Telecoms Sector Outstrips GDP Growth in 1Q07

The Mexican telecoms sector grew 22.4% in the first quarter this year compared to 1Q06, outstripping the country's average overall economic growth of 2.6%, according to telecoms regulator Cofetel's production sector index ITEL.

The rate represents the highest growth in two years. In a statement Cofetel said the sector has benefited from the implementation of new rate packages, alliances between operators and a stable macroeconomic environment, thereby increasing subscriber numbers and traffic.

Rates for local fixed line telephony dropped 3.9% in Q1 compared to the year-ago period. Postpaid mobile rates saw a drop of 20.4% for the same period, while prepaid calling rates fell 4%.

National long distance rates also saw a 7.7% decline, while international long distance dipped only 1%.

Furthermore, Cofetel said the implementation of calling party pays (CPP) has particularly benefited digital trunking, national and outgoing international long distance traffic, as well as increasing traffic between mobile networks.

Spurred by CPP and lower rates, outgoing national long distance traffic rose 14.2% while outgoing international long distance increased 19.8%. Digital trunking had 1.74mn users at the end of the quarter, a gain of 35.8% compared to the same time last year.

The mobile industry is considered by the study as the most dynamic industry of the economy, adding 2.81mn subscribers in the 1Q07 to end the period with 59.8mn, an increase of 22% year-on-year.

Curiously enough, there are still 55,895 Mexicans who subscribe to paging services that were popular before the age of mobile telephony, although that number dropped 21.9% compared to the same period last year."

Posted to the site on 4th June 2007