Mexico. At a meeting of the Members of the Institute of Telecommunications Law, IDET, to review the quarterly results of the telecommunications sector in the second quarter of 2020 (Q2-2020), Ernesto Piedras, General Director of The Competitive Intelligence Unit (The CIU) and member of the Institute, explained that the pandemic has caused recessionary effects on the national economy, by way of social paralysis and also by the fall in external demand, also caused by the confinement adopted by almost all countries.
Already identifiable signs in the statistics show that they have already moved to the telecommunications sector, through a containment and displacement of the consumption of services, for example, from mobile networks to those available in homes and companies.
In its sectoral aggregate dynamics, revenues from the provision of telecommunications services fell 10.7% during Q2-2020, compared to the same period in 2019.
This contraction is attributable to the main sectoral segment, mobile, whose contribution to the sectoral total fell 5.2 percentage points compared to the previous year.
The mobile market was impacted downwards by the lower consumption of services and acquisition of equipment derived from the restrictions on mobility and cessation in the opening of recharging and sales points, the transfer of the use of connectivity to fixed networks, as well as the lower purchasing power of users.
It is worrying that in this segment a reconcentration of revenues has been identified in the last three years in favor of a single operator, the preponderant (Telcel), even after a period of review, adjustment and addition of asymmetric regulation measures and more than six years after its implementation.
Measured through the Herfindahl-Hirschman Index (HHI), the concentration in mobile revenues as of Q2-2020 is already reaching a level that exceeds that identified at the beginning of the preponderance.
The preponderant has been concentrated in users of high value (postpaid). It has thus opted for prepaid users, but consistently reconcentrating its revenues and expanding its profit margins, to the detriment of effective competition. For the second quarter of 2020 its market share measured as a proportion of total mobile segment revenue has recovered to 72.0%.
According to The CIU, the prospective on the dynamics, for future periods and for the end of the year, is that the connectivity sector resumes its path of characteristic growth, given the growing demand and use of these services for the realization of social, productive, educational, informative activities, among others of Mexican homes, companies, institutions and government.
Today more clearly than ever, the new conditions imposed by the pandemic crisis urge the fulfillment of the constitutional mandate of the basic right to connectivity for all Mexicans.
