Tuesday, October 1, 2019

High-value telecommunications market moves slowly in Mexico

In mobile telecommunications, Mexico is an eminently prepaid market and the challenges of telephone companies to migrate consumers of this country towards tariff contract schemes that bring greater benefits to both parties are as different as those that have to do with power purchasing, network coverage and even due to ignorance of the same users about more accessible offers or greater capacity for services.

In approximately a decade, Mexico has gone from having a market with 90% of its prepaid users, in 2007, to 82.1% of it in the third quarter of 2017; as the postpaid segment only reaches a share of 17.9%, taking as reference the 111.61 million cell phone users that the three main operators reported in their financial reports for that period.

AT&T is the leader in the Mexican postpaid market. This segment, with respect to its own customer base, represents the company 38.5% of its users served; a high value quota that allows AT&T to be the second player in the mobile market by volume of revenue, even though it is an operator with fewer total customers compared to Movistar.

But AT&T also faces complications in the postpaid item when it sees that segment decrease while trying to expand its presence in the country, since 2015, adding more prepaid than contract clients to its portfolio; It is in this way that the participation of this segment in its internal accounts has been reduced from 49.3% in December of that year, to 38.5% in the third quarter of 2017. AT&T began to report its user fees and income in detail as of from the last quarter of 2015, after the consolidation of Iusacell-Unefon and Nextel under their own brand .

Movistar and Telcel, although they have grown in the segment, have not had simple migration to postpaid. To date, Telefónica's subsidiary has 2.13 million users with a contract, barely 8.6% of its total users , while the flagship brand of América Móvil serves 12.56 million consumers postpaid, 17.05% of the 73.31 million customers that I had in the penultimate quarter of 2017.

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