecommunications industry.

* Mexico President Carlos Salinas de Gortari lifted import duties and quotas in 1988.

* He also privatized a portion of Telemex, the Mexican government-owned telephone network, in December 1990 when he permitted a consortium of St. Louis Missouri-based Southwestern Bell, France Telecom and Grupo Carso, a Mexican manufacturing and mining company, to collectively buy a 20.4 percent interest in the company for $1.76 billion. The joint venture gives Southwestern Bell and France Telecom service contracts but leaves much of the manufacturing of hardware to Grupo Carso.

* In addition, Salinas de Gortari has taken an active role in the North American Free Trade Agreement that will create a more or less unrestricted trade alliance among the 860 million inhabitants of the United States, Mexico and Canada.

Consequently, Los Angeles telecommunications companies are directing more of their marketing efforts toward Mexico. They see great potential for satellite communications, cellular telephone systems and all of the hardware and software needed to bring Mexico's telecommunications infrastructure up to global standards.

If Los Angeles companies keep landing large contracts, they can increase California's existing $4.7 billion annual export volume with Mexico, the state's fourth-largest foreign trading partner, according to the U.S. Department of Commerce.

From 1989 to 1990, the value of California electronic and electric equipment (which includes telecommunications equipment) exported to Mexico rose 34 percent to $1.02 billion from $762.41 million. Last year's data will not be available until May, but consultants say the numbers will show Los Angeles telecommunications companies that know how to sell products and services in Mexico boosted their revenues and profits.

Arthur Andersen & Co. export expert Leslie K. Brown Cazas said Los Angeles area companies that learn how to sell telecommunications hardware and consulting services in Mexico have the potential to boost their collective annual sales by hundreds of millions of dollars.

Hughes Aircraft Co. Space and Communications Group sealed a deal with Mexican government officials last year for $187.47 million for two Hughes HS 601 model satellites and associated ground equipment. The satellites will upgrade the country's capacity for telecommunications and create demand for additional equipment and consulting services.

Fran Slimmers, a Hughes spokeswoman, said the satellite equipment will replace a system Hughes built and placed in service in 1985. The new satellites have an estimated 14-year lifespan.

Telemex will add 2.3 million telephone lines to its existing 5.5 million lines in the next six years. It will put up 96,000 public phones in Mexico and add 77,000 long-distance circuits, an 80 percent jump from the existing capacity, according data released by Telemex.

Telemex also has pledged to introduce cellular telephone service. Mexico now has 140,000 cellular phones, according to telecommunications industry experts. Of those, 100,000 are in the federal district in Mexico City, another 20,000 in Mexico City, 10,000 in Monterey, 6,000 in Guadalajara and just 4,000 in Tijuana/Mexicali. Cellular providers in Mexico City sign up as many as 8,000 new subscribers a month at monthly service fees of $800 to $2,000. Others communicate over the less expensive two-way radio. Mexico City alone has an annual market potential of $100 million for two-way radios, according to telecommunications industry experts.