A sine qua non condition for the development of markets is effective competition, a scenario in which companies have the capacity to offer their goods and services under fair conditions, circumstances that stimulate innovation, quality, price reduction and well-being. of consumers.
In recent years, the expansion of the consumption of mobile telecommunications services and with the arrival of 5G networks, the intensification of competition in these markets has become prevailing, especially in those that register a marked concentration. The result is that they lack incentives to intensify infrastructure deployment to achieve full accessibility of services.
This is the case of several countries in the Latin American region. Hence, the relevance and necessity of the action of the government authorities in competition matters, to reduce market concentration, eliminate barriers to the entry and development of competitors and/or prevent and penalize the commission of monopolistic practices.
Competition in Regional Perspective. The international consensus bases the analysis of competition on the Herfindahl-Hirschman Index (IHH), which takes values between 0 and 10,000 points (effective competition and monopolistic structure, respectively).
At the end of 2022, the HHI in countries such as Honduras (5,530 points), Bolivia (5,160), Guatemala (5,110), the Dominican Republic (4,870) and Mexico (4,270) is located at extremely high concentration levels. These are the countries with less effective competition in the mobile segment, in which a dominant operator holds a markedly high market share compared to its competitors.
In contrast, Puerto Rico (2,880 points), El Salvador (2,780), Peru (2,640), Brazil (2,540) and Chile (2,510) are the mobile markets with a more competitive structure, in which moderate levels of concentration of mobile phones are identified. market.
Competition and concentration: Evolution. In the last decade (2013-2022), the Peruvian mobile market is flagship, registering a downward trajectory in terms of concentration, a circumstance that has positioned it as one of the markets with the greatest competition in the LatAm region.
In Central America, the concentration of the mobile market in Costa Rica decreased in the period, attributable to the one-on-one competition between the state operator ICE and the then Movistar (now Liberty).
The Chilean case also registers a significant reduction, despite being a market that previously already reached levels of moderate concentration to transit and become one of the most competitive countries in the world in mobile telecommunications.
On the other hand, Mexico continues to register a high degree of concentration and few gains in competition. Currently, the Mexican mobile market still lacks sufficient equitable conditions between operators, having a preponderant that continues to extract profits and extraordinary income, which enable it to have marked advantages over its competitors.
The categorical difference in the market share of the preponderant economic agent in telecommunications (AEP-T, América Móvil) and the rest of the competing players is a sign of the regulatory convenience of proposing and applying new asymmetric measures and strengthening existing ones, in search of better competitive conditions.
The development of mobile telecommunications and 5G is subject to the competitive dynamism existing in different countries. It is time to abandon this scenario of excessive, persistent and marked concentration in the regional comparison. This, with the purpose of generating favorable conditions that encourage the availability, reliability, capacity and affordability of services.
