Executive summary
Paraguay has 14 mobile phones for every fixed line
Paraguay is a landlocked nation in the heart of South America. About one third of the population live below the poverty line, and GDP per capita is one of the lowest in the region. But in 2010, the country’s economy grew by 14.5% – the highest growth rate in Latin America and the Caribbean. The country’s telecom market has considerable potential, its fixed-line and broadband indicators being among the lowest in Latin America. The outlook for the private sector is positive; in fact, Paraguay is becoming increasingly attractive for foreign investors.
The state-owned incumbent, Corporación Paraguaya de Comunicaciones (Copaco), has a monopoly over all fixed-line voice services, including local, domestic long distance, international telephony, and VoIP. In the mobile market, instead, there has been competition since 1998. The internet market is also open to competition, and there are over a dozen ISPs offering services. Copaco lost its monopoly over the international backbone for internet connectivity in early 2009.
Copaco is known for inefficiency and corruption, and Paraguay’s teledensity is the third lowest in the region after Haiti and Nicaragua.
The inadequacy of the country’s fixed-line infrastructure has been a bonanza for mobile telephone operators. There are more than 14 mobile phones in Paraguay for every fixed line in service. This is the greatest difference between fixed and mobile in Latin America.
In mid-2010, Copaco entered the mobile market by acquiring Vox, Paraguay’s smallest cellular operator. Copaco was one of the very few incumbent operators in Latin America with no subsidiary, affiliate, or sister company in the mobile sector.
Another major change on the horizon is the prospective involvement of Vietnam’s Viettel, a telco with a highly successful history, in Paraguay’s telecom market. In March 2011, Viettel announced its intention to invest US$100 million in Paraguay’s telecom infrastructure through a commercial agreement with Copaco.
Fixed broadband technologies in Paraguay include ADSL, cable modem, FttH, and WiMAX. Speed plans higher than 1Mb/s are prohibitively expensive. Broadband penetration is among the lowest in the region, though the market is growing rapidly, primarily in Asunción and other major urban centres. WiMAX, previously the predominant broadband technology, has been overtaken by ADSL. But Copaco has a near-monopoly on ADSL services, and there are long waiting periods for new connections. Due to the country’s low teledensity, ADSL is unavailable in much of the country.
Copaco’s main competitors in the fixed broadband market are Millicom’s Tigo with a combination of WiMAX and FttH, and pay TV provider CableVisión with cable modem.
According to the Household Download Index by Ookla, Paraguay has a mean download speed of 1.54Mb/s, which places it 139th out of 170 countries in the world. In Latin America, Paraguay is fifth from the bottom. By comparison, the regional leader, Chile, has a mean download speed of 6.52Mb/s. The world average is 9.15Mb/s.
Paraguay’s mobile market is the country’s most successful telecom sector, served by four operators: Millicom’s Tigo (the market leader), Telecom Argentina’s Personal, América Móvil’s Claro, and Copaco’s Vox.
Mobile broadband is available through Tigo, Personal, and Claro using USB modems. The shortcomings of the fixed broadband market have helped boost mobile broadband uptake. Strong growth is expected in this market, which is becoming the fastest growing telecom sector in Paraguay.
Market highlights:
- Mobile number portability is to be implemented in Paraguay by end-2011, following a resolution approved by the regulator in October 2010.
- Copaco plans to invest US$20 million on the launch of a triple-play solution by end-2011. The service would comprise telephony, broadband, and IPTV. But before it can provide viable IPTV, Copaco needs to increase the speeds and drop the prices of its ADSL plans.
- Tigo plans to launch digital cable TV in the second half of 2011.
- Both Tigo and CableVisión are keen to offer triple play, but before companies can provide fixed telephony or VoIP, regulatory changes are needed to remove Copaco’s monopoly in these markets.
- In June 2010, Paraguay adopted the Brazilian version of Japan’s ISDB-T standard for digital terrestrial television. The government announced that ISDB-Tb broadcasting would begin in May, and that the analogue system would be disconnected by 2016.
- Copaco has contracted Huawei to deploy a 3G network for its mobile subsidiary Vox. Commercial launch is expected to take place in September 2011.
Paraguay – key telecom parameters – 2010 - 2011
Category
| 2010
| 2011 (e)
|
|---|
Fixed-line service
|
|---|
Total number of subscribers 1
| 410,000
| 430,000
|
Annual growth 1
| 5%
| 5%
|
Teledensity 1
| 6.40%
| 6.60%
|
Broadband
|
|---|
Total number of subscribers 1
| 170,000
| 200,000
|
Annual growth 1
| 21%
| 18%
|
Penetration rate 1
| 2.60%
| 3.00%
|
Mobile telephony subscribers
|
|---|
Total number of subscribers (million)
| 6.01
| 6.41
|
Annual growth
| 8%
| 7%
|
Mobile penetration rate
| 93.20%
| 97.70%
|
(Source: BuddeComm)
Note: 1 Estimates for both 2010 and 2011.
Paraguay is a promising telecom market for prospective investors, with considerable long-term growth potential especially in the fixed and mobile broadband sectors. The report covers trends and developments in the fixed-line, mobile, 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, WiMAX, and FttH);
- Broadcasting (including cable TV and digital terrestrial TV);
- Mobile market (including 3G and mobile broadband);
- Convergence and triple play solutions;
- Internet, VoIP, IPTV;
- Scenario forecasts for the fixed-line, mobile, and broadband markets for the years 2015 and 2020.
