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2008 Latin America - Telecoms, Mobile and Broadband in Central America

The Central American countries are Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama, all of which are small countries with generally low GDP per capita but with considerable scope for development in all telecom sectors. This annual report offers a wealth of information on the trends and developments in fixed-line telephony, mobile telephony, Internet, broadband, digital TV, and converging media including VoIP and IPTV developments.

Subjects include:

  • Key statistics and forecasts;
  • Market and industry overviews;
  • Government policies and regulatory issues;
  • Historical information;
  • Major players (fixed-line, mobile, broadband, and pay TV);
  • Telecom infrastructure (national and international, fixed and wireless);
  • Mobile voice and data markets;
  • Internet market and VoIP;
  • Broadband (DSL, cable, wireless);
  • Convergence, pay TV, and developments in digital TV.
Researcher: Lucia Bibolini

Edition: 7th


Central America is a tropical isthmus that connects North and South America, and separates the Caribbean from the Pacific. It comprises the seven republics of Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. The region is relatively small, extending for about 524,000km². The land is fertile and rugged, and dominated by a string of volcanic mountain ranges.

Belize: While geographically part of Central America, Belize has much in common with its Caribbean Island neighbours. The Belizean telecom market was officially liberalised in January 2003, yet the incumbent, Belize Telecommunications (BTL), still holds a virtual monopoly. With scant competition and ineffective regulatory control, it has been able to charge exorbitant rates for its services. A controversy over VoIP is a case in point. Although both the government and the regulator declared that they wanted to move the telecom sector towards greater competition, in practice BTL lobbied against VoIP and has been able to block any possible competitors from using VoIP. BTL does, however, face competition in the mobile sector, where SpeedNet launched services in March 2005 under the brand name Smart, and succeeded in carving out about 18% of the market after only 15 months of operation.

Costa Rica: State-owned Instituto Costarricense de Electricidad (ICE) and its subsidiary RACSA are the monopoly providers of virtually all telecom services except for pay TV and paging. While this situation worked in the past, it is now leading to considerable problems, such as long waiting lists for phones, poor service quality, obsolescence, and lack of investment. Although it has one of the highest fixed-line teledensity rates in Latin America, Costa Rica’s mobile penetration is significantly lower than the regional average and well below what could be expected given its relatively high GDP per capita. The preliminary signing of the Dominican Republic-Central American Free-Trade Agreement (DR-CAFTA) in January 2004 marked a significant step for Costa Rica, as DR-CAFTA calls for the liberalisation of some telecom services. But the Costa Rican population is deeply divided over DR-CAFTA, and the ratification of the agreement has been delayed, together with any liberalisation plans.

El Salvador: The country’s telecom market is among the most open in Central America. The government’s liberal approach has allowed new technologies to flourish. Fixed-line teledensity, however, remains low. Despite growing steadily, phone lines, mainly in rural areas, are insufficient to meet local demand. Mobile telcos have capitalised on the underdeveloped fixed-line network by emphasising their ability to offer a fast, high-quality service with nationwide coverage. At more than 42%, El Salvador’s mobile penetration is lower than the Latin American average, but is remarkably high considering the country’s low GDP per capita. The mobile market is served by five competing operators, and there are about three times as many mobile phones as fixed lines in service. With a budding VoIP market, and cable TV telcos permitted to provide telephony and Internet, El Salvador is a promising country for convergence strategies. Two operators already offer triple play services.

Guatemala: The largest telecom market in Central America, Guatemala has been held back by poverty, income inequality, and violence. The distribution of income in Guatemala is highly unequal, with around 75% of the population below the poverty line. The telephone system reflects this inequality, with a relatively modern network centred in Guatemala City, but one of the lowest teledensity rates in the region. Outside the capital, the rest of the country’s fixed-line infrastructure is inadequate and antiquated, though much improved since the telecom sector was liberalised in 1996. Mobile telephony is the fastest growing market. There are about four times as many mobile phones as fixed lines in service. While mobile penetration is about 20% lower than the Latin American average, it is remarkably high considering that the country’s GDP per capita is roughly one-half that of the region as a whole.

Honduras: One of the poorest countries in the Latin America, Honduras has one of the least developed telecom infrastructures and the fourth lowest teledensity in the region. Fixed-line telephony was officially opened to competition in December 2005. A New Telecom Law governing full liberalisation, however, has been delayed due to political controversy over the role of Empresa Hondureña de Telecomunicaciones (Hondutel), the state-owned national telecom provider. Efforts to privatise the incumbent have so far failed to come to fruition, and are awaiting the New Telecom Law to be passed. Two companies compete in the mobile market: Millicom’s Tigo and América Móvil’s Claro. Unsatisfied demand for basic telephony has driven a veritable boom in the mobile market, with annual growth rates of around 80%.

Nicaragua: With the second lowest fixed-line teledensity in Latin America (after Haiti), Nicaragua is one of a growing list of countries leapfrogging directly into mobile communications. Nicaragua’s mobile phones exceed the number of fixed lines in service by almost seven to one. In fact, while Nicaragua’s fixed-line teledensity is the second lowest in Latin America, its mobile penetration is the fifth lowest, surpassing Honduras, Peru, Haiti, and Cuba. Since 2004, the country’s mobile market has been growing at an average annual rate of approximately 60%. Liberalisation of the fixed-line market is still awaiting proper implementation, having been delayed by political and legal wrangles. América Móvil’s Enitel holds a virtual monopoly over the country’s fixed lines. The mobile market, on the other hand, is a lively duopoly between Telefónica’s Movistar and América Móvil’s Claro, the latter clearly in the lead with a 70% market share.

Panama: With significant telecom infrastructure, a liberalised market, and serviced by five global fibre optic cables, Panama is an attractive country for telecom investments, especially following the October 2006 decision to broaden the Panama Canal. Competition, however, is slow to develop in basic telephony, where the incumbent Cable & Wireless Panamá (C&WP) is reluctant to unbundle its local network, but the long distance sector has attracted several players, leading to huge price drops, especially in international calls. During 2006, C&WP was the Panamanian public services company that incurred the most complaints. Its mobile unit, trading as +Movil, has a 50% share of the mobile market; Telefónica’s Movistar has the other 50%. In the Internet market, although penetration is still low, dial-up and ADSL connections are developing at a fast pace; growth potential in this sector is excellent. The leading cable TV company, Cable Onda, has started to offer Triple Play services (converged broadband, telephony and pay TV).

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

1. Belize
1.1 Key statistics
1.2 Telecommunications market
1.2.1 Overview of Belize’s telecom market
1.3 Regulatory environment
1.3.1 Background
1.3.2 Regulatory authority
1.3.3 Telecom sector liberalisation
1.4 Telecom network operators in Belize
1.4.1 Overview of operators
1.4.2 Belize Telemedia Limited (BTL)
1.5 Telecommunications infrastructure
1.5.1 National telecom networks
1.5.2 Infrastructure developments
1.5.3 International infrastructure
1.6 Internet market
1.6.1 Overview
1.7 Broadband market
1.8 Convergence
1.8.1 Overview of media convergence
1.8.2 Overview of broadcasting market
1.9 Mobile communications
1.9.1 Overview of Belize’s mobile market
1.9.2 Mobile technologies and data services
1.9.3 Major mobile operators
2. Costa Rica
2.1 Key statistics
2.2 Telecommunications market
2.2.1 Overview of Costa Rica’s telecom market
2.3 Regulatory environment
2.3.1 Background
2.3.2 Regulatory authority
2.3.3 Telecom sector liberalisation
2.3.4 DR-CAFTA
2.4 Telecom network operators in Costa Rica
2.4.1 ICE
2.5 Telecommunications infrastructure
2.5.1 National telecom networks
2.5.2 International infrastructure
2.5.3 Infrastructure developments
2.6 Internet market
2.6.1 Overview
2.7 Broadband market
2.7.1 Overview
2.7.2 Cable modems
2.7.3 Asymmetrical Digital Subscriber Line (ADSL)
2.7.4 Broadband over Powerline (BPL)
2.7.5 Wireless broadband
2.8 Convergence
2.8.1 Overview of media convergence
2.8.2 Cable TV (CATV)
2.8.3 Satellite TV
2.9 Mobile communications
2.9.1 Overview of Costa Rica’s mobile market
2.9.2 Mobile technologies and data services
2.9.3 Major mobile operators
3. El Salvador
3.1 Key statistics
3.2 Telecommunications market
3.2.1 Overview of El Salvador’s telecom market
3.3 Regulatory environment
3.3.1 Telecommunications law
3.3.2 Regulatory authority
3.3.3 Privatisation of Antel
3.3.4 Telecom sector liberalisation in El Salvador
3.3.5 DR-CAFTA
3.4 Telecom network operators in El Salvador
3.4.1 Overview of operators
3.4.2 CTE Telecom (América Móvil)
3.4.3 Telefónica
3.5 Telecommunications infrastructure
3.5.1 National telecom networks
3.5.2 International infrastructure
3.5.3 Infrastructure developments
3.6 Internet market
3.6.1 Overview
3.7 Broadband market
3.7.1 Overview
3.7.2 Asymmetrical Digital Subscriber Line (ADSL)
3.7.3 WiMAX
3.8 Convergence
3.8.1 Overview of media convergence
3.8.2 Cable TV
3.8.3 Satellite TV
3.9 Mobile communications
3.9.1 Overview of El Salvador’s mobile market
3.9.2 Mobile technologies and data services
3.9.3 Major mobile operators
4. Guatemala
4.1 Key statistics
4.2 Telecommunications market
4.2.1 Overview of Guatemala’s telecom market
4.3 Regulatory environment
4.3.1 History
4.3.2 Regulatory authority
4.3.3 Telecom sector liberalisation in Guatemala
4.3.4 Privatisation of Guatel/Telgua
4.3.5 DR-CAFTA
4.3.6 Interconnection
4.3.7 Foreign investments
4.4 Telecom network operators in Guatemala
4.4.1 Overview of operators
4.4.2 Telgua (América Móvil)
4.4.3 TEM Guatemala (Telefónica)
4.5 Telecommunications infrastructure
4.5.1 National telecom networks
4.5.2 International infrastructure
4.5.3 Infrastructure developments
4.6 Internet market
4.6.1 Overview
4.7 Broadband market
4.7.1 Overview
4.7.2 Asymmetrical Digital Subscriber Line (ADSL)
4.7.3 WiFi
4.7.4 WiMAX
4.7.5 Broadband providers
4.8 Convergence
4.8.1 Overview of media convergence
4.8.2 Cable TV
4.8.3 Satellite TV
4.9 Mobile communications
4.9.1 Overview of Guatemala’s mobile market
4.9.2 Mobile technologies and data services
4.9.3 Major mobile operators
4.9.4 Mobile voice services in Guatemala
5. Honduras
5.1 Key statistics
5.2 Telecommunications market
5.2.1 Overview of Honduran telecom market
5.3 Regulatory environment
5.3.1 Regulatory authority
5.3.2 Privatisation
5.3.3 DR-CAFTA
5.3.4 Foreign investment
5.3.5 Telecom sector liberalisation in Honduras
5.3.6 ‘Telephony For All’ program
5.4 Telecom network operators in Honduras
5.4.1 Hondutel
5.4.2 Multifon
5.4.3 Tele+ (Comunitel)
5.5 Telecommunications infrastructure
5.5.1 National telecom networks
5.5.2 International infrastructure
5.5.3 Infrastructure developments
5.6 Internet market
5.6.1 Overview
5.7 Broadband market
5.7.1 Overview
5.8 Convergence
5.8.1 Overview of media convergence
5.8.2 Cable TV
5.8.3 Satellite TV
5.8.4 Digital terrestrial TV
5.9 Mobile communications
5.9.1 Overview of the Honduran mobile market
5.9.2 Mobile technologies and data services
5.9.3 Major mobile operators
6. Nicaragua
6.1 Key statistics
6.2 Telecommunications market
6.2.1 Overview of Nicaragua’s telecom market
6.3 Regulatory environment
6.3.1 Background
6.3.2 Regulatory authority
6.3.3 Privatisation
6.3.4 Telecom sector liberalisation in Nicaragua
6.3.5 DR-CAFTA
6.4 Telecom network operators in Nicaragua
6.4.1 Enitel
6.4.2 Movistar (Telefónica)
6.5 Telecommunications infrastructure
6.5.1 National telecom networks
6.5.2 International infrastructure
6.5.3 Infrastructure developments
6.6 Internet market
6.6.1 Overview
6.7 Broadband market
6.7.1 Overview
6.8 Convergence
6.8.1 Overview of media convergence
6.8.2 Cable TV (CATV)
6.8.3 Satellite TV
6.9 Mobile communications
6.9.1 Overview of Nicaragua’s mobile market
6.9.2 Mobile technologies and data services
6.9.3 Major mobile operators
6.9.4 Satellite mobile
7. Panama
7.1 Key statistics
7.2 Telecommunications market
7.2.1 Overview of Panama’s telecom market
7.3 Regulatory environment
7.3.1 Regulatory authority
7.3.2 Privatisation of INTEL
7.3.3 Telecom sector liberalisation
7.3.4 Number portability
7.3.5 Free Trade Agreement
7.4 Telecom network operators in Panama
7.4.1 Cable & Wireless Panamá
7.4.2 Telecarrier
7.4.3 Galaxy Communications Corp (ClaroCOM)
7.4.4 Advanced Communication Network
7.4.5 Optynex Telecom
7.5 Telecommunications infrastructure
7.5.1 National telecom networks
7.5.2 International infrastructure
7.5.3 Infrastructure developments
7.6 Internet market
7.6.1 Overview
7.7 Broadband market
7.7.1 Overview
7.8 Convergence
7.8.1 Overview of media convergence
7.8.2 Triple play models
7.8.3 Cable TV
7.8.4 Satellite TV
7.8.5 IPTV (Broadband TV)
7.9 Mobile communications
7.9.1 Overview of Panama’s mobile market
7.9.2 Spectrum auction - March 2008
7.9.3 Mobile technologies and data services
7.9.4 Major mobile operators
7.10 Forecasts
7.10.1 Forecasts - fixed-line market to 2017
7.10.2 Forecasts - mobile services to 2017
8. Glossary of Abbreviations


List of Tables


Table 1 - Country statistics Belize - 2008
Table 2 - Telephone network statistics - 2007
Table 3 - Internet user statistics - 2007
Table 4 - Broadband statistics - 2007
Table 5 - Mobile statistics - 2007
Table 6 - National telecommunications authority
Table 7 - BTL - Fixed lines, annual change, and payphones - 2002 - 2007
Table 8 - Fixed lines in service, annual change and teledensity - 1996 - 2007
Table 9 - Internet users, annual change and user penetration - 1996 - 2007
Table 10 - BTL high-speed Internet subscribers, annual change and penetration - 2005 - 2007
Table 11 - Mobile subscribers, annual change and penetration - 1999 - 2007
Table 12 - Mobile market share by operator - 2005 - 2007
Table 13 - BTL mobile subscribers and annual change - 2004 - 2007
Table 14 - SpeedNet mobile subscribers and annual change - 2005 - 2007
Table 15 - Country statistics Costa Rica - 2008
Table 16 - Telephone network statistics - 2007
Table 17 - Internet user statistics - 2007
Table 18 - Broadband statistics - 2006
Table 19 - Mobile statistics - September 2007
Table 20 - National telecommunications authority
Table 21 - Fixed lines in service, annual change and teledensity - 1996 - 2007
Table 22 - Public payphones and annual change - 2000 - 2006
Table 23 - Internet users, annual change and user penetration - 1997 - 2007
Table 24 - Dial-up subscribers, annual change and penetration - 1997 - 2006
Table 25 - Broadband subscribers, per capita and household penetration - 2000 - 2006
Table 26 - Broadband market share by technology - 2003 - 2006
Table 27 - Cable modem subscribers, annual change and household penetration - 2000 - 2006
Table 28 - ADSL subscribers, annual change and household penetration - 2003 - 2006

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