2008 Latin America - Telecoms, Mobile and Broadband Overview

• BuddeComm’s Latin America Annual Publication, 2008 Telecoms, Mobile and Broadband in Latin America Overview, profiles the countries of South and Central America, Mexico, and the Caribbean. The Latin American region is making giant strides forward in the telecoms market, particularly mobile telephony. There exists however a wide digital gap among the various nations, and indeed within each nation, due to the inequalities between rich and poor, and between urban and rural areas.

This report presents a concise overview of sector liberalisation and privatisation in Latin America, government initiatives and regulations in the telecom industry, the development of product offerings for both mobile and broadband technologies, essential country statistics in all telecom sectors, and the emergence of new technologies such as VoIP, WiMAX, convergence, and triple play.

Key highlights

• Latin America’s GDP grew by 5.0% in 2007, and is expected to grow by 4.3% in 2008.
• Despite a low 18% average teledensity, fixed-line growth in Latin America continues to stagnate.
• Broadband grew at an annual rate of around 40% in 2007, but broadband penetration at year-end was only 3.4%, considerably less than the global average of 5.9%.
• ADSL is the broadband leader, with a stable 71% market share virtually unchanged since 2005. Cable modem accounts for 26% of the market, and wireless broadband for the remaining 3%.
• WiMAX deployments continued in 2007 throughout Latin America, but frequency licensing in Brazil and Mexico was further delayed. Both countries are expected to hold WiMAX auctions in 2008.
• Latin America saw its first IPTV services in 2007. Telefónica Chile lunched IPTV in June 2007, Chile’s Telsur in July 2007, and Brasil Telecom in September 2007. Other companies with plans to launch IPTV include Oi and Telesp in Brazil, UNE-EPM in Colombia, and CANTV in Venezuela.
• Disagreements continue over the choice of digital terrestrial TV standards. Any chance of reaching a common standard has evaporated, since Mexico and Honduras have adopted the USA’s ATSC, Brazil has chosen the Japanese ISDB, and Uruguay has opted for Europe’s DVB standard.
• In early 2008, Latin America had 375 million mobile phones compared with 101 million fixed-line phones. Paraguay led the trend, with more than twelve mobile phones for every fixed line in service.
• Mobile penetration in Latin America and the Caribbean was over 66% in early 2008, well above the world average, which was around 46%. The region’s share of the global mobile pie is around 12%, while it holds about 8.6% of the world’s population.
• 3G mobile services first reached Latin America in late 2006, launched by Cingular in Puerto Rico in November and by Entel PCS in Chile in December. Argentina and Uruguay came next, in mid-2007. By end-2007, all mobile operators in Chile, Argentina, and Uruguay were offering 3G services. Brazil saw its first 3G services in November 2007 and Mexico in February 2008.
• América Móvil and Telefónica Móviles (jointly with Portugal Telecom in Brazil) serve around 65% of the region’s mobile subscribers.
• In February 2007, the Venezuelan government moved to renationalise the country’s incumbent telco CANTV. It gained control of the operator in May 2007 with an 86.2% stake, which comprised 6.6% that it already owned; 28.5% that it purchased from Verizon; and 51.1% that it purchased through concurrent share offers on the New York and Caracas stock exchanges.
• The Bolivian government announced in April 2007 that the country’s fixed-line incumbent and mobile market leader Entel would be renationalised. Entel’s stakeholders were Telecom Italia (50%), the Bolivian government (47%), and Entel workers (3%). Negotiations between the Bolivian government and Telecom Italia however turned sour, and in early 2008, no conciliation was yet in sight.

Top 10 Latin American mobile markets – subscribers, annual change & penetration – 2007

(Source: BuddeComm based on Global Mobile)

For those needing high-level strategic information and objective analysis on this region, this report is essential reading and gives further information on:

• Regulatory developments;
• Fixed-line developments, including the adoption of alternative technologies such as VoIP;
• Mobile telephony growth, launch of 3G services, and the up-take of mobile data services;
• Broadband growth and the incursion into wireless technologies such as WiMAX;
• The pay TV market, and developments in IPTV and digital terrestrial TV;
• Convergence and triple play developments.

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