Executive summary
Political interference keeping telecom reform at bay
Among the poorest countries in Central America, with some 70% of the population living below the poverty line, Honduras has long been plagued by an unstable political framework which has rendered telecom reform difficult. Reform is critical if the country is to address some of the poorest market statistics in the region.
Fixed-line teledensity at only 7% is significantly lower than the Latin American and Caribbean average. Poor fixed-line infrastructure has been exacerbated by low investment and difficulties in local terrain which have made investment in rural areas unattractive or uneconomical. As a consequence, the internet has been slow to develop in Honduras: DSL and cable modem technologies are available but relatively expensive, while higher speed services are largely restricted to the major urban centres. Nevertheless, the demand for broadband is steadily increasing and there are has been some investment in network upgrades to fibre-based infrastructure, albeit in the main cities. Poor fixed-line connectivity has also inhibited the take-up of VoIP, which would otherwise be a preferred communications medium to expensive domestic calls.
On the positive side, these factors have encouraged consumer take-up of mobile services, a sector where there is lively competition supported by international investment and know-how. As a result, mobile penetration is about 20% above the regional average. Revenue from the mobile sector looks promising in coming years as operators invest in their networks, expanding their reach and upgrading their capabilities to accommodate mobile broadband services. Mobile data as a proportion of overall mobile revenue is likely to double in 2012, though low-end SMS services will continue to account for the bulk of data revenue for some years.
Political developments during the last few years have not facilitated the much-needed reform of legislation governing the telecoms sector. Partly this is due to political stalemate and ineffective legislators, but underlying the difficulties are the close ties between executives at the incumbent Hondutel and key members of the government. Charges of bribery and corruption are rife, and though the framework for reforming the Telecommunications Act remains before the Honduran Congress, there is little prospect of effective change in the short term which would bring about a properly competitive and fair market for some services.
Key highlights:
- Despite infrastructure limitations VoIP telephony is increasingly used an as alternative phone, mainly for considerations of cost.
- High mobile voice penetration has left limited room for further growth, yet low mobile data use will provide operators with considerable opportunities in coming years, stimulated by the migration among uses from basic handsets to smartphones and by the continuing shift from fixed telephony to mobile use. Although the 3G base remains low, at about 4% of all mobile subscribers, investment in network upgrades aims to address infrastructure shortcomings and increase the number of 3G subscribers as well as the proportion of high-end mobile data revenue to overall mobile revenue.
- Despite a 46% growth in its subscriber base in Honduras in 2010, Digicel recently signed a deal to sell its businesses in El Salvador and Honduras to América Movil, which operates the Claro brand. The deal will have significant implications for the sector’s competitive environment, but will provide benefits of scale to América Movil which should assist its network development.
Honduras – key telecom parameters – 2010; 2012
Category
| 2010
| 2012 (e)
|
|---|
Fixed-line service
|
|---|
Total lines in service
| 669,000
| 570,000
|
Annual growth
| -6.5%
| -12.20
|
Teledensity
| 8.3%
| 7.2%
|
Internet
|
|---|
Internet users
| 892,000
| 1,310,000
|
Annual growth
| 22%
| 22%
|
Internet users penetration
| 11.2%
| 16.1%
|
Mobile telephony subscribers
|
|---|
Total number of subscribers (million)
| 9.5
| 7.7
|
Annual growth
| -13%
| 1%
|
Mobile penetration rate
| 118.3%
| 93.2%
|
(Source: BuddeComm)
Lucia Bibolini
October 2011
Data in this report is the latest available at the time of preparation and may not be for the current year.
This report covers trends and developments in the telecommunications, mobile, internet and broadband market in Honduras. Subjects include:
- Market and industry analyses, trends and developments;
- Facts, figures and statistics;
- Industry and regulatory issues;
- Infrastructure development;
- Major Players, Revenues, Subscribers;
- VoIP;
- Mobile Voice and Data Markets;
- Internet and broadband markets (DSL, cable modem, wireless);
- Mobile market (including 3G and mobile broadband).
