Executive summary
Nicaragua is the largest country in Central America, but one of the least densely populated. It has the subregion’s lowest GDP per capita. About 60% of the population live below the poverty line.
Annual GDP growth remains too weak to meet the country’s needs, forcing the government to rely on international economic assistance. Like its economic indicators, Nicaragua’s fixed-line teledensity and mobile penetration are also the lowest in Central America. The broadband market is still embryonic, with less than 1% penetration.
Most Internet users are concentrated in the largest cities because the rural and marginal areas lack access to the most basic telecom infrastructure. A number of Internet cafés provide public access to Internet and email services, but these are also restricted to the larger population centres.
América Móvil’s Claro has a clear leadership in all of Nicaragua’s telecom sectors, including fixed-line, mobile, broadband, and pay TV. Mobile subscribers overtook the country’s main lines in early 2002. At end-2010, of the estimated total number of telephones in the country, 7% were fixed and 93% were mobile.
Telefónica’s Movistar is the only company competing with Claro in the fixed-line and mobile market. In the mobile sector, Movistar holds almost one third of the market, but in the fixed-line sector, it has only about 10% of the country’s fixed lines in service.
Due to a weak regulatory structure and bureaucratic delays, further liberalisation is slow to be implemented. The duopoly situation has dampened the competitive drive; therefore, there has been less effort than in neighbouring countries to improve quality and lower prices. However into 2011 other companies operating in the market were Russian state corporation Rostejnologuii, with Yota Mobile WiMAX and IWB Holding SA which offers Internet services.
The outlook for 2012 in terms of traditional infrastructure is uninspiring. The fixed-line market will probably continue to flatline, while mobile market growth decelerates. The fastest growing sector will undoubtedly be broadband, both fixed and mobile, as the country’s penetration levels are extremely low and demand is rising.
The country does however show interesting developments in terms of e-health and even mobile television. Nascent international collaboration is also taking place in exploring business opportunities in order to promote a digital nation.
As a result, the longer-term prospect is more promising. GDP per capita should eventually increase, and with telecom indicators being so low, there is enormous growth potential for the future, provided the country can free itself from its legacy of violence and corruption. A priority for the government is to develop a universal service plan for economically depressed rural localities, and to bring internet access to all state schools.
With President Daniel Ortega seeking a controversial third term in the November 2011election, both the international community and the people of Nicaragua are closely monitoring this country’s economic progress, as a test to Ortega’s effectiveness and legitimacy as a national leader.
Key highlights:
- Yota de Nicaragua, controlled by Russia’s WiMAX Holding Ltd, rolled out a WiMAX network in the fourth quarter of 2009, with initial coverage over the capital city of Managua. Yota intends to expand the WiMAX infrastructure gradually to other regions of Nicaragua.
- VoIP is open to full competition and there are several companies offering services.
- América Móvil unified all services in Nicaragua (including fixed line, mobile, Internet, and cable TV) under the Claro brand in May 2009, when the Enitel name was discontinued.
- Claro has a near-monopoly over broadband in Nicaragua since acquiring cable TV company Estesa, which was the only company that offered any meaningful competition. Claro’s ADSL and cable modem services are both branded Turbonett Fijo. The cable modem service uses the Hybrid Fibre Coaxial (HFC) network inherited from Estesa.
Nicaragua – key telecom parameters – 2010 - 2011
Category
| 2010
| 2011 (e)
|
|---|
Fixed-line service
|
|---|
Total number of subscribers
| 258,000
| 260,000
|
Teledensity
| 4.4%
| 4.4%
|
Internet
|
|---|
Internet users
| 210,000
| 220,000
|
Internet users penetration
| 3.6%
| 3.8%
|
Broadband
|
|---|
Total number of subscribers
| 48,000
| 49,000
|
Penetration rate
| 0.9%
| 0.9%
|
Mobile telephony subscribers
|
|---|
Total number of subscribers (million)
| 3.57
| 3.90
|
Mobile penetration rate
| 61.4%
| 66.2%
|
(Source: BuddeComm)
Nicaragua 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);
- Infrastructure development;
- Internet and broadband market (DSL, cable modem, wireless);
- Mobile market (including 3G and mobile broadband).
