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Latin America - Telecoms, Mobile and Broadband Forecasts


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Latin America - Telecoms, Mobile and Broadband Forecasts

LTE networks spread across Latin America and the Caribbean

This report includes scenario-based forecasting for the fixed-line, mobile and broadband markets in the major Latin American countries. Scenario forecasting presents us with an opportunity to address the market variables and their likely impact on future growth. Essentially, our scenario forecasts provide bands between higher and lower limits within which growth is expected to occur.

Economic background

The 2014 economic outlook for LAC is uninspiring, with GDP forecast to grow by only 2.5%, well behind the projected world average of 3.6%. Although 2015 is expected to be a more favourable year for the region, GDP growth will still be almost one percentage point behind the global average: 3.0% as opposed to the world’s 3.9%. The region’s best performers in 2014/2015 will be Panama, Peru, Bolivia, Paraguay, and Colombia, where GDP growth is expected to top 4.5%. Panama outshines every other country in the region, with 7.2% growth forecast for 2014 and 6.9% for 2015.

Investment opportunities

The LAC region includes a number of emerging markets that offer attractive investment opportunities. Conditions vary substantially from country to country. Most governments follow pro-business, pro-growth policies, but a few are less supportive of private enterprise. The most promising telecom markets for prospective investors are mobile telephony, fixed and mobile broadband, and pay TV. Also, several countries are developing ambitious national broadband projects, which require substantial investment.

Brazil, LAC’s largest market, is the region’s most popular investment destination. Its telecom regulatory environment is one of the most favourable in Latin America for investors. The provision of telecom services is simply linked to acquiring an authorisation from the regulator.

Privatisation and competition

All governments in the LAC region have introduced some form of liberalisation, especially in the value-added and mobile markets. A few countries still have a monopoly in the local fixed-line telephony sector, notably Guyana, Paraguay, and Uruguay.

In the broadband sector, most incumbents have secured a virtual monopoly in the delivery of ADSL access. The only competition is across technologies, from cable modem and mobile broadband. Local Loop Unbundling is rare in this region, and wholesale activity not very well developed. The concern governments face is the shortage of fixed line infrastructure, tied to the fear that operators will cease to invest in their network if they are forced to unbundle their local loop or lower wholesale prices.

The most competitive telecom sector is the mobile one, with most countries having at least two or three providers contending for market share.

Fixed-line market

Despite a low 18% teledensity (in most Western European countries teledensity ranges between 40% and 60%), fixed-lines in service have grown little since 2001, with consumers favouring mobile devices over traditional phones. New entrants using VoIP, wireless technologies, or triple play solutions are attracting a growing number of subscribers, but their market share remains comparatively small. Almost invariably, the incumbents continue to dominate the fixed line industry.

Fixed broadband market

Estimated fixed broadband penetration in LAC was 9.2% per capita at end-2013, slightly below the world average of 9.8% but ahead of other developing regions.

Hurdles in the Latin American broadband market include:

weak competition and insufficient bandwidth (hence, expensive and/or slow services);
inadequate fixed-line infrastructure (hence, service unavailability in many areas);
low PC penetration, poverty, and unequal income distribution (hence, limited demand).

ADSL is the favoured technology in most countries, but low teledensity limits its availability. Cable modem access has been gaining popularity thanks to triple play solutions comprising voice, internet, and video over HFC cables. The largest proportion of cable modem subscribers can be found in Chile, where this technology accounts for about half of the broadband market.

Fibre-to-the-Premise (FttP) is becoming more widely available throughout the region, but subscription fees are extremely high; therefore, the service still only attracts high-income residential customers and small businesses that require fast connections. The future of FttP is particularly promising in Brazil and Uruguay, the first because of preparations for the 2016 Olympics, the second because the government has started to deploy a nationwide FttP network through state-owned Antel.

Mobile market

Like the rest of the world, LAC is turning increasingly towards mobile solutions and away from the traditional telephone. In fact, the region is well ahead of the world average, having reached an estimated 115% mobile penetration at end-2013 against a global rate of around 96%. However, about 80% of LAC’s mobile subscribers are on prepaid plans.

3G/3.5G UMTS mobile networks (HSPA/HSPA+)

UMTS technologies in Latin America include High-Speed Packet Access (HSPA) and Evolved High-Speed Packet Access (HSPA+), respectively dubbed 3G and 3.5G.

Practically all LAC markets have operating HSPA networks with the exception of Cuba and a few Caribbean island nations. The region has 103 HSPA networks operating in 42 countries, plus there are another 9 networks planned.

LAC’s first HSPA+ networks were launched in 2010 by Movistar in Chile (at 42Mb/s) and by Digicel in Bermuda (at 21Mb/s). Since then, 76 HSPA+ networks have been deployed in 37 countries.

4G mobile networks (LTE)

LTE networks, dubbed 4G, have been spreading across LAC at an impressive rate. The first LAC country to see LTE was Puerto Rico, where three companies launched services in November 2011. Since then, more and more operators have entered the LTE market. Altogether, 38 networks have been deployed in 18 countries, and another 42 operators are planning LTE launches. The region has passed the two-million-subscriber milestone. About three quarters of LAC’s LTE subscribers are in Brazil, where concerted endeavours are being made to prepare the country technologically before it hosts the 2014 FIFA cup and the 2016 Olympic Games.

Digital media

Seven Latin American countries are among the world’s top thirty for Facebook users. Brazil has the highest number of active users in the region, while Chile has the highest ratio of users per capita. With penetration reaching 60%, more than one out of every two Chileans is, in fact, an active Facebook user.

Smartphones

The popularity of social networks is driving sales in a booming smartphone market. Social phones, which bridge the gap between traditional phones and smartphones, are extremely popular in LAC, as they allow access to mail, Twitter, and Facebook.

Smartphone penetration across the region is escalating; it was an estimated 20% at end-2013, and it is forecast to reach 44% by 2017. Thanks to the increasing availability of lower cost models, smartphones are becoming more accessible to middle and lower income groups.

Besides being able to reach more people in a region with poor fixed line coverage, smartphones have another significant advantage when trying to reduce a country’s digital gap: they use a simpler technology compared to the standard computer interface. Many people can handle a mobile phone but cannot operate a computer. Therefore, the growing penetration of smartphones could be a way of including digitally illiterate individuals into the Information Society. This would in turn drive growth in the mobile broadband market and help shore up the revenues of telecom operators.

Market Highlights

Guyana hopes to pass a bill by mid-2014 opening its telecom market to competition.
Virgin Mobile has signed an MVNO agreement with Telefónica to use the Vivo network in Brazil and the Movistar network in Mexico, and is preparing to launch MVNO services in both countries; it already operates in Chile and Colombia.
Costa Rica and Trinidad & Tobago launched Mobile Number Portability (MNP) in 2013, later than most of the other major LAC countries. Honduras and Jamaica are hoping to launch MNP in 2014. Following the successful implementation of MNP, Peru intends to also launch fixed-line number portability in 2014.
Argentina has become an important manufacturer of cell phones and provides about 80% of all devices sold in the country. Driven by Twitter and Facebook, the combined penetration of smart phones and social phones has overtaken traditional devices in Argentina.
With an investment of US$600 million, Colombia’s National Fibre Optic Project aims to deploy over 15,000km of fibre cable.
Perus national broadband plan aims to provide internet connectivity via a fibre-optic backbone to the more remote regions; it could boost broadband penetration from 4% in 2011 to 9% in 2016.
Several submarine fibre optic networks are expected to become ready for service later in 2014, including ACSea, the Pacific Caribbean Cable System (PCCS), and Seabras-1.
Five satellites are scheduled for launch in the second half of 2014: Brazil’s Star One C4 and Star One C5, and Mexico’s SatMex 7, MexSat 1 (MexSat Centenario), and MexSat 2.
Uruguay’s Antel’s has rolled out an FttP network covering more than 720,000 households, of which around 275,000 were connected in March 2014. The operator expects to cover all towns with over 3,500 inhabitants by 2015.
In Argentina, Grupo Clarin’s asset divestment plan has been approved by AFSCA in February 2014. By breaking up its operations into six distinct companies, Grupo Clarin will avoid a forced dismantling under the terms of the new media ownership law.
Brazil’s regulator plans to auction spectrum in the 700MHz band suitable for LTE services.
Telecom Italia has agreed to sell its 22.7% holding in Telecom Argentina to the investment firm Fintech Group. The sale was part of Telecom Italia’s general strategy to raise €4 billion in a bid to revive its business and avoid a credit downgrade.
Data in this report is the latest available at the time of preparation and may not be for the current year.


  • EXECUTIVE SUMMARY
  • NATIONAL COMPARISONS
    • NATIONAL GDP AND POPULATION DATA
      • Table LAC - national GDP and population data (estimates) - 2014
    • FIXED-LINE, INTERNET AND BROADBAND
      • Table LAC countries - fixed lines, broadband, internet - subscribers & penetration 2013 (e)
    • MOBILE SUBSCRIBERS
      • Table LAC region - mobile subscribers and penetration - 2014
      • Table LAC - mobile subscribers and penetration by country - 2012 - 2014
  • ARGENTINA
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • Scenario 1 - higher fixed-line growth
        • Table Argentina - Forecast fixed lines - higher growth scenario -2015; 2020
      • Scenario 2 - lower fixed-line growth
        • Table Argentina - Forecast fixed lines - lower growth scenario -2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • Scenario 1 - higher mobile market growth
        • Table Argentina - Forecast mobile subscribers - higher growth scenario -2015; 2020
      • Scenario 2 - lower mobile market growth
        • Table Argentina - Forecast mobile subscribers - lower growth scenario -2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • Scenario 1 - higher broadband growth
        • Table Argentina - Forecast broadband subscribers - higher growth scenario -2015; 2020
      • Scenario 2 - lower broadband growth
        • Table Argentina - Forecast broadband subscribers - lower growth scenario -2015; 2020
  • BOLIVIA
    • FORECASTS - MOBILE MARKET
      • Table Forecast mobile subscribers and penetration - 2012 - 2013; 2015; 2017
    • FORECASTS - BROADBAND MARKET
      • Table Forecast fixed broadband subscribers and penetration - 2012 - 2013; 2015; 2017
  • BRAZIL
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • Scenario 1 - higher fixed line growth
        • Table Brazil - Forecast fixed lines - higher growth scenario - 2010; 2015; 2020
      • Scenario 2 - lower fixed-line growth
        • Table Brazil - Forecast fixed lines - lower growth scenario - 2010; 2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • Scenario 1 - higher mobile market growth
        • Table Brazil - Forecast mobile subscribers - higher growth scenario -2015; 2020
      • Scenario 2 - lower mobile market growth
        • Table Brazil - Forecast mobile subscribers - lower growth scenario -2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • Scenario 1 - higher broadband growth
        • Table Brazil - Forecast broadband subscribers - higher growth scenario -2015; 2020
      • Scenario 2 - lower broadband growth
        • Table Brazil - Forecast broadband subscribers - lower growth scenario -2015; 2020
  • CHILE
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • Scenario 1 - higher fixed-line growth
        • Table Chile - Forecast fixed lines - higher growth scenario - 2015; 2020
      • Scenario 2 - lower fixed-line growth
        • Table Chile - Forecast fixed lines - lower growth scenario - 2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • Overview
      • Scenario 1 - higher mobile market growth
        • Table Chile - Forecast mobile subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower mobile market growth
        • Table Chile - Forecast mobile subscribers - lower growth scenario - 2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • Overview
      • Scenario 1 - higher broadband growth
        • Table Chile - Forecast broadband subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower broadband growth
        • Table Chile - Forecast broadband subscribers - lower growth scenario - 2015; 2020
  • COLOMBIA
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • Scenario 1 - higher fixed line growth
        • Table Colombia - Forecast fixed lines - higher growth scenario -2015; 2020
      • Scenario 2 - lower fixed line growth
        • Table Colombia - Forecast fixed lines - lower growth scenario -2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • Scenario 1 - higher mobile market growth
        • Table Colombia - Forecast mobile subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower mobile market growth
        • Table Colombia - Forecast mobile subscribers - lower growth scenario - 2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • Scenario 1 - higher broadband growth
        • Table Colombia - Forecast broadband subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower broadband growth
        • Table Colombia - Forecast broadband subscribers - lower growth scenario - 2015; 2020
  • DOMINICAN REPUBLIC
    • FORECAST - MOBILE SUBSCRIBERS 2015; 2016
      • Table Dominican Republic - Forecast mobile subscribers - lower growth scenario - 2011 - 2016
      • Table Dominican Republic - Forecast mobile subscribers - higher market scenario - 2011 - 2016
  • ECUADOR
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • Scenario 1 - higher fixed line growth
        • Table Ecuador - Forecast fixed-line growth - higher growth scenario - 2015; 2020
      • Scenario 2 - lower fixed line growth
        • Table Ecuador - Forecast fixed-line growth - lower growth scenario - 2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • Scenario 1 - higher mobile market growth
        • Table Ecuador - Forecast mobile subscriber growth - higher growth scenario - 2015; 2020
      • Scenario 2 - lower mobile market growth
        • Table Ecuador - Forecast mobile subscriber growth - lower growth scenario - 2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • Scenario 1 - higher broadband growth
        • Table Ecuador - Forecast broadband growth - higher growth scenario - 2015; 2020
      • Scenario 2 - lower broadband growth
        • Table Ecuador - Forecast broadband growth - lower growth scenario - 2015; 2020
  • JAMAICA
    • FORECASTS - BROADBAND SUBSCRIBERS 2015 - 2018
      • Table Forecast broadband subscribers and penetration - 2011 - 2018
    • FORECASTS - MOBILE SUBSCRIBERS 2015 - 2018
      • Table Forecast mobile subscribers and penetration rate - 2018
  • MEXICO
    • FORECASTS - MOBILE MARKET 2016
      • Table Mexico - Forecast mobile subscribers and penetration lower growth scenario - 2011 - 2012; 2016
      • Table Mexico - Forecast mobile subscribers and penetration higher growth scenario - 2011 - 2012; 2016
    • FORECASTS - BROADBAND 2016;2020
      • Table Mexico - Forecast fixed broadband subscribers and penetration rate - lower growth scenario - 2011 - 2016; 2020
      • Table Mexico - Forecast fixed broadband subscribers and penetration - higher growth scenario - 2011 - 2016; 2020
  • PANAMA
    • FORECASTS - FIXED-LINE MARKET 2016
      • Scenario 1 - higher fixed-line growth
        • Table Panama - Forecast fixed-line growth - higher growth scenario - 2011; 2016
      • Scenario 2 - lower fixed-line growth
        • Table Panama - Forecast fixed-line growth - lower growth scenario - 2011; 2016
    • FORECASTS - MOBILE MARKET 2016
      • Scenario 1 - higher mobile market growth
        • Table Panama - Forecast mobile subscriber growth - higher growth scenario - 2011; 2016
      • Scenario 2 - lower mobile market growth
        • Table Panama - Forecast mobile subscriber growth - lower growth scenario - 2011; 2016
    • FORECASTS - FIXED BROADBAND MARKET 2016
      • Scenario 1 - higher broadband growth
        • Table Panama - Forecast broadband growth - higher growth scenario - 2011; 2016
      • Scenario 2 - lower broadband growth
        • Table Panama - Forecast broadband growth - lower growth scenario - 2011; 2016
  • PARAGUAY
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • Scenario 1 - higher fixed-line growth
        • Table Paraguay - Forecast fixed-line subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower fixed-line growth
        • Table Paraguay - Forecast fixed-line subscribers - lower growth scenario - 2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • Scenario 1 - higher mobile market growth
        • Table Paraguay - Forecast mobile subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower mobile market growth
        • Table Paraguay - Forecast mobile subscribers - lower growth scenario - 2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • Scenario 1 - higher broadband growth
        • Table Paraguay - Forecast fixed broadband subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower broadband growth
        • Table Paraguay - Forecast broadband subscribers - lower growth scenario - 2015; 2020
  • PERU
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • Scenario 1 - higher fixed line growth
        • Table Peru - Forecast fixed line growth - higher growth scenario - 2015; 2020
      • Scenario 2 - lower fixed line growth
        • Table Peru - Forecast fixed line growth - lower growth scenario - 2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • Scenario 1 - higher mobile market growth
        • Table Peru - Forecast mobile subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower mobile market growth
        • Table Peru - Forecast mobile subscribers - lower growth scenario - 2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • Scenario 1 - higher broadband growth
        • Table Peru - Forecast broadband subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower broadband growth
        • Table Peru - Forecast broadband subscribers - lower growth scenario - 2015; 2020
  • PUERTO RICO
    • FORECASTS -MOBILE SUBSCRIBERS 2015;2020
      • Table Puerto Rico - Forecast mobile subscribers - higher growth scenario - 2011 - 2015; 2020
      • Table Puerto Rico - Forecast mobile subscribers - lower growth scenario - 2011 - 2015; 2020
  • URUGUAY
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • Scenario 1 - higher fixed line growth
        • Table Uruguay - Forecast fixed line subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower fixed line growth
        • Table Uruguay - Forecast fixed line subscribers - lower growth scenario - 2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • Scenario 1 - higher mobile market growth
        • Table Uruguay - Forecast mobile subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower mobile market growth
        • Table Uruguay - Forecast mobile subscribers - lower growth scenario - 2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • Scenario 1 - higher broadband growth
        • Table Uruguay - Forecast fixed broadband subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower broadband growth
        • Table Uruguay - Forecast broadband subscribers - lower growth scenario - 2015; 2020
  • VENEZUELA
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • Scenario 1 - higher fixed line growth
        • Table Venezuela - Forecast fixed lines - higher growth scenario - 2015; 2020
      • Scenario 2 - lower fixed line growth
        • Table Venezuela - Forecast fixed lines - lower growth scenario - 2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • Scenario 1 - higher mobile market growth
        • Table Venezuela - Forecast mobile subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower mobile market growth
        • Table Venezuela - Forecast mobile subscribers - lower growth scenario - 2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • Scenario 1 - higher broadband growth
        • Table Venezuela - Forecast broadband subscribers - higher growth scenario - 2015; 2020
      • Scenario 2 - lower broadband growth
        • Table Venezuela - Forecast broadband subscribers - lower growth scenario - 2015; 2020

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