Mexico. In recent years, the segment of restricted television and packaged services registers a much higher dynamic than that of the rest of the components of the telecommunications sector in Mexico.
This performance is underpinned by the segment's robust investments for the converged provision of enhanced video, voice and data transmission capabilities. This has managed to meet the accelerated growth of this demand for connectivity and entertainment.
Rising income. In the third quarter of 2020 alone (Q3-2020), the revenues of Pay-TV companies amounted to $28,508 mp, that is, 7.0% more in their annual comparison. With this, the segment is positioned as the most dynamic and consolidates itself as the second largest contribution in the total revenues of the industry, with a weighting of 22.4%.
Precisely, the better conditions of offer of these services in terms of availability, coverage, diversity, quality and affordability have driven not only the contracting of video services that already reach 20.8 million subscriptions in Q3-2020 (+1.6% of annual growth), but also of those of fixed telephony (21.9 million lines, +3.7%) and fixed broadband (21.4 million, +9.6%).
This through double and triple play packaging, although for a few months, Mexican users have offers of up to five times play, also including mobile services and access to video on demand platforms over the internet.
Preference for Packaging. According to the "Second Survey 2020, Users of Telecommunications Services", a growing number of users of the pay TV service (19.6% of the total) contract their services in the modalities of double play and triple play, with fixed telephony and / or internet.
This is a market that, despite not being exempt from the effects of the economic recession and the deviation of preferences for other direct entertainment alternatives at home, that is, subscription and free streaming platforms, maintains a dynamic growth rate.
Even in Mexico it has managed to contain in some proportion the global trend to cut the pay-TV service, known as cord-cutting in English.
Prospective on its Dynamics in 2020-2021. Revenues from the Pay-TV and Converged Services segment are projected to register an annual growth of 7.5% in 2020, which contrasts significantly with that forecast for the sector as a whole (-1.1%), given the sharp drop in the contracting and use of mobile telecommunications, during the first half of 2020.
The social and economic conditions due to the pandemic have resulted in a 'digital push', due to the acceleration in the adoption and use of connectivity from the confinement and the pandemic, to give continuity to productive, school, informative, cultural, romantic, entertainment activities, among others, resulting in a catalyst for connectivity.
It is foreseeable that the growing contracting of connectivity services and the greater disbursement in higher speeds of downloading data over the Internet will boost the spending on fixed broadband packaging bills and consequently, the income of converged cable companies.
The expectation is that the increase in the preference for packaging and the greater capacities of the fixed telecommunications networks of these operators, will translate into a double-digit growth of this market in 2021, thus supported by the economic recovery and the purchasing power of households in Mexico.
Text written by Ernesto Piedras, from The Competitive Intelligence Unit.
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