Inflation and a lower exchange of telephones affect telephone revenues

Inflation and a lower exchange of telephones affect telephone revenues

Before the pandemic, users renewed their telephone equipment every 18 months on average, but with the changes in habits that the health crisis triggered, it now takes 27 months to change their smartphones.

“I think there is a double effect in the drop in equipment sales, although it is not necessarily being so negative because users are making a big budgetary effort to acquire a smartphone of better quality, but by investing more than double what we did three years ago for the acquisition of these smartphones what we do is prolong the tenure of the current ones”, explains Piedras.

Inflation is another factor affecting telecommunications operators’ equipment revenues. Erick de la Cruz, manager of analysis at the consulting firm Select, comments that the economic pressure that Mexicans are currently experiencing means that they have to be more cautious in their spending and prioritize the purchase of basic necessities over a smartphone.

“Low economics coupled with a replacement maturity cycle have affected (the equipment revenue segment), but it is expected that (the purchase of smartphones) is normalized by the end of the year,” said De la Cruz.

Equipment revenues are one of the most relevant segments for the operation of telecommunications companies, representing a third of their total sales.

change shopping channel

Another of the changes in user consumption habits is the way of acquiring a device. Before the pandemic, consumers bought their equipment at the telephone companies’ sales centers, but now they do so online.

According to the study of the Mexican Association of Online Sales (AMVO), “Study of online sales The Mexican digital consumer 2022”, last year the most purchased products by users by e-commerce They have been electronic, with 55%, in which cell phones and telecommunications services such as recharges and telephone plans are located, with 71%.

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Teo Piedras, an analyst at The Ciu consulting firm, assures that department stores have also become another cell phone purchase channel for users.