El Salvador - Telecoms, Mobile and Broadband - Statistics and Analyses

Telefónica El Salvador sold to América Móvil

Although El Salvador is the smallest country in central America geographically, it has the fourth largest economy in the region. Economic potential is limited by the relatively small population, while the country’s telecom sector has been restricted by poor infrastructure and unequal income distribution. There have been organisational delays which have retarded the development of telecom services, though during the last two years much progress has been evident, and 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. There has been a significant drop in the number of fixed lines since 2010, particularly in 2017, largely due to the substitution for mobile-only alternatives. About 94% of all telephony lines in the country are on mobile networks.

Mobile penetration is remarkably high considering El Salvador’s economic indicators, being about a third higher than average for Latin America and the Caribbean. The country was one of the last in the region to provide LTE services, mainly due to the inadequate provision of suitable spectrum. A long-delayed multi-spectrum auction, for which the regulator again launched a public consultation in March 2029, will allow the mobile network operators to improve the reach and quality of their service offerings.

El Salvador’s telecom legislation is one of the more liberal in Latin America, encouraging competition in most areas and permitting foreign investment. However, there are no regulations which promote wholesale broadband, and thus in the DSL market leader 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, including Telemóvil;s acquisition of the regional cable TV provider Caribena Cable. In May 2019 the competition authority began assessing the sale of Telefónica El Salvador to América Móvil, which operates in the country under the Claro brand. Through this process of consolidation a few dominant multinational operators have managed to expand into almost all sectors through a process of convergence.

Key developments:

• Regulator starts consultation of delayed AWS band auction;
• Tigo sells tower portfolio on lease-back arrangement;
• Telefónica Group sells its local unit to América Móvil;
• Government increases tax on some telecom services to 18%;
• Central Reserve Bank finalises regulatory framework for mobile financial services; enabling a range of m-payment services via subsidiary companies set up by MNOs;
• Mobile network operators provide near national mobile broadband coverage;
• Report update includes the regulator’s market data updates to December 2017, telcos’ financial and operating data to Q1 2019, Telecom Maturity Index charts and analyses, recent market developments.

Companies mentioned in this report:

América Móvil (Claro), Millicent International (Tigo), Telefónica (Movistar), Red, GCA Telecom, Salnet, Amnet, Sky TV.

Table of Contents

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