Mexico. Have you ever wondered what proportion of your income Mexican families spend on telecommunications. The National Household Income and Expenditure Survey (ENIGH) 2018, carried out by INEGI, yields revealing results in this regard.
Between 2015 and 2019, the number of households in Mexico grew 9.2%, while internet access in households grew more rapidly, registering 57.2% in the same period. According to these data, there are 80.6 million internet users, that is, a penetration of 70.1% among the population.
This growth is a clear reflection of the growing importance of telecommunications among the population for work, education and entertainment, which has meant that people adjust their budget restriction and decide to direct more resources to the payment of these services.
In 2006, the ENIGH reported that the share of household spending on telecommunications services was 3%, while in 2018, the proportion increased to 4.45%, an increase of 48% in 12 years.
If you will grant me, the income of Mexicans has not grown to the same extent as the consumption of these services, so it is a combination of a decrease in the price of them and a substitution with other items.
This makes sense because we must remember that much of our entertainment has evolved in the last decade towards digital supply and consumption. The number of users who watch movies, listen to music and read books through an internet connection and a subscription to providers of this content follows an upward trajectory, especially compared to content provided by the "traditional" route.
It will be necessary to monitor what is happening in the next statistics because the conjunctural situation that occurred during the current year because we will have two opposite effects that could modify this proportion. In the first place, the negative income effect generated by the economic crisis will be evident for most Mexican families, in this sense comes an important adjustment in spending and its distribution since the most indispensable takes on greater relevance and decreases expendable expenses, however, at the same time the value of telecommunications services increases under a scenario of confinement and maintaining work activities, educational, economic and financial through internet services.
Undoubtedly, the final result will depend on the magnitude of the blow to household income, since a substantial fall could generate that telecommunications services in homes are cut and in this way return to more than a decade ago, therefore a state policy aimed at protecting the connectivity of the most vulnerable Mexicans is fundamental.
Text written by Gonzalo Rojon of The Competitive Intelligence Unit.
