Mexico. The telecommunications sector in Mexico registered outstanding dynamism during the first quarter of 2024 (Q1-2024), with a growth of 6.8%, markedly higher than the 1.6% increase of the economy as a whole.
This with an accumulated amount of income of $149.5 billion pesos (mmp). This remarkable performance stems from the relentless adoption and diversification in the use of digital applications and services, driven by an increasingly connected society and an increasingly digital economy.
Mobile Segment: Expansion of Data Consumption and Sale of Smartphones. The mobile segment continues to be the main driver of sectoral dynamism, with a contribution of $87.4 billion, an amount equivalent to 58.5% of the total, and 7.2% higher than the same quarter of 2023.
This evolution is attributable to the explosion in mobile data consumption, the continuous contracting of new lines and a renewed interest in the acquisition of smartphones directly from operators. Financing and subsidy strategies have played a crucial role in countering the growing preference for e-commerce platforms and department stores.
Fixed Telecommunications: Renaissance of Broadband and Telephony. The fixed telecommunications segment, which includes telephony and broadband, registered the highest growth within the sector, with an increase of 7.6% in its annual revenues, reaching $25.1 billion pesos, a figure that represents 16.8% of the sectoral total.
This persistent positive streak is due to the continuous expansion in the contracting of broadband service, but also of fixed telephony. The relevance and need to have these services have driven their contracting for both homes and companies.
Pay TV and Convergent Services: Innovation and Added Value. The pay TV and converged services market recorded a solid performance, with a growth of 5.2% in terms of revenues, with a cumulative $37.0 billion in Q1-2024.
This segment contributes 24.7% of the sectoral total and stands out for its innovation and added value for the offer of more comprehensive packages that include streaming platforms at lower prices than in their individual contracting. In addition, the improvement in the availability, speed and quality of content has favored consumer preference and loyalty.
Outlook for the Rest of 2024: Challenges and Opportunities. The dynamism recorded at the beginning of 2024 augurs a favorable year for the telecommunications sector, driven by the expansion in service provision capacities with the development of 5G networks and the continued disruption in the service offer. The persistent adoption and use of these services among individuals, households, and businesses will be crucial to counteract the economic slowdown.
From the regulatory perspective, the upcoming revision of the asymmetric regulation of preponderance and the strengthening of measures to promote effective competition will be decisive to ensure a balanced and dynamic playing field. These regulatory adjustments have the potential to consolidate a framework conducive to investment and innovation, laying the foundations for sustained growth in the years to come.
The telecommunications sector in Mexico has not only demonstrated its resilience, but also its ability to adapt and grow in a challenging economic environment. With a dynamism that significantly exceeds that of the economy as a whole, telecommunications stand as a fundamental pillar of the country's digital and economic development.
Text written by Ernesto Piedras, from The Competitive Intelligence Unit, The CIU.
