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El Salvador - Telecoms, IP Networks, Digital Media and Forecasts

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El Salvador’s mobile market sees further consolidation

The smallest country in Central America, though with the third largest population, El Salvador is burdened with considerable income inequality, rampant crime rates, poor infrastructure, inadequate social capital, and one of the highest homicide rates in the world.

Despite these difficulties, the telecoms sector has been one of the more successful in the nation’s economy. This is particularly true of mobile services, which are emerging as the country’s preferred avenue of communication given the poor state of fixed-line infrastructure in many areas. The use of text messaging and multimedia has gained traction as an alternative for voice services, and there is a clear trend towards services supported by 3G networks as these are expanded by network operators.

El Salvador’s fixed-line teledensity is substantially lower than the Latin American and Caribbean average. However, there was a 10% drop in the number of fixed lines in 2010 alone, largely due to the substitution for mobile-only alternatives.

Mobile penetration is remarkably high based on El Salvador’s economic indicators, being about 35% higher than average for Latin America and the Caribbean. Of the estimated total number of telephones in the country, 11% are fixed and 91% are mobile.

El Salvador’s telecom legislation is one of the more liberal in Latin America, encouraging competition in most aspects of the telecoms sector and permitting foreign investment in all areas. However, there are no regulations as yet which promote wholesale broadband, and thus the ADSL market remains a virtual monopoly for Claro. The only effective cross-platform competition in the broadband market comes from the few cable operators.

Although many companies launched services when the telecom sector was liberalised, the market has been undergoing a gradual process of consolidation, leaving a few dominant multinational operators (notably Millicom’s Tigo, América Móvil’s Claro, and Telefónica’s Movistar), which have managed to expand into almost all sectors through a process of convergence.

The mobile market is served by five operators: Tigo, Movistar, Claro, Digicel (sold to Claro’s parent company), and Intelfon. Mobile penetration is high by regional standards.

The fastest growing sectors in coming years will continue to be pay TV and broadband, both fixed and mobile. The outlook is especially promising for mobile broadband, which could help to bolster the slipping mobile ARPU figures in the medium term. The longer-term prospect is also promising, particularly in the mobile sector where competition between Claro, Tigo, and Telefónica will oblige the operators to diversify services and reduce prices.

El Salvador – key telecom parameters – 2010; 2012
Category (million) | 2010 | 2012 (e)
Fixed-line subscribers | 0.98 | 1.04
Internet users | 0.98 | 1.51
Broadband subscribers | 0.147 | 0.248
Mobile subscribers | 7.52 | 8.91
(Source: BuddeComm)

Market highlights:

CTE Telecom, trading as Claro, is the incumbent fixed-line operator in the country. The CTE brand was discontinued in 2009, and all services were unified under the Claro brand name, including mobile and fixed-line telephony, ADSL and mobile broadband, as well as cable and satellite TV. Claro is the dominant fixed-line operator and ADSL provider in El Salvador.

The main altnet Tigo has expanded from its original mobile telephony business, incorporating cable TV and other IP services through its acquisition of Amnet. In 2012 Amnet purchased Telefónica Multiservicios’s fixed telephony and internet clients.

Movistar’s services, including fixed-line and fixed-wireless services, mobile services, cable broadband, and cable TV, have been unified under a single brand name.

In 2011 América Móvil acquired Digicel’s network in El Salvador and Honduras in exchange for the latter’s operations in Jamaica. The Honduras and Jamaica parts of the deal were agreed by May 2012 though the El Salvador part has stalled on regulatory concerns on the surrender of spectrum.

In late 2012 the regulator confirmed plans to complete ASO by 2018.

Henry Lancaster December 2012

Data in this report is the latest available at the time of preparation and may not be for the current year.

This report provides a comprehensive overview of trends and developments in El Salvador’s telecommunications market. With its long-established liberalisation, El Salvador is an attractive market for telecom investors. The report analyses the mobile, internet, broadband, digital TV and converging media sectors.

Subjects include:

Market and industry analyses, trends and developments;
Facts, figures and statistics;
Industry and regulatory issues;
Major players, revenues, subscribers, ARPU;
Internet, IPTV;
Mobile voice and data markets;
Broadband (FttH, DSL, cable TV, wireless);
Convergence and Digital Media.

Key developments:

Regulator’s market data for 2011; telcos’ financial and operating data to Q2 2012; market developments to mid-2012.

Companies covered in this report include:

América Móvil (Claro), Millicent International (Tigo), Telefónica (Movistar), Red, GCA Telecom, Salnet, Amnet, Sky TV.

1. Executive summary
2. Key statistics
3. Telecommunications market
3.1 Country overview
3.2 Overview of El Salvador’s telecom market
3.3 Market analysis – 2012
4. Regulatory environment
4.1 Background
4.2 Regulatory authority
4.2.1 Superintendencia General de Electricidad y Telecomunicaciones (Siget)
4.3 Telecom sector liberalisation in El Salvador
4.4 Privatisation of Antel
5. Fixed network operators in El Salvador
5.1 Overview of operators
5.2 Claro/CTE Telecom (América Móvil)
5.3 Telefónica/Movistar
6. Telecommunications infrastructure
6.1 National telecom network
6.1.1 Fixed-line statistics
6.1.2 Public payphones
6.2 International infrastructure
6.2.1 Interconnection with other Central American countries
6.2.2 Submarine cable networks
6.2.3 Satellite networks
6.3 Infrastructure developments
6.3.1 Wireless Local Loop (WLL)
6.3.2 IP and Voice over Internet Protocol (VoIP)
7. Wholesale
8. Broadband
8.1 Overview
8.1.1 Broadband statistics
8.2 Digital media
8.2.1 Overview of media convergence
9. Broadcasting
9.1 Pay TV overview
9.2 Cable TV
9.2.1 Tigo (Millicom)
9.3 Satellite-based digital pay TV developments
9.4 Digital terrestrial TV
10. Mobile communications
10.1 Overview of El Salvador’s mobile market
10.1.1 Mobile statistics
10.2 Mobile technologies
10.2.1 Overview
10.2.2 Third generation (3G) mobile
10.3 Major mobile operators
10.3.1 Tigo (Millicom)
10.3.2 Claro (América Móvil)
10.3.3 Movistar (Telefónica Móviles)
10.3.4 Digicel
10.3.5 RED (Intelfon)
10.4 Mobile broadband
10.5 Mobile satellite
11. Related reports
List of Tables, Charts and Exhibits
Table 1 – Country statistics El Salvador – 2012 (e)
Table 2 – Telephone network statistics – 2012 (e)
Table 3 – Internet user statistics –
Table 4 – Broadband statistics – 2012 (e)
Table 5 – Mobile statistics – 2012 (e)
Table 6 – National telecommunications authority
Table 7 – Evolution of GDP in El Salvador – 2000 - 2012
Table 8 – Telecommunications service revenue and capital investment – 2000 - 2011
Table 9 – Claro – fixed lines in service – 2003 - 2009
Table 10 – Fixed lines in service and teledensity – 1997 - 2012
Table 11 – Public payphones (with prepaid cards) – 1999 – 2011
Table 12 – Internet users and penetration rate – 1996 - 2012
Table 13 – Broadband subscribers and penetration rates – 2002 – 2013
Table 14 – ADSL subscribers – 2003 - 2012
Table 15 – Mobile subscribers and penetration rate – 1997 - 2012
Table 16 – Mobile operators’ market share – 2003 - 2012
Table 17 – Prepaid/postpaid ratio – 2002 - 2012
Table 18 – Prepaid/postpaid subscribers – 2008 - 2012
Table 19 – Tigo – mobile subscribers – 1997 – 2012
Table 20 – Claro – mobile subscribers – 2002 - 2011
Table 21 – Movistar – mobile subscribers – 2000 - 2012
Table 22 – Digicel – mobile subscribers – 2003 - 2011
Table 23 – RED – mobile subscribers – 2005 - 2012
Chart 1 – Fixed lines in service and teledensity – 2002 – 2012
Chart 2 – Broadband subscribers and penetration rates – 2002 – 2013
Chart 3 – Mobile subscribers and penetration rate – 2002 – 2012
Chart 4 – Tigo – mobile subscribers – 2002 – 2012
Exhibit 1 – Americatel – historical
Exhibit 2 – Saltel – historical
Exhibit 3 – Claro/CTE Telecom – company history
Exhibit 4 – Amnet – historical
Exhibit 5 – Tigo/Telemóvil – company history

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