If in recent days your internet, cable or telephone provider warned you that it would soon raise its prices, it is because telecommunications services have not escaped the inflationary phenomenon. However, the rise in the prices of these services has not been as marked as that of products.
The price of internet in Mexico, for example, reached an average of 114.3 pesos in July, 3.1% more than the 110.8 in July 2021, according to Inegi data. An increase that remains well below inflation, which closed in July at 8.15% at the annual rate.
Another example is the average fee for pay television, which in July this year was 109.9 pesos, which implies an increase of 0.6% compared to the 109.3 pesos it cost last year.
The telecommunications sector has spent seven years keeping the price of its services below inflation. Doing so was part of the objectives of the structural reforms applied to the industry in 2014. One year after the Telecommunications Reform entered into force, the prices of some services fell by up to 14.5% compared to the National Retail Price Index. Consumer (INPC), according to the Federal Telecommunications Institute.
In addition, companies are trying to avoid passing on all increases in their operating costs to users in order to avoid further disconnections or the migration of users to other competing brands.
Telecommunications services played a fundamental role in the health crisis, becoming the main tool to continue with school, work and entertainment activities, slightly increasing their penetration in the country.
According to figures from the National Survey on Availability and Use of Information Technologies in Households (ENDUTIH), in 2021 the number of users with internet access is 88.6 million, while 22.5 million have a package that includes internet .
Some 6.9 million people have a subscription to pay television, and 1.3 million to a fixed line.
Although internet, telephony and television services have not increased above inflation, operators have faced challenges, including the scarcity of raw materials for the sector such as semiconductors and fiber optics.
“Technological progress is making new investments have to be made that are expensive to have a higher quality internet and higher speed for streaming, and work at home that requires new equipment,” warns Miguel González Ibarra, coordinator of studies financial and public finance at UNAM.
As of June 30 of this year, Izzi has injected 75.3 million dollars; while Megacable has allocated resources to its network for 2,796 million pesos in the second quarter of this year; while Telmex has disbursed 1,761 million pesos from April to June 2022.
Some of the providers of triple play packages, which include telephony, internet and pay television, have had to make price increases. For example, Megacable has increased its rates three times in less than a year. Totalplay also in March notified its customers of new prices on their packages; Izzi was another company that increased its prices last month.
“The industry is being affected by the volatility generated by the war in Russia and Ukraine, and by the breakdown of supply chains. If both issues are not resolved soon, the costs of this industry will continue to rise,” says González Ibarra.
Sky, a subsidiary of Grupo Televisa focused on satellite television services, has maintained its rates, but in conferences with analysts, Luis Malvido, CEO of the company, commented that “given the enormous pressure that inflation represents, it is possible that they could raise their prices.”
Brian RodrÃguez, an analyst at Monex Grupo Financiero, explains that, if the inflationary effect continues, consumers could begin to cut the number of contracted services. “Consumers, although they will not cancel the connectivity services, since they need them to continue with their activities, they will begin to reduce the amounts of disbursement, such as purchasing a package with fewer megabytes, reducing channels on restricted television or going from postpaid to prepaid or get a more affordable plan,” he details.
According to the Study on the Habits of Internet Users in Mexico 2022 of the Internet Association, 97% of fixed Internet users spend an average of 401.7 pesos per month on this service, while 74.4% of Internet users who connect through mobile networks pay an average of 176 pesos.
However, The Ciu consultancy has reported a decrease in spending for recharging. In the first months of the year, the average amount allocated by users to recharge their mobile phone went from 89 to 87 pesos.
