2008 Latin American Convergence, Broadband and Internet Market

This Latin American market report covers the broadband and Internet markets, as well as convergence, pay TV, and digital media, for each of the following economies: Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, the Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Suriname, Uruguay, Venezuela, and the smaller Caribbean countries. The region’s major markets include:

Argentina

Argentina’s Internet market is the third largest in Latin America, and penetration is among the highest in the region. Argentina has one of the most developed broadband markets in South America. Broadband penetration is considerably higher than the regional average, and only second to Chile’s. Since 2004, the number of broadband subscribers has been soaring. ADSL has consolidated its leadership, overtaking cable modem, which used to be the main broadband technology. The broadband market is divided between three players (Telefónica de Argentina, Telecom Argentina, and Grupo Clarín), which compete neck-a-neck for market share. WiMAX networks have been deployed by Ertach and Alvarion. For the country overview, see chapter 2, page 19.

Brazil

Brazil is the regional broadband leader in terms of subscriber numbers, but trails neighbouring Chile and Argentina in terms of penetration. Broadband technologies available in Brazil include ADSL, cable modem, wireless, satellite, and dedicated lines. ADSL is losing market share to cable modem, but remains the leader with 75% of all broadband accesses. WiMAX networks have been deployed by the government and by several operators, and a WiMAX auction is expected in 2008. Brazil is considered by many a world leader in terms of e-government, especially in the areas of e-participation, electronic voting, online tax filing, and e-procurement. For the country overview, see chapter 5, page 43.

Chile

Chile is the regional leader in terms of PCs, Internet users, and broadband penetration rates. The country’s flourishing broadband market is expected to continue growing strongly in the coming years. Broadband access is available over ADSL, cable modem, wireless, BPL, and FttH. Chile is also the regional leader in terms of convergence, with VTR – Latin America’s first triple player – and several other companies all offering triple play packages. WiMAX networks have been launched by Entel and Telmex, and VTR is in the process of deployment. In mid-2007, Telefónica Chile and Telesur became the first operators to launch IPTV services in Latin America. For the country overview, see chapter 7, page 72.

Colombia

Colombia’s broadband penetration is slightly lower than the regional average, but is expanding at an impressive rate. Colombia is one of the first countries in the world where WiMAX has been deployed commercially, achieving a 5% share of the broadband market. Several operators offer triple play solutions, combining telephony, broadband, and television. The pay TV market has experienced a wave of consolidation, with the acquisition of five cable TV firms by Mexico’s Telmex, and of two cable TV firms by UNE-EPM. As a result, Telmex controls more than half, and UNE-EPM almost one fourth of the cable TV market. For the country overview, see chapter 8, page 90.

Mexico

Broadband is one of the highest growth sectors in Mexico’s telecommunications market, the revenue of which is growing at around four times the pace of the rest of the economy. For instance, Telmex’s ADSL product, Prodigy Infinitum, continued to post very strong growth rates during 2007. The main cable TV providers, Megacable, Cablemás and Cablevisión are also experiencing high growth in cable modem subscribers. Triple play packages are being offered both in the form of alliances between telephony and cable companies, as well as, due to recent regulatory reforms, in the form of single service provider triple play packages, in particular the addition of cable VoIP. Nevertheless, there is significant scope for additional growth as Mexico’s broadband penetration is merely one-quarter of the OECD average. For the country overview, see chapter 19, page 143.

Peru

Internet user penetration in Peru is considerably higher than average for Latin America, a remarkable achievement compared with the country’s other economic indicators. Indeed, with its low teledensity, Peru has an exceptionally high Internet-access-to-fixed-line ratio. The success of the Internet in Peru is primarily due to the mushrooming of cheap public Internet facilities known as cabinas públicas. In fact, Peru is a world leader in terms of users who access the Internet in public places. The Peruvian government is aiming to increase broadband penetration from 2% to more than 3% by 2011. For the country overview, see chapter 23, page 173.

Venezuela

Internet penetration in Venezuela is lower than the South American average, leaving considerable room for growth, especially in consideration of the country’s relatively high GDP per capita. Telecentres, of which there are more than 3,000, are helping to bridge the digital divide. Broadband growth has been topping 50% a year, while dial-up is receding. Latin America’s first mobile WiMAX service was launched in Caracas in October 2007. Fixed-line incumbent CANTV dominates the broadband market with its ADSL service. Triple player Inter is the number two broadband provider and cable TV market leader. Meanwhile, the government studies which digital terrestrial TV standard to adopt. For the country overview, see chapter 27, page 200.

For those needing high-level strategic information and objective analysis on the Internet and broadband markets in Latin America, this report is essential reading and gives further information on:

• Government policies and regulations affecting the Internet, broadband, and convergence solutions;
• WiMAX deployments;
• Triple play developments and challenges;
• Recent and planned technological advances, including Broadband Powerline (BPL), digital terrestrial TV, and IPTV.

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