Mexico. In the world there is no other country that is in competition, besides Mexico, where its main operator in the telecommunications sector has a market share of almost two thirds of the total, whether this is measured by revenue, subscriptions, users or traffic. Much less almost three decades of privatization and opening to the aspired but evasive effective competition.
This scenario of excessive concentration generates various distortions and inefficiencies in the operation, with the consequent harmful effects of overpricing, undercoverage, underinvestment and welfare predation on its consumers.
At the same time it distorts public policy and regulatory decisions, from the pressure and even capture that it can exert.
In its most recent pronouncements, it once again shows the same orientation, with quantitative and qualitative information that does not coincide either with that officially published by the IFT, nor with the one that America Móvil (AMX) reports to its investors and to the stock market authorities around the world.
Preponderant in Earnings
The Telmex/Telcel market share shows a sustained upward trajectory, which places it already at levels prior to the Declaration of Preponderance.
In terms of income, it obtains $61.6 of every $100 pesos generated in the sector, in the second quarter of 2019, rising quarterly to approach the $64.2 pesos of 2014, the year of determination of its preponderant character.
This proportion is considerably higher in the mobile segment, reaching $74.1 pesos out of every 100; higher than that corresponding to 2014, which was $71.1 pesos.
Although in the fixed segment it has slightly reduced its market share, the recently referred to 35%. What AMX reported results in a weighting of 54.0% in the markets in which it has a presence, that is, in telephony and fixed broadband.
In telecommunications users or Income Generating Units (UGIs), an indicator by which it was declared a preponderant economic agent, it reaches 59.7%, a level in rise or reconcentration since 2018.
Therefore, the only thing that is at risk is a greater and accelerated market reconcentration. Not so, the operation of this conglomerate that continues to gain weight in the market.
Preponderant, Not In Investments
In the case of investments, the preponderant shows that they exercise them disproportionately below their level of profits, according to the official statistics of the IFT.
Thus, the preponderant invests less and less in absolute terms and as a proportion of the total.
Despite concentrating 2/3 of the total income generated in the sector, it only invests less than 1/3 of the total capital exercised in infrastructure development. This, as there are no incentives or regulatory mechanisms that force the preponderant to improve their networks and make their services available in places with little or no service coverage.
Thus, the official figures and the preponderant confirm the need for effective application and regulatory strengthening, to reverse this process of reconcentration.
Therefore, there is no place for the preponderant comment, on the basis that "he has other data".
Text written by Ernesto Piedras of The Competitive Intelligence Unit.
