Mexico. The telecommunications sector continues to register a high market concentration in favor of a single player, the preponderant economic agent (AEP), América Móvil. Of greater concern is the market reconcentration and reversal of the gains in competition registered in the mobile segment, dominated by Telcel.
More than six years after the Declaration of Preponderance and more than three years after the first biennial review of the asymmetric regulation measures imposed, the indicators of the evolution of competition register a trajectory contrary to the objectives proposed by asymmetric regulation.
This behavior shows that the limited effectiveness that the measures imposed at the time by the Federal Institute of Telecommunications (IFT) on the AEP could have had, not only diluted, but have not prevented this scenario of reconcentration in the sector.
According to consolidated statistics released by The Competitive Intelligence Unit (The CIU) based on the financial reports of the operators, in the last three years, the reconcentration in revenues of the mobile telecommunications market results in the AEP holding a ratio of 72.0% of the total to the second quarter of 2020, that is, 3.4 percentage points (pp) more than the level registered in the same period of 2017 (68.6%).
In mobile lines, the trajectory of loss of participation of the ASP that was observed after the declaration of preponderance has been reversed. So it went from having 61.6% of total lines in the third quarter of 2019 to a coefficient of 63.3% to the second quarter of 2020, that is, a gain of almost two percentage points in just three quarters.
Measured through the Herfindahl-Hirschman Index (IHH), the market reconcentration in mobile revenues exceeds even the level recorded during the Declaration of Preponderance (first quarter of 2014). This, reaching 5,618 points during the second quarter of 2020 (still at the threshold of excessive market concentration), compared to the 5,586 points registered at the beginning of the implementation of asymmetric regulation measures. As far as the IHH in lines is concerned, the trend of market deconcentration has been reversed.
Although IDET recognizes that the arrival of the Covid-19 pandemic caused by the SARS-COV-2 virus made it necessary to suspend various decision-making processes in the public sector, including those of the sector's regulatory body, it is clear that the different sectors are carrying out various activities in order to return to normal.
Based on this, the IDET makes an attentive call to the IFT so that the decision on the new and necessary asymmetric measures that must be imposed on the ASP, which initially should have been in force since the first quarter of this year, is not delayed any longer.
It is even considered important that this occurs prior to the authorization of the reference offers for the provision of wholesale services for 2021, because if this does not happen, such offers will be misaligned for a whole year compared to the new set of preponderance measures that are imposed.
For idet, the importance of resolving this pending issue as soon as possible derives from the fact that the reconcentration of the mobile market and the recovery of power by the Preponderant Economic Agent will end up harming users and will have an impact on their well-being, at a time when it is more necessary to remain connected.
The Institute of Telecommunications Law (IDET) is a Mexican civil association, established in July 2002, for strictly academic, research and propositional purposes, composed of a group of specialists from the telecommunications and information technology sector, who contribute to the improvement of the existing regulatory framework.
