El Salvador has a small economy and population, while growth in its telecom sector has been restricted by poor infrastructure and unequal income distribution. There have been organisational delays which have retarded the development of DTTV and LTE services, though into 2017 much progress in these areas has been evident. Indeed the telecom sector has been one of the more successful within the overall economy.
El Salvador’s fixed-line teledensity is substantially lower than the Latin American and Caribbean average. However, there has been a significant drop in the number of fixed lines since 2010, largely due to the substitution for mobile-only alternatives.
Mobile penetration is remarkably high considering El Salvador’s economic indicators, being about a third higher than average for Latin America and the Caribbean. Of the estimated total number of telephones in the country, 10% are fixed and 90% are mobile. The country was one of the last in the region to provide LTE services. This was mainly due to the inadequate provision of suitable spectrum. A multi-spectrum auction is expected later in 2017 which will allow the mobile network operators to improve the reach and quality of their LTE offerings. Movistar by mid-2017 offered LTE to all provincial capitals, while Tigo is investing up to $1 billion in network infrastructure to extend LTE to 80% of the population by 2020. The switch from analogue to digital broadcasting, though delayed, will also release valuable spectrum in the 700MHz band for mobile broadband use.
El Salvador’s telecom legislation is one of the more liberal in Latin America, encouraging competition in most aspects of the telecoms sector and permitting foreign investment in all areas. However, there are no regulations as yet which promote wholesale broadband, and thus in the DSL market Claro retains a virtual monopoly. The only effective cross-platform competition in the broadband market comes from the few cable operators. There has been some market consolidation in recent years, and in mid-2017 the regulator stepped in to enforce provisions related to the proposed acquisition by Telemóvil of the regional cable TV provider Caribena Cable.
Through this process of consolidation a few dominant multinational operators have emerged (notably Millicom’s Tigo, América Móvil’s Claro, and Telefónica’s Movistar), which have managed to expand into almost all sectors through a process of convergence.
The mobile market is served by five operators: Tigo, Movistar, Claro, Digicel, and Intelfon. The outlook is especially promising for mobile broadband, where competition between Claro, Tigo, and Telefónica will oblige the operators to diversify services and reduce prices.
Market penetration rates in El Salvador’s telecoms sector – 2016
|Penetration of telecoms services:||Penetration|
|Mobile SIM (population)||140.7%|
América Móvil (Claro), Millicent International (Tigo), Telefónica (Movistar), Red, GCA Telecom, Salnet, Amnet, Sky TV.
Companies (Major Players)
Mobile & Wireless Broadband and Media
Mobile Communications (voice and infrastructure)
Regulations & Government Policies
Strategies & Analyses (Industry & Markets)
Number of pages 40
Last updated 19 Jul 2017
Analyst: Henry Lancaster
As you know, I have resigned from the Labor Ministry and have decided not to re-contest the seat of Charlton at the next election – both for personal reasons.
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