Mexico. Since the beginning of the global pandemic crisis, telecommunications have established themselves as the second sector, after the health sector, in terms of importance for the national productive apparatus.
After an episode of support and essentiality for the productive, educational, cultural, informative and national entertainment operation during the confinement and the social and economic paralysis; its adoption and use among the population, households, companies, government and in general, all economic agents has intensified.
In its recent evolution with respect to the trajectory of the Gross Domestic Product (GDP), this sector suffered ravages and a period of economic recession caused by the pandemic during 2020. However, in 2021, it embarked on its trajectory towards a recovery from what was lost last year.
Measured by the revenues generated by all operators in Mexico during the first three quarters, a significant rebound of 16.3% during the second quarter of the year (Q2-2021) stands out, which more than exceeds the 10.1% drop observed during the same period of 2020.
However, in the third quarter of 2021 (Q3-2021), the sector slowed its recovery dynamics, after registering a significant rebound during the previous quarter. This after the continuity of recessionary impacts derived from the economic-health crisis that is approaching its second anniversary.
During this period, an annual growth rate of 2.2% was recorded, lower than that of the national productive apparatus (4.8%). Both the Mexican economy and industry continue to be impacted by the effects of the health crisis.
Global inflationary pressures, the contraction in purchasing power as a result of the global economic downturn, and production bottlenecks continue to affect productivity, income generation, and the price levels of the country's products and services. Meanwhile, global shortages in the supply of electronic components have wreaked havoc on the sale of mobile telecommunications equipment in Mexico.
Despite the fact that the most pronounced effects derived from the pandemic have already manifested themselves, there are still effects on trade and disruptions in global production chains, which continue to wreak havoc on both the national macroeconomic set and the telecommunications sector.
Projected Telecom Revenue Growth in 2021
After the contraction in revenues registered during 2020 of -0.4%, a recovery of 6.1% is anticipated to reach the record figure of $527.7 billion pesos (mmp) at the end of this year. This amount considers the sale of voice services, connectivity and marketing of mobile equipment.
This dynamic is explained, in the main, by the recovery of economic activities and the generation of income of companies and households. Likewise, the expenditure contained during the most critical moments of uncertainty has been eroded throughout this year, to the extent that a certain stability of economic activity has gradually returned. With the recovery of mobility and national dynamism, mobile segment revenues will represent 57.3% of total revenues, followed by restricted TV and convergent services with 24.0% and, finally, the fixed segment with 18.7%.
Thus, a growth of 5.4% of the mobile telecommunications market is anticipated at the end of 2021, with revenues of $302.4 mmp. level that represents a recovery of the segment after a contraction of -2.3%, during 2020, despite the brake that has meant the shortage of equipment and its components.
For its part, the provision of restricted TV and convergent services will continue with its usual positive evolution, with a foreseeable growth of 9.8% during 2021, to reach an amount of revenues of $126.7 mmp. In part, this result derives from the enrichment of its offer, from the increase in internet download speed, the packaging of services with streaming platforms, TV Everywhere, digital TV set-top box, among other additions for consumers.
The growing preference and demand for the contracting of convergent connectivity for teleworking, teleeducation and home entertainment, has caused this market to have been the least impacted within the telecommunications sector. By contrast, individuals and households have allocated an upward proportion of their income to count and consume more of these services.
However, in the case of the fixed telecommunications market, for the first time in its recent history, a positive evolution is projected during 2021, reaching an annual growth of 3.7%, with revenues of $98.5 mmp. Although this level is lower than the rest of the segments, it leaves behind its continuous negative streak, as a result of the 'digital push' and the consumption of greater connectivity by the population in Mexico, generated by the pandemic.
Finally, with the recovery of revenues from the telecommunications sector expected of 6.1%, after the slight contraction of only -0.4% last year, it is evident that telecommunications redoubled their relevance for consumers and each year their essential character is strengthened, finding new opportunities for use and benefit that will result in their characteristic dynamism superior to that of the economy as a whole. Although the global economic crisis impacted the entire productive apparatus, since 2020, telecommunications have shown their resilience in the face of both micro and macroeconomic attacks.
Analysis by The Competitive Intelligence Unit, CIU.
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