Telmex pays more users than Izzi thanks to not raising the price of internet

A year ago, Telmex was facing a constant loss of users comparable to what it is now experiencing because the América Móvil subsidiary had reduced its pace of investment to improve and expand its fiber optic network, causing problems in its services. But to regain balance in the business and to face competition, the company decided to increase its capital injection.

In the second quarter of this year, the company invested 6.315 billion pesos, which is six times more than the 1.024 billion pesos in the same period last year, according to the company’s financial statements.

Telmex’s strategy to retain users

In addition to the increase in investment, the new dynamism that Telmex has resumed would be associated with the strategy it has undertaken since the pandemic: not to increase the price of its connectivity service and instead increase internet bandwidthsThis plan is contrary to the one applied by its competitors, which have occasionally increased internet costs to return the investment destined to the deployment of more kilometers of optical fiber.

Market analysts believe that Telmex’s price freeze could have an impact on competitors such as Izzi, Totalplay and Megacable, who, unlike América Móvil’s subsidiary, increase the costs of their services to recoup some of the capital injection from the deployment of fiber optics. However, when questioned about this, Televisa, which owns Izzi, does not see any impact on Telmex’s commercial strategy.

“Regarding Telmex not raising the price, what we did was focus mainly on customers who also have a video offer. When you do the math, the 389 pesos that Telmex charges for its packages, we have comparable prices. So, we don’t see that as a major obstacle,” said Francisco Valim, CEO of Izzi in a conference call with analysts.

However, for Daniel Hajj, CEO of América Móvil, this situation is helping Telmex. The executive said that in recent years the fixed segment has seen greater competition, but Telmex’s pricing plan has brought more customers to join the company, so he has ruled out the possibility of internet costs increasing in the medium term.

“We are doing well. We are growing in broadband and we already have a lot of fiber in Mexico. So we have good fiber network coverage and we are growing in Mexico. In addition, the different add-ons such as Netflix or HBO in the package program have worked quite well,” Hajj said in a conference call with analysts.