EconomyFinancial"And a recharge, please": Mexicans lower the amount to...

"And a recharge, please": Mexicans lower the amount to recharge their cell phones to 89 pesos due to inflation

Mexicans have reduced the amount they allocate to the purchase of airtime. In the first quarter of the year, they spent an average of 89 pesos to recharge their prepaid line, according to data from The Ciu consultancy, but “due to inflationary pressure” this amount could drop to 87 pesos in the following months, foresees Rolando Alamilla, manager of market research for the firm.

The prepaid segment was one of the schemes most used by users during the pandemic, because, unlike rental plans, it does not force them to be tied to a contract with a telecommunications operator. However, inflation is causing consumers to skimp more and more on their expenses and one of them would be the purchase of air time.

“We have seen a decrease in spending during the first quarter of 2022 and we also saw it in the fourth quarter of 2021, the result of very high inflation,” says Alamilla. “With the downward forecasts for GDP, we are not going to see inflation decrease this year, perhaps it will until 2024 and it is in these circumstances that users reconfigure their spending,” he adds.

Jesús Romo, director of the consulting firm Telconomia, says that, given the economic caution that Mexicans are going through, the business models of Virtual Mobile Operators (MVNOs) will be relevant for the prepaid segment to grow and retain users.

Today, consumers prioritize megabytes over calling minutes, because they need them to download data and surf the Internet. This has made them begin to ponder the added values that a purchase of airtime can bring them, such as increasing megabytes in the purchase of groceries, which is Walmart’s Bait strategy.

Another example cited by Romo is Dish, through Fredom Pop rewarded its subscribers with a cell line with air time per month.

“We have seen that the issue of additional service has nominally maintained the income of mobile operators, and now that users have the idea of modulating their consumption, they are going to look for models that give them a profit,” he adds.

The contracting of new prepaid lines loses dynamism

During the first three months of 2022, the number of prepaid lines rose 5.6% compared to the same period in 2021. But compared to the fourth quarter of last year, it only increased 1%.

For the experts, the slowdown in the contracting of prepaid lines is due to factors such as seasonal disconnection that occurs during the so-called ‘January slope’, as well as the fact that operators cancel lines that consumers no longer use since The return to the offices has prompted some users to return to the postpaid model, or rental plan.

The specialists consulted consider that by the second quarter of 2022 the recharge segment will grow, but no longer at the accelerated levels registered during the health crisis.

“We have seen that after the recovery of mobility, many users have rehired postpaid lines (rental plan), in fact, 100,000 were created in the first quarter. But this does not mean that the prepaid (top-up scheme) did not grow, we are only seeing that we are beginning to resume a dynamic more similar to what we saw before the pandemic, ”explains Alamilla.

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