2009 Latin American Telecoms, Mobile and Broadband Overview

BuddeComm’s annual publication, Latin American Telecoms, Mobile and Broadband Overview, profiles the regions of Latin America and the Caribbean. Countries within this region include: Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Suriname, Uruguay, Venezuela, and other small Caribbean countries.

Telecoms services have become an increasingly essential item not only for businesses but also for residential consumers in the Latin American and Caribbean (LAC) region. Therefore, demand should not collapse in 2009 despite the recession. Telecom revenues should continue to grow in most countries, driven by mobile telephony and broadband, but growth rates will be quite small compared with previous years.

The LAC region has been a high growth market particularly in mobile telephony, where penetration is well above the world average. A few countries, however, may be nearing mobile market saturation; about 15 nations in the Caribbean and three in South America have passed the 100% penetration threshold, including Jamaica, Argentina, Uruguay, and Venezuela.

The broadband market has enormous growth potential, but has been held back by the high prices charged by providers, which in some countries have a virtual monopoly in their areas of operation. Other inhibiting factors include low PC penetration, insufficient fixed-line infrastructure, unequal income distribution, a lack of economies of scale, and regulatory hurdles. On the positive side, competition has been increasing and prices have been dropping in most countries. Indeed, Latin America was the world’s fastest-growing broadband market in the fourth quarter of 2008.

The global financial crisis has had a negative effect on WiMAX uptake, and the credit crunch has curtailed WiMAX investments. Another factor that worked against WiMAX in 2008 was the rollout of 3G mobile broadband, which grew dramatically over the year in both coverage and customers. Indeed, delays in WiMAX deployments have allowed the 3G market to gain a head start in Latin America.

Key highlights:

·         The LAC economy grew by 4.6% in 2008. A negative GDP growth of -0.3% is forecast for 2009.

·         Teledensity in the LAC region inched up from 17.9% in 2007 to 18.3% in 2008. The fixed-line market is stagnant in most countries.

·         Broadband grew at an annual rate of 39% in 2008. Broadband penetration at year-end was 4.9%, well behind the global average of 6.1%.

·         ADSL is the broadband leader, with a stable 70% market share virtually unchanged since 2004. Cable modem accounts for 27% of the market, and wireless broadband for the remaining 3%.

·         WiMAX deployments continued in 2008, but subscriber numbers are small and frequency licensing has suffered serious setbacks in Brazil and Mexico. A few countries, notably Argentina, Brazil, Mexico, and Peru, are planning WiMAX auctions in 2009.

·         VoIP is popular and highly competitive throughout the region. Triple play is available in most LAC nations, and IPTV is starting in a number of countries. In a few markets, however, regulatory battles still rage over who can offer triple play, and whether telcos should be allowed to offer pay TV services.

·         In early 2009, there were 458 million mobile phones in the LAC region, compared with 106 million fixed-line phones. Mobile penetration was approximately 80%, well above the world average of 58%.

·         During 2008, LAC saw a huge expansion in 3G WCDMA coverage and subscriber numbers. In early 2009, there were 39 UMTS networks operating in 18 LAC countries, and 3G subscribers totalled 4.83 million, up from a mere 64,700 one year earlier.

·         Mobile ARPU in Latin America has stabilised at an estimated US$16, although it has fallen under US$11 in some of the major markets. Venezuela is the region’s best performer with US$26 ARPU.

·         América Móvil and Telefónica Móviles (jointly with Portugal Telecom in Brazil) serve about 64% of the region’s mobile subscribers. América Móvil is the leader, with a 37% market share.

Top 10 Latin American countries for mobile subscribers – 2007 - 2008

(Source: BuddeComm based on Global Mobile)

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

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

·         Telecom market trends.

·         Regulatory developments with a particular look at countries that are liberalising their telecom markets.

·         Fixed-line infrastructure and adoption of alternative technologies such as VoIP.

·         Major fixed-line operator profiles, including company developments such as the merger of Oi and Brazil Telecom, and the cross-shareholding scrutiny of Telecom Argentina.

·         Mobile market outlook and developments, including major operators, ARPU, and mobile data services.

·         The roll-out and uptake of 3G UMTS services in Latin America.

·         Broadband market status, including ADSL, cable modem, WiMAX, and Broadband Powerline (BPL).

·         Convergence, triple play models, IPTV plans, and the regulatory issues involved.