Executive summary
Mobile broadband touted as the solution to Ecuador’s low fixed broadband penetration
Ecuador is one of the poorer countries in South America, with the fourth lowest GDP per capita. Nevertheless, the country’s telecom market is expanding rapidly. Telecom services revenue grew by an estimated 10% in 2010. Projections for 2011 show an increase of 8% or 9%. The fixed-line sector is responsible for about 20% of telecom revenue, and the mobile sector for 80%.
Indeed, Ecuador’s telecom market is heavily skewed towards mobile services. While fixed-line teledensity lags considerably behind other Latin American countries, mobile penetration is higher than the regional average. In 2011, of the estimated total number of telephones in the country, 11% are fixed and 89% are mobile.
Three operators compete in the mobile market:
- Conecel – the market leader, controlled by Mexico’s América Móvil, and trading as Claro;
- Otecel – controlled by Spain’s Telefónica, and trading as Movistar;
- Telecsa – controlled by state-owned incumbent CNT, and trading as Alegro.
Although mobile penetration has passed the 100% milestone, this does not mean that everyone in Ecuador has a mobile phone. With more than a third of the population living below the poverty line, many Ecuadorians are unable to afford the service. Subscription numbers are boosted by those who have multiple accounts. Some Ecuadorians have one phone for work and one for personal use; some have one phone for each mobile company to take advantage of special offers; and some require two SIM cards, one for their phone and one for their USB modem for mobile broadband access.
Mobile operators in Ecuador have been promoting mobile broadband as an alternative to fixed broadband. Considering the country’s low teledensity and fixed broadband penetration, Ecuador’s mobile broadband market is expected to grow strongly in the coming years.
On the other hand, CNT will continue to capitalise on its ADSL service, which only took off in 2009 and still has significant unsatisfied demand. CNT dominates Ecuador’s fixed telecom sector, with a market share of about 90% of the country’s main lines as well as 90% of the ADSL market.
Besides CNT, there are another eight fixed-line operators and a large number of broadband providers. Thanks to cross-technology competition, CNT only controls 54% of the fixed broadband market, its main rival being cable TV provider TVCable, which has a 23% market share and offers cable modem access alone or as part of a triple play package (including pay TV, broadband, and telephony).
The government is keen to advance universalisation and improve teledensity. Although it failed to meet the aims it outlined in 2008, when it hoped to achieve 19% teledensity by 2010, we can expect CNT to continue its efforts to expand the country’s fixed-line infrastructure.
Market highlights:
- CNT has undertaken projects to upgrade the national telecom network, including NGN expansion, installing fibre optic cables, and the deployment of wireless systems using CDMA-450 technology. The government plans to invest a further US$400 million by 2013 on infrastructure.
- América Móvil’s Ecuadorian mobile unit Conecel has dropped its long-standing Porta brand in favour of Claro. The Mexican group’s fixed-line unit Ecuadortelecom has also started to trade under the Claro name, thus uniting all América Móvil services in the country under the one brand.
- Claro plans to conduct tests on 4G Long Term Evolution (LTE) technology.
- CNT has absorbed mobile operator Alegro and launched 3G UMTS services branded ‘Niu 3.5G’.
- CNT is adding satellite TV to its service portfolio thanks to a partnership with Movistar Peru’s Media Networks. The service will be offered as part of a triple-play package including broadband, telephony, and pay TV.
- Ecuador’s Deposit Guarantee Agency is auctioning a 35% stake in leading cable TV company TVCable. Due to previous unsuccessful tenders, the value of the stake has fallen by 20%.
Companies covered in this report:
- Fixed line operators include CNT, Etapa, TVCable (Suratel), Claro (Ecuadortelecom, ex Telmex), Linkotel, Etapatelecom, Global Crossing, Grupo Coripar, and Starsat.
- Mobile operators include Claro, Movistar, and Alegro.
- Broadband providers include CNT, TVCable, Claro, Transtelco, Easynet, PuntoNet, Interactive/Zenix (previously Lutrol), Panchonet, Empresa Eléctrica Azogues, Empresa Eléctrica Regional Centrosur, Transelectric, and Telconet.
- Pay TV providers include TVCable, Claro, and DirecTV.
Ecuador – key telecom parameters – 2010 - 2011
Category
| 2010
| 2011 (e)
|
|---|
Fixed-line service
|
|---|
Total lines in service (million)
| 2.05
| 2.12
|
Annual growth
| 2.5%
| 3.2%
|
Teledensity
| 14.5%
| 14.7%
|
Broadband
|
|---|
Total number of subscribers
| 458,000
| 600,000
|
Annual growth
| 55%
| 31%
|
Penetration rate
| 3.2%
| 4.2%
|
Mobile telephony subscribers
|
|---|
Total number of subscribers (million)
| 15.12
| 16.40
|
Annual growth
| 12%
| 8%
|
Mobile penetration rate
| 106%
| 114%
|
(Source: BuddeComm)
Ecuador has good long-term growth potential especially in mobile and broadband services. The report covers trends and developments in the fixed-line, mobile, Internet, broadband, and pay TV markets. Subjects include:
- 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, BPL, and WiMAX);
- Internet and VoIP;
- Convergence and triple play solutions;
- Broadcasting (including cable TV and satellite-based TV services);
- Mobile market (including 3G and mobile broadband);
- Scenario forecasts for the fixed-line, mobile, and broadband markets for the years 2015 and 2020.
