We could have even lower rates, a more competitive telecommunications sector, and a more dynamic and innovative digital ecosystem.
The annual inflation rate in November stood at 7.37%, the highest in 20 years (Inegi). Almost everything is more expensive, except telecommunications services. According to the National Consumer Price Index, several farm products and electricity were the ones that had the greatest impact on inflation during the penultimate month of 2021, while terminal communication equipment decreased -among others.
In November, merchandise had an increase of 7.24%, while services increased 3.92%. This is explained because a good part of the services are provided over the Internet, the main quality of which is to reduce transaction costs.
The telecommunications sector has been anti-inflationary. Since the constitutional reform on telecommunications was approved in 2013, the Communications Price Index has decreased 26.7%. Since then, mobile telephony is 43.9% cheaper in real terms.
Some analysts insist that there is no effective competition in the telecommunications sector. If it were not competitive, we would not have those mobile rates, nor would the Communications Price Index keep inflation lower than it could be. According to him Affordability Report 2020 of the Alliance for Affordable Internet (A4AI), Mexico is the seventh country with the most affordable mobile broadband in the world.
Internet speed is also faster. Behind it are the investments of telecommunications operators. In September 2014, the average Internet speed in Mexico was 4.1 Mbps (Akamai). In October 2021, the speed of mobile broadband was 22.87 Mbps and that of fixed Internet 35.91% (Speedtest). But Internet providers have not increased their rates. They offer more capacity and more speed for the same price.
Not only do we receive a more affordable service, we also receive better quality. It is undeniable that, for the same price or perhaps less, we make more calls, send more text messages and receive more megabytes. Some social networks are included in the plans and that benefits the user. Providers offer digital services such as antivirus, cloud storage or video streaming platforms for the same fee at no additional cost.
But we could be better.
Pay TV has increased 24.6% from June 2013 to December 2020. It is evident that if convergent competition were triggered and all providers could offer pay TV in their packages, households and consumers would benefit from better rates and / or with more attractive multiple play packages, as in Spain.
In that country, most households choose to contract services in a package. The quintuple play (fixed and mobile telephony, fixed and mobile broadband plus pay TV) is in 48.8% of Spanish households and is the one with the most reductions in bills. In 2020 the quadruple and quintuple play packages were 8% and 3% cheaper, respectively, than in 2019 (CNMC, 2020).
Mexico is famous for the high costs of the radioelectric spectrum. The Ministry of Finance proposes, and the Congress of the Union approves, high annual fees for the use of the spectrum. The Asociation GSMA has documented that high spectrum costs lead to higher prices for the mobile broadband user.
If Mexico had a spectrum policy with efficient prices, we would have faster 4G network deployments, greater coverage, better mobile Internet speed, more affordable rates and a more vibrant digital ecosystem, more users connected to the wireless network, demanding more efficient digital services. . All this would put downward pressure on the Communications Price Index, spilling well-being and digital prosperity for the population and businesses.
The existence of national, state and sectoral digital agendas that promote the digital economy and ecosystem in Mexico, would contribute to generating greater demand and supply of Internet services, which would further expand the user and consumer base with price benefits.
For this reason, the proposal of the Head of Government of Mexico City, Claudia Sheinbaum, to collect an additional tax of 2% from 2022 on merchandise, grocery and food delivery platforms such as DiDi Food, Rappi, has caused rejection. Uber Eats, Amazon, Mercado Libre and many more, for using the urban infrastructure. Digital technologies, connectivity and electronic commerce allow reducing transaction costs, that is, everything is cheaper on the network.
Artificially, through a tax and collection policy that punishes the benefits of the collaborative economy and digital commerce in CDMX, Sheinbaum is navigating against the current and wants to make delivering goods and food to homes to be 2% more expensive.
His government “inflationary” -by decree, not by market- an efficient, innovative digital service that contributes to generating income for distributors and profits for companies, allows to sustain the operation of SMEs and family businesses, prevents contagion by Covid-19 and even It is friendly to the environment by reducing the carbon footprint, since deliveries are made by motorcycles, bikes or even on foot.
It is not surprising that groups of distributors, nine industry associations (including Coparmex, Canacintra and the Internet and Mexicana de Ventas Online associations) and four academies and colleges of lawyers and tax attorneys rejected the proposed modification to the CDMX Tax Code and the Sheinbaum tax of 2% to delivery platforms as it is considered “unconstitutional, illegal, discriminatory and discretionary”. Also because it is proposed at the worst inflationary moment and for the pockets of the Chilangos.
The legislators of the Congress of Mexico City should not approve this levy against the empirical evidence of a telecommunications sector and a digital economy that naturally fight inflation with more, better and innovative services.
Twitter: @beltmondi
President of the Mexican Association for the Right to Information (Amedi)
In communication
Media and telecommunications analyst and academic at UNAM. Study the media, new technologies, telecommunications, political communication and journalism. He is the author of the book The media presidentialism. Media and power during the government of Vicente Fox.
Reference-www.eleconomista.com.mx