2014 Venezuela - Telecoms, IP Networks, Digital Media and Forecasts

Regulator raises Bs.F.4.6 billion in multi-spectrum auction: mobile broadband expansion anticipated in 2015

With a slower economic growth, high inflation and falling prices for the country’s key export commodity, the general outlook for 2015 is not promising. Nevertheless, the country’s telecom market is expected to grow steadily, led by 3G and LTE services as well as by satellite-based pay TV services and the nascent IPTV sector.

Growth in the number of fixed lines has fallen sharply in recent years, to only 0.4% in the first half of 2014, and fixed-line revenue now account for a shrinking portion of total telecom revenue. In line with consumer trends in the use of services, the share of mobile, internet, and pay TV revenues has been rising. A number of private operators compete in all telecom sectors, but the country’s state-owned telecom incumbent CANTV dominates the fixed, mobile, and broadband markets.

Along with the main competitors Movistar and Digitel, all operators have ambitious investment plans, largely aimed at improving their networks and expanding the reach and capabilities of new technologies including FttP and LTE

Mobile penetration in Venezuela is below the South American average. The mobile market is recovering from the downturn suffered during Venezuela’s economic recent recession, but estimated growth is low compared with previous years.

Despite the slump in subscriber growth, the volume of data traffic has been increasing exponentially. Spurred by the huge popularity of social networks in Venezuela, the country has experienced a surge in the demand for smartphones, and with it the need for more capable networks and higher data allowances.

Three major players operate in the Venezuelan mobile market: Movilnet, the market leader and mobile subsidiary of state-owned CANTV; Movistar, the Venezuelan unit of Spain’s Telefónica; and Digitel, a locally owned private company.

Fixed broadband penetration and speeds are also lower than the regional average. CANTV is the country’s exclusive ADSL provider, while a few cable TV companies also offer cable broadband services. The Venezuelan government has launched a National Fibre-Optic Backbone project to guarantee a uniform distribution of high-speed internet access nationally, with CANTV in charge of implementing the project. The government intends to lease capacity on the National Fibre-Optic Backbone to cooperatives and small companies.

Pay TV is the fastest growing telecom sector in Venezuela after mobile broadband, and accounts for 15% of all telecom revenue in the country. The market leaders are DirecTV, Inter, SuperCable, NetUno, Movistar, and CANTV.

Key developments:

CANTV extends fibre-optic backbone infrastructure, reports doubling of profits in 2013; regulator raises Bs. F.4.6 billion in multi-spectrum auction; MNOs begin project to build 30 shared-access base stations to serve remote areas; Digitel reports having 100,000 active customers on its LTE network; Movistar switches off its CDMA mobile and fixed-wireless voice and data network; mobile operators invest in congested networks to develop mobile broadband capabilities; CANTV deploys 8,760 antennae for regional schools and health centres; Vivo Play launches in Venezuela; AT&T to acquire DirecTV’s US and Latin American operations; DTT reaches 60% population coverage; National Fibre-Optic Backbone project deployment is 70% complete; pay TV market suffering from rampant signal theft; satellite TV market competition; regulator’s market data to Q2 2014, operators’ data to Q3 2014, recent market developments.

Companies and subsidiaries mentioned in this report include:

CANTV, Movistar, Digitel, Inter, NetUno, Alodiga, Multiphone, Totalcom, Convergía, Movilnet, MovilMax, Tesacom, SuperCable, DirecTV. 

Data in this report is the latest available at the time of preparation and may not be for the current year