Mexico. The telecommunications sector is experiencing renewed dynamism, based on its growing adoption, intensification of use and transversal adoption in practically all activities, economic, educational, cultural, entertainment and social, in general. This was indicated by the latest report by The CIU.
In 2023, these circumstances resulted in higher growth compared to the previous three-year period (2020-2022) of 5.6%, measured by the generation of revenues by telecommunications operators, resulting from the provision of voice, data, content and equipment sales services.
Numeralia in Detail. In absolute numbers, the cumulative sectoral revenue amounted to $577.3 billion pesos (mmp) throughout 2023.
The largest contribution to this amount came from the mobile segment with $340.1 billion or 58.9% of the total, which also stands out for its marked dynamism in the year (+7.0%). This, as a result of the greater consumption of mobile data, the incessant pace of growth of new lines and, especially, the increase in the commercialization of smartphones.
This last revenue component of the mobile market has recovered its evolution, which turned out to be in double digits practically throughout 2023, from the implementation of financing strategies and/or equipment subsidies by operators. This, to address the growing preference for other acquisition channels, such as e-commerce platforms and department stores.
Other sectoral components. In stark contrast to its dynamism in previous years, the fixed segment (telephony and broadband) left the red during 2023 and reached second place in terms of growth (+4.2%), registering revenues of $95.4 billion, to represent 16.5% of the sector's total.
This growth resulted from the progress recorded in the contracting and use of broadband services.
Meanwhile, the pay TV and convergent services segment continued with its usual positive dynamism, although at a slower pace than the rest of the markets, with an increase of 3.3% in terms of revenues. In 2023, this segment generated revenues of $141.7 billion, a figure that represents 24.6% of the sector's total.
Despite this, cable operators maintain their strategies of investing and bundling services to boost their customer base. The strengthening of their coverage footprint in terms of past homes and offices, greater speed and availability of TV channels, together with the savings generated by their plans, continue to jointly expand their preference and consumer loyalty.
Prospects for 2024. The upward trajectory in the consumption of data, applications and content, but above all the expansion in the availability and improvement in fixed and mobile connectivity capabilities, supported by the growing deployment and development of next-generation networks and innovation in the supply of services, will overcome the lower macroeconomic dynamism and will drive sectoral growth in 2024.
From a regulatory point of view, an eventual intensification of measures that would lead to effective competition and a level playing field would allow market conditions to be balanced between operators, based on the adjustment to the preponderance asymmetric regulation measures.
Consequently, it would make it possible to effectively navigate the adversities that are predicted for the sector's development.
Indeed, although there are market factors that will translate into higher revenues for operators, there are still pending issues from a regulatory perspective that threaten the sector's dynamism for 2024.
How much will the sector grow in the year? Its magnitude will depend to a large extent on the elimination of marked competitive imbalances and the lack of incentives for investment in infrastructure.
Text written by Ernesto Piedras of The Competitive Intelligence Unit, CIU.
