Mexico. A dynamic and competitive environment is registered in the Pay-TV market in terms of revenue, subscriptions and investments, as was documented in this space last week. This scenario has led to better conditions of quality, coverage, reliability and price of the service for consumers.
The latter is verifiable in various metrics that manifest a provision of the service at low prices and high standards of quality and consumer satisfaction, both in its comparison within the telecommunications industry, and in a regional perspective.
In terms of prices, a comparison made by The Competitive Intelligence Unit (https://goo.gl/gjBPgH) with a select sample of Latin American countries reveals that in Mexico the lowest prices are registered in the contracting of the service of basic packages of the service. With a level of only $26.3 dollars in Purchasing Power Parity (PPP), it is close to half of what is allocated on average in the region ($42.7 dollars PPP) and a proportion similar to that of the Argentine market ($52.5 dollars PPP).
In relative terms, in Mexico the lowest proportion (1.6%) is allocated with respect to the income from the annual hiring of an average basic pay-TV package, twice as low as the average achieved (3.2%) by all Latin American countries.
Despite a slight upward growth trajectory in service prices (0.9% during 2017), given the rising costs of acquiring content for operators, they remain at affordable levels for consumers.
This is reflected in the propensity to spend to acquire the service, such that the average price that potential users are willing to pay to get it ($225 pesos) is 10.2% lower than the average price observed ($202 pesos) of the basic Pay-TV packages offered by VeTV (Sky) and Dish.
Regarding the quality of the service, statistics compiled by PROFECO in collaboration with the IFT corresponding to the period July-September 2017, indicate that Pay TV is the service with the lowest number of nonconformities registered due to service failures. They only represent 7.1% of the total related to the provision of telecommunications services in Mexico.
In its disaggregation by operators, it highlights that the heavy investments in infrastructure of the cable companies to improve the quality of the networks, place them in the first places of quality of service and consumer satisfaction.
These metrics show that, in terms of prices and quality of service, Pay TV registers optimal levels, such that consumers do not experience barriers to access due to these conditions. All this, as a result of the dynamics and competitive impulse present in the market.
Thus, the contracting of the service between households (67 out of 100) is among the highest in Latin America and the highest among residential services in Mexico.
The ignorance and / or lack of recognition of these indicators would constitute a categorical omission in the regulatory analysis of the structure and competitive dynamics in the Pay-TV market. Therefore, any attempt at specific regulation imposed on the players participating in this market would cause a disruption in its operation, the consequences of which we hope will not be adverse to the welfare of consumers.
Text written by Ernesto Piedras, from The Competitive Intelligence Unit.
