Cable TV competition benefits the consumer

Mexico. According to the most recent report of the Institute of Telecommunications Law, IDET, in little more than a decade, Mexican households have experienced a revolution in entertainment to which they have access. Cable television went from being a luxury to a daily presence in just over half of Mexican households. In just a decade the number of households with television doubled, from 26% in 2006 to 55% of the total according to figures from the Latin American Multichannel Advertising Council (LAMAC).

This growth, in addition to greater access to news and entertainment content, has brought a significant increase in the number of households with fixed internet access, since a large number of consumers of pay television are, at the same time, service providers. connectivity, which are offered in packages of two and up to three services simultaneously.

It is worth noting that pay television has been present in Mexico since the 1960 decade, but its growth was historically slow, both due to the limitations of the available analogue technology and the high costs of deploying its infrastructure to homes, as well as inputs such as equipment and audiovisual content, usually quoted in dollars. With the macroeconomic stability at the beginning of the 21st century, the number of suppliers of this service grew rapidly, reaching an amount of more than 2,100 companies dedicated to this area, according to Economic Censuses conducted by the National Institute of Geography and Statistics at 2009.

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In this period, companies undertook modernization and investment processes to evolve to digital technologies with which they could offer additional fixed internet and telephony services. With this they were able to develop competitive advantages with respect to the country's telephone operator who can only offer telephony and internet. The evolution of the industry was so rapid that INEGI changed its North American Industrial Classification System 2013 (SCIAN 2013) so that the cable television companies were left in a new activity called Wired Telecommunications Service Operators.

In addition to the growth and sophistication of the fixed telecommunications industry, competition caused the prices of pay television and fixed internet services to remain below the prices of other goods and services. The National Consumer Price Index (INPC) of December of 2017, the most recent data, places the general price index in 130.8, while the price index for cable television remained in 111.8 and that of fixed internet services in 86.9.

Needless to say, all this has happened while the price of the dollar went from 12.3 pesos at the end of 2010 to 19.6 pesos in December of last year. That is, the competition has kept prices at reasonable levels despite a devaluation of the peso by almost 60% since the beginning of this decade. For comparison, the average price of the basic pay television package in 2014 was 322 monthly pesos and by the end of last year it was 366 pesos monthly according to the INEGI. However, of the 182 measurements made by the institute as part of the National Consumer Price Index in December of 2017, the 40% have prices below the average.

A positive side effect for users of telecommunications services has been the push to the fixed internet sector, which has substantially increased its speeds largely thanks to investments made by entrepreneurs in the sector in technologies such as fiber optics and data centers that allow to bring content to the devices of the users. The latest report published by Speedtest Intelligence in 2016 indicates that competing fixed telecommunications companies that the company of the Preponderant Economic Agent in Telecommunications (AEP-T) have access speeds much higher than those of said AEP-T

As can be seen, the competition in the pay television sector has allowed the growth in the number of households with this service, but it has also exerted an important traction effect in the fixed internet sector, all at extremely accessible costs. The work of dozens of fixed telecommunications entrepreneurs who offer their services in communities far from the regions of interest for the AEP-T and that struggle to maintain their infrastructure and service in the face of the complex security conditions that prevail in a large part of the country they deserve to be rewarded with a regulatory environment that assures their growth, not that limits their performance and their present and future growth.
 

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