The impact of telecommunications regulation on less well-off Mexican households

Abstract

Access to mobile communications in Mexico is heavily skewed in favour of those with higher incomes. In 2014, 80% of the highest 10 percent (decile) in the income distribution had access to mobile communications, while only 30% of the lowest decile did. The same figures for 2016 are 84% and 40%. This report sets out to review some of these numbers and places them within the narrative of asymmetric regulation and other reforms which Mexico adopted in 2013/14.Among our observations is that buyers of mobile communications services in the lowest decile in 2014 spent 6% of their income on that service while those in the highest decile spent only 2%. Over the next 2 years, mobile communications prices fell by 36%; this fall in the prices of mobile communications followed regulatory reforms in the sector which were introduced in 2013/4. An interesting component of these reforms was the imposition on the preponderant operator of asymmetric access charges, which reduced its mobile termination rates to zero. This means that a policy that, in principle, was not even aimed at, designed, or considered for the poor had a real strong impact on this group of the population.