Nicaragua’s MNOs progress in LTE reach

Nicaragua is the largest and least densely populated country in Central America. The country’s steady GDP growth since 2010 belies the low economic base, given that it has the lowest GDP per capita in the region, with some 60% of the population living below the poverty line. As a result, much of the economic drive has been the result of international assistance, particularly from the World Bank and other agencies.

The new canal being built between the Pacific and Caribbean with Chinese funding incorporates deep-water ports, an oil pipeline, railroad and international airport. It has been an ambitious attempt to deliver greater economic benefits to the country, and the project is indicative of China’s economic encroachment in the region.

Nicaragua’s telecoms market has mirrored the poor economic achievements, with fixed-line teledensity and mobile penetration also the lowest in Central America. The broadband market remains nascent, with population penetration below 4%. Most internet users are concentrated in the largest cities, given that rural and marginal areas lack access to the most basic telecom infrastructure. Internet cafés provide public access to internet and email services, but these also tend to be restricted to the larger population centres. To address poor infrastructure, the World Bank has funded a project aimed at improving connectivity via a national fibre broadband network. There are separate schemes to improve broadband in eastern regions and provide links to Caribbean submarine cables.

América Móvil’s Claro has a clear lead in all of Nicaragua’s telecom sectors, including fixed-line, mobile, broadband, and pay TV. The number of mobile subscribers overtook the number of fixed lines in early 2002, and the mobile sector now accounts for most lines in service.

Telefónica’s Movistar is the only company competing with Claro in the fixed-line and mobile market. In the mobile sector, Movistar holds almost one third of the market, but in the fixed-line sector, it has only about 10% market share.

Due to a weak regulatory structure and bureaucratic delays, further liberalisation has been a slow process. The market duopoly has dampened the competitive drive between the two main players, and as a result there has been less effort than in neighbouring countries to improve quality and lower prices. Nevertheless, there are other companies operating in the market, including the Russian state corporation Rostejnologuii, Yota Mobile and IWB Holding. In the mobile market Xinwei Nicaragua (Xinwei Intelcom) launched services in early 2016, operating under the CooTel banner.

BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key developments:

• Movistar Nicaragua extends LTE services to more than 60 towns and cities;
• Telecom regulator works on updating the General Law of Telecommunications;
• Great Wall delays Nicasat-1 (LSTSAT 1) satellite launch;
• Xinwei Nicaragua launches mobile services under the CooTel brand;
• Work starts on a 3,500km fibre-optic broadband network;
• World bank funding the Caribbean Regional Communications Infrastructure Program (CARCIP) to improve broadband in Nicaragua's eastern regions;
• Claro retaining near-monopoly over broadband;
• Telefónica planning to deploy a 3,158 mile fibre cable covering Central America, linking Mexico to Panama via Guatemala, El Salvador, Nicaragua and Costa Rica;
• Report update includes the regulator's market data, ITU data for 2017, recent market developments.
• Assessment of the global impact of COVID-19 on the telecoms sector.

Companies mentioned in this report:

América Móvil, Movistar, Yota Nicaragua.