- Publication ID
- Publication Date
- May 8, 2014
- Regions Covered
- Paul Budde Communication Pty Ltd.
- Market and industry analyses, trends and developments;
- Facts, figures, and statistics;
- Government policies and regulatory issues;
- Major players (fixed, mobile and broadband);
- Fixed-line market and infrastructure;
- Broadband market (including ADSL, cable modem, FttH, and WiMAX);
- Internet and VoIP;
- Convergence and triple play solutions;
- Broadcasting (including cable TV, satellite-based TV services, and digital terrestrial TV);
- Mobile market (including 3G, LTE/4G, and mobile broadband);
- Scenario forecasts for the fixed-line, mobile, and broadband markets for the years 2015 and 2020.
Notes on scenario forecasts
- The following notes provide some background to our scenario forecasting methodology:
- This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur.
- The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15%-20% around this data.
- All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.
LTE networks spread across Latin America and the Caribbean
- 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 marketDespite 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
- 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).
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)
- 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.
- 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.
1. National Comparisons
7. Dominican Republic
14. Puerto Rico
List of Table
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