Hector Magnetto and Carlos Slim sign for the team of losers

The outlook for June is not expected to be very different, given that companies will also have to assume the 30% increase achieved by those working in the sector represented by the Confederation of Telecommunications Unions (Consitel).

Three days after taking office, Milei signed DNU 70/23, which deregulated telecommunications activity. Then, through the National Communications Entity (Enacom) began to erase all regulations that established price controls for internet, mobile phone and subscription television services.

The libertarian resolution also included DNU 690/2020 of the management of Alberto Fernandez which declared Information and Communication Technology (ICT) Services to be “essential and strategic”.

Telecom, Movistar and Claro, losers

Telecom, member of the Big Three of telecommunications, lost 16.3% in service sales in the first quarter of 2024. The balance sheet of the company belonging to the Clarín Group and the Mexican businessman David Martinez It attributes the loss in profits to a rate increase that was below inflation and despite the fact that it gained subscriptions.

The detail indicates that mobile telephony increased to 21.2 million devices and added 681,000 more users than in 2023. Fixed internet remained at 4.1 million and achieved 18,000 new connections compared to last year. They lost 50,000 cable television subscribers and had 3.1 million modems left.

The specialized site Teleweek published that the company Claro, of the Mexican magnate Carlos Slim (AMX Argentina), had a loss of 15.4% compared to the first quarter of last year. In March it registered 25.1 million mobile lines, 4.2% more than the previous year. The striking fact is that in the first quarter it added 214,000 subscribers, all prepaid plansto have a data package according to the status of the wallet.

“Companies are not exempt from the country context. There is a greater rotation of clients among companies, looking for better plans or promotions,” he told Letter p an expert close to Movistarthe company of Telefónica of Spain whose local ceo is Marcelo Tarakdjian.

The source explained that “the price of the service is currently a few points below inflation” and added: “Now the sustainability of the companies has been prioritized over the recovery of profitability.”

Telcos are asking Milei for more deregulation. Among other things, they are asking him not to force them to provide monthly reports of new and terminated clients because it is very costly. “We expect more modern regulation that favors investment,” said an executive of these companies.

SMEs on the brink of the precipice

In addition to the large operators, the telecommunications sector has 1,200 SMEs that capitalize on services throughout the country. That ecosystem is on the edge of the precipice.

Industry sources consulted by Letter p described: “The vast majority of SMEs and cooperatives that provide connectivity services have their finances very complicated due to the increase in costs, the exchange rate, the tax burden, the impact of inflation; and they cannot translate this into prices. , for the simple reason that people cannot afford it.

“This is not regulatory and it is not even a matter of whether the average $20,000 pesos that users pay per connection is a lot or a little, the problem is the state of the macroeconomy,” said a source from Cabase.

This technology chamber published a report indicating that 67.5% of families reduced their spending on fixed internet services, while 65.3% cut back on cable and wireless services. streaming.

The study also reflects that there are few “definitive cancellations”: 1.2% in fixed telephony, 1.9% in fixed internet and 3% in mobile telephony and pay TV; but highlights a sharp drop in services streaming: 10% fewer users.