IFT press release
This is an automatic translation of the press release issued in Spanish
The prices of mobile services (telephony, internet and short messages) and fixed service packages (including internet, pay TV and home telephony) had an annual decrease of 7.82% and 8.34% each from December 2022, according to information from the National Institute of Statistics and Geography (INEGI). Said reduction contrasts with a 7.82% rise in the prices of the basket of 299 (generic) products considered to measure inflation.
Figure 1 clearly shows the contrast in recent years between general inflation (INPC) and the evolution of prices for mobile services (including internet and short messages) and internet, telephony and TV packages, which have decreased drastically. It is worth mentioning that this trend continues for the first half of January 2023.
This represents a direct advantage over the 88.6 million Internet users in Mexico, which is equivalent to 75.6% of the population aged 6 years or older and whose uses of the Internet are mainly concentrated to communicate (93.8% ), search for information (89.9 % ), access to social networks (89.8%) and training or support for education (83.1%). The decrease in prices has a direct impact on the access and use of these services.
It is also worth noting that generic mobile and internet, telephony and pay-TV packages functioned as an “anchor” to prevent inflation from being higher than observed which is explained in the following table, which shows the ten generic medicines whose price has fallen and which have made the greatest contribution to stopping said rise, and that although they have not succeeded in reducing inflation, they have mitigated it has. [one]
When ordering all the generic products from the National Consumer Price Index (INPC). [2] from highest to lowest, according to their incidence on general inflation in 2022, it is observed that domestic LP gas, as well as mobile and package services They were the ones that contributed the most to the decrease.
Of the 299 generic products that make up the INPC and are classified into 12 divisions, it stands out that only Communication (which includes generic mobile phone and packages) has offered an annual price reduction, with a decrease of 5.9 percent.
The decrease in communication prices meant savings that families could allocate to the consumption of other essential goods or services. This reduction is significant considering that in 2020 households in Mexico spent an average of $347 per month on mobile services and $465 on fixed services, representing 1.9% and 2.23% of their income, respectively. [3] . In this way, the ratio intended for communication, with the same services, could have decreased.
The foregoing reflects that the telecommunications sector in Mexico remains stable to the benefit of users of mobile and fixed services.
[1] Regarding the contribution of each generic drug to annual inflation in Mexico, INEGI uses the concept of “incidence” to represent the contribution of each component of the INPC to general inflation. Under this methodology, the sum of the prevalence of all generic drugs would equal national inflation. In this connection, it should be noted that an appearance can be positive or negative: a positive appearance contributes to the rise in inflation, while a negative appearance implies that general inflation is lower. In this way, the prevalence estimate makes it possible to know the extent and direction of the price changes of each generic on national inflation.
The incidence is calculated using the generic index in the study period (IPC P t ), the generic index in the previous period (IPC P t-1 ), the general or national INPC of the previous period (INPC t-1 ) and the current weight of each generic in the INPC basket ( w P). Appearance of the generic = ((IPC P t – IPC P t-1 )/INPC t-1 )* w P. In certain cases, the sum of the components of a group of sub-indices may have some inconsistency due to rounding effects.
[2] To estimate the INPC, 299 generics grouped into 12 sections are used according to the Classification of Individual Consumption by Objectives (CCIF). For further details, consult the Methodological Document of the National Consumer Price Index, published by INEGI, available at: https://www.inegi.org.mx/app/biblioteca/ficha.html?upc=702825104177
[3] Average monthly expenditure on fixed and mobile telecommunications services of households that have and spend on such services according to the 2020 National Household Income and Expenditure Survey.
