Slowdown in the telecom sector

The dynamic revenues of all telecommunications operators during the first quarter of 2025 (Q1-2025) confirm the arrival of a scenario of virtual sector stagnation.

According to figures compiled and published by The Competitive Intelligence Unit (The CIU), annual growth was just 1.2%, the lowest since Q1 2021, reaching a cumulative $151.3 billion pesos (mmp).

This stagnation is a direct consequence of a combination of structural, regulatory, and economic factors that have slowed the growth of an industry that had been showing signs of post-pandemic resilience.

Effects by segment. This slowdown in growth is particularly evident in the performance of the Mobile Segment, which represents 59.2% of total sector revenues, totaling $89.6 billion pesos. While consumption (up 4.4%) and mobile service contracts (up 6.5%) have maintained their momentum, device sales registered a contraction of -6.6% during the period.

Likewise, the Fixed Segment (Fixed Telephony and Fixed Broadband) rebounded, but to a lesser extent, reaching revenues of $25.9 billion pesos, or 17.1% of the sector's total, a 3.1% increase compared to the previous year. This growth is primarily attributable to the increase in broadband access subscriptions.

In contrast, the Pay-TV and Convergent Services segment recorded a -0.6% decline for the first time in its recent history, with revenues of $35.9 billion pesos, or 23.7% of the total, as a result of an increasingly steep decline in pay-TV subscriptions, which fell by -6.8% year-over-year. Its satellite offering, without bundling or value-added offerings, continues to lose relevance for Mexican households.

Multi-causal slowdown. The sector's slowdown cannot be understood without looking beyond the figures, where the economic environment plays an important role.

The slowdown in consumer spending, resulting from a national economic slowdown, has directly impacted spending on equipment purchases and upgrades, as well as on non-essential services, such as pay TV.

Added to this is a climate of regulatory uncertainty and the international geopolitical context.

The lack of definition and consistency in competition policy, the challenges in implementing competitive rebalancing mechanisms, and the lack of effective incentives for new investments in fixed and mobile networks are creating a climate of strategic pause among operators.

The institutional environment has not been favorable to the sector either. The transition to a new sector authority has undermined investor confidence, who prefer to wait before making strategic moves or deploying infrastructure. This is especially true given the lack of a regulatory framework or the right conditions for the medium and long term.

Looking to the future. The telecommunications sector in Mexico is at a crossroads. Current figures do not represent a collapse, but they do represent a clear warning sign.

Connectivity and efficient provision must be a national priority, especially in the context of increasing digitalization, which requires a coordinated strategy between government, regulators, and operators.

Recovering dynamism will not be an easy task. It requires legal certainty, strengthening the sector regulator, defining an effective path to effective competition, and creating conditions conducive to investment.

Connectivity cannot be held hostage to uncertainty and macroeconomic fluctuations. Mexico needs a strong, competitive, and inclusive telecommunications sector. The time to act is now.