Mexico’s telecommunications sector grew 14.8% during the second quarter of 2012 over the same period of 2011, according to data from the Telecommunications Sector Production Index (ITEL). This represents the highest growth in the last four quarters. For the six-month period from January to June, the growth rate was 13.4% over the first half of the previous year.
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The local consulting and market research firm Competitive Intelligence Unit (CIU) noted that in recent years, the telecommunications industry has undergone an internal reconfiguration in which the fixed telephony lost heavily in the sector while broadband, both fixed and mobile, gained prominence, generating large revenues.
“During the second quarter, Mexican telecommunications showed solid growth of 4.9% annually, generating revenues of 102.1 billion pesos. In equity, the sector grew 4.2% during the first six months of the year, with revenue of 204.195 billion pesos, compared to 195.937 billion pesos generated in the first half of 2011,” said Ernesto Piedras, CEO and director general at CIU. “However, due to the recent weakness of the peso against the dollar, to display the results in a foreign currency, there is a decrease of 6.5% in industry revenues during the year, accumulated U.S.$15.394 billion. Regarding the second quarter of the year, the sector had an annual decline of 9.1%, representing a total of U.S.$7.546 billion.”
Source: CIU
As CIU points out, mobile telecommunications remains as the largest revenue segment, providing 58.594 billion pesos to the sector in the second quarter, equivalent to 57.4% of total revenues.
ITEL noted the positive results follow the good performance of the Mexico’s dynamic domestic product (GDP) in the second quarter of 2012, which showed an annual growth of 4.1% and registered a cumulative increase, with an annualized rate of 4.3% in the first half of the year.
ITEL forecasts that for the rest of 2012, the Mexican economy might grow 3.71%, which will support telecom growth.
Source: ITEL
In its report (read the full document here—in Spanish), ITEL noted the user’s consumption profile has changed. As a consequence, traditional voice services on fixed telephony are becoming less important compared to mobile services, and data services are gaining prominence.
According to ITEL, during the second quarter, the most dynamic segment was incoming international traffic, with an increase of 28.3%. Satellite television (DTH) presented a growth of 25%, while mobile telephony traffic rose 19.5%.
The mobile phone market continued to post positive results, both in numbers of subscribers and minutes. ITEL also noted that SMS and data applications are becoming important income sources for wireless carriers. During the 2Q12, 1.9 million subscribers were added, reaching a total mobile subscriber base of 97.6 million and a penetration level of 86.9 mobile lines per 100 inhabitant or 86.9%.
ITEL noted that Mexican wireless operators are making efforts to increase their post-paid base, which is in line with the rise of data and value added services in Mexico. Across the country, prepaid mobile lines represented about 85% of total mobile lines.
Mobile broadband subscribers totaled 9.7 million at the end of June, which is 73.9% more compared to June 2011.
Source: ITEL
DTH had 6.3 million subscribers at the end of the first half of 2012, representing the biggest share of the pay-TV segment. Cable TV grew 4.7% during the quarter, while MMDS decreased 36.4% in the number of subscribers.
Fixed telephony lines totaled 20.1 million, which is about 320,000 more lines than at the end of March 2012.
>>>To better understand what is happening in the Mexican wireless market, download the free RCR Wireless News feature report in both English (download here) and Spanish (download here). The report presents a great overview with insights from several specialists about the telecommunications sector in Mexico.
