Mexico could register price hikes in mobile telecommunication and internet services

If the Mexican government approves an increase in the radio spectrum tax for 2021, the price hikes would immediately affect mobile telecommunications and the internet ; moreover, it would delay the improvement of networks since the arrival of the 5G network would be delayed. Furthermore, a tax increase could also discourage new concessionaires in the telecommunications sector that were about to enter the market.

In the end, the increase would affect over 100 million users because as usual, concessionaires and service providers would force clients to pay 56% of the tax increase proposed by the federal government. The Finance Ministry argues that this would be a production tax and that in theory, it must be absorbed by concessionaires, which is unlikely because, for them, it would represent an important decline in profits, or it would translate into the impossibility to grow in the short term.

Amid the COVID-19 pandemic, thousands of Mexicans use the internet to work at home or study. During this time, their economy was affected by the halt in activities, as well as this new tax proposed by the federal government.

Recommended: UK backtracks on giving Huawei role in 5G high-speed network

Understandably, the federal government needs to collect more resources amid an economic crisis, especially under the argument that in Mexico the tax regarding the use of the 800 MHz band is among the lowest rates in the world, and that the increase is aimed at concessionaires. Nevertheless, increasing the price of a service that has become a basic need requires more common sense and social awareness, instead of disproportionate measures to increase tax collection.

During a time when work and education at home have emerged as a new paradigm that allowed society to follow physical distancing measures, the Mexican government should promote strategies to provide accessible internet and mobile phone services, instead of attempting to implement inflationary increases.

The government and the private must urgently reach an agreement to stabilize the economy, instead of complicating the lives of Mexicans.

gm