Mexico Telecommunications: 2Q26 previews and a relatively uninteresting scenario, unless...

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Mexico Telecommunications: 2Q26 previews and a relatively uninteresting scenario, unless...

Mexico Telecommunications

10 July 2026 Citi Research

Sector Dynamics Update

We continue to see a competitive landscape. Two out of the four main players—

Telmex and Megacable—are seeking growth objectives; one (Izzi) is pursuing

profitability; and the other presents a mixed proposition.

The main way this scenario affects companies is to limit price increases, especially

at the entry level packages. This, in turn, could have a negative effect on margins;

however, we see EBITDA margins evolving well across our coverage on idiosyncratic

drivers—Megacable as it matures its new territories, and Izzi (consolidated) as it

reaps synergies from the integration with Sky. Another symptom is greater pressure

to upgrade infrastructure, which is currently disproportionately affecting Izzi given it

is behind in fiber rollout.

On the positive side, competition should drive greater commercial efforts that could

accelerate system net adds (i.e., increased penetration), which in our view has

helped keep growth rates healthy—in the mid-single-digits for five years already

and even higher before that. This may have helped offset a sluggish economy over

the last 12 months. Particularly in 2Q26, we understand that heavy rains limited

commercial outreach and equipment installations, which likely affected gross adds

across the sector. In that sense, we do not expect strong net connection numbers in

the quarter.

Figure 1. History and 2Q26 Forecast

RGUs net addition, QoQ in thousands (left); Expansion of RGUs Base, YoY (%) (right)

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