The data of March inflation increased concern about cost of living overflow which has forced the Board of the Bank of the Republic to sharp increases in interest rates to defend the purchasing power of Colombian households.
Upon reaching 5.56 percent the increase of annual prices In the third month of the year, President Gustavo Petro assured that the above is due to the fact that, among other things, “the mobile/cell phone usage costs they grew a 3 percent in the month of March”.
However, the Dane data show something else: that there was a 0.78 percent increase in cost of living only in March and the category of fixed and mobile communication services and internet provision only contributed 0.08 points of that total.
In reality, the main culprits of inflationaccording to Dane, were: accommodation, water, electricity, gas and other fuels with 0.26 points and food and non-alcoholic beverages with 0.24 points.
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Despite the Dane data, the president says that inflation can be pressured by the cell phone prices and ratesand “it may be because of the merger between Tigo and Movistar and followed by the other cellular operators.” This merger was approved by the Petro Government through the Superintendence of Industry and Commerce.
Are they the responsible?
The Government has insisted that this behavior is not usual. The Minister of Information and Communications Technologies warned that before the approval of the integration between Tigo and Movistarit had already been noticed possible effect on rates. “Within our technical concept (…) we show that there would possibly be an increase like we are seeing today,” he said.
On the subject, Claro and Tigo did not comment at the time of this publication and Wom said he wouldn’t speak.
Given this scenario, the Ministry of Information and Communications Technologies summoned technical tables with the main players in the sector. The Superintendence of Industry and Commerce (SIC), the Communications Regulation Commission (CRC), the Dane and the operators participate in these spaces, with the aim of analyze the behavior of rates and determine the causes of the increase.
“The tables will start this April 14; We were in communication with the SIC, the CRC, the President and the Dane to identify how the rate behavior“, explained the ICT Minister, when referring to the beginning of the monitoring.
He objective of these meetings is to establish whether the rise responds to market conditionsto company operational adjustments or for effects derived from the concentration after business integration.
In parallel, the President Petro asked that “the respective superintendencies must begin operations“, in reference to possible surveillance actions in front of price behavior.
The Superintendence of Industry and Commerce (SIC) initiated information requests to companies in the telecommunications sector to analyze the conditions of competition. The entity explained that, although the market has gained dynamism with new players, it remains concentrated, with a dominant operatoraccording to the Organization for Economic Cooperation and Development, which requires strengthen regulation and access to wholesale markets.
In this context, the SIC recalled that the integration between Tigo and Movistar look for balance the competition and was subject to conditions to ensure fair access to operators such as WOM and virtual mobile operators. Furthermore, he pointed out that the price rise may respond to factors such as costs, investments in 5G and regulatory changes promoted by the Communications Regulatory Commission. With the information collected, the entity will evaluate possible violations and continue to monitor the market to protect competition and users.
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