Mexico. More than a year after the beginning of the pandemic, the transmission of this global health crisis to the performance of the economy as a whole is manifest, with the telecommunications sector being one of those that has managed to cushion its effects mostly.
In the case of total revenues reported by operators, they registered a fall of -1.1% during the first quarter of 2021 (Q1-2021), less than the respective fall in GDP that reached -3.8% in the period. Thus, the sectoral trajectory follows a procyclical trend with respect to that of the national productive apparatus, although already attenuated by the growing connectivity that we use in the social and economic operation.
This negative impact is markedly visible in two of its component segments, namely: mobile telecommunications (voice and data) and fixed telecommunications (telephony and fixed broadband), while the only one that has had a countercyclical performance has been that of Pay TV, which has grown very dynamically, even in this deep recessionary period.
Mobile Segment in Red Numbers. This market threads two quarters with red numbers, registering a decrease of -4.5% in Q1-2021, after its moderate recovery in Q3-2020, resulting from the significant contraction (-11.2%) in sales of mobile equipment by operators, as well as the decrease (-1.4%) in the commercialization of services.
Indeed, lower economic activity, productivity, mobility and employment have reduced the demand for equipment and the consumption of wireless communications. The downward trend in this component dragged down total sectoral revenues, contributing 56.6% of the total.
Telecom Fijas in Negative Streak. While the WiFi we use today intensively is based on fixed networks such as broadband at home (22.8 million accesses, annual growth of +13.2%), the fixed telecommunications segment fails to register positive numbers. As of Q1-2021, revenues from this market contracted -2.2%, contributing 2 out of every 10 pesos generated in the sectoral total.
The reduction in the consumption of voice services, as well as the continuous process of adjusting broadband tariffs, have caused its continued negative streak.
Single Pay TV on the Rise. The only sectoral component on the rise is that of restricted television and convergent services, registering a growth of 8.6% during the period, leading it to contribute approximately a quarter (24.6%) of total revenues.
The marked preference for the contracting of fixed telephony, internet, pay TV, and even more recently quadruple play by adding cellular service as in the cases of izzi móvil and Blue Telecomm Cel of Sky, boosted the revenues of operators in this segment.
Revenue Reconcentration, Risk to Recovery. One of the factors that put at risk the recovery in the dynamics of the sector is the marked and already long-standing reconcentration of revenues in favor of the preponderant, América Móvil (Telmex-Telcel).
In the coming months, it is expected that new regulatory changes will be reflected that include, among other adjustments, the effective possibility of unlocking terminal equipment and having an independent contract for services, mechanisms that would further reduce the barriers to the change of operator for users and that will enter into force from next June.
Meanwhile, this player continues to increase its market footprint. For example, its revenues in the mobile segment represent 72.7% of the total, so that for three years it continues to appropriate a greater market share.
Text written by Ernesto Piedras of The Competitive Intelligence Unit, CIU.
