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Panama’s economic prospects remain promising, with GDP growth during the last few years being steady at between 5% and 6% annually. This growth has had a positive effect on the country’s telecom market, which has also grown steadily and attracted considerable investment from significant international operators including Telefónica, America Móvil and Liberty Global. Liberty Global in 2016 acquired Cable & Wireless Communications, which owns the incumbent telco Cable & Wireless Panama. The deal has enabled Liberty Global to combine CWP’s businesses in Panama and the Caribbean with its own operations in Chile and Puerto Rico. The merged operator provides improved bundled service offerings and has stimulated competition with the other regional players Digicel and Claro. In December 2017 Liberty Global created Liberty Latin America (LLA) to manage the company’s Latin American and Caribbean businesses. LLA has since expanded through acquisitions, including the purchase of an 80% stake in Cabletica (Costa Rica) in February 2018.
Other significant changes to the market include Millicom International having acquired the main cable TV provider Cable Onda for $1 billion at the end of 2018, and its acquisition in February 2019 of Telefónica’s businesses in Panama, Costa Rica and Nicaragua for $1.7 billion.
Telecom revenue climbed steadily for several years before falling back in 2016 and 2017. Mobile services and broadband remain the key sectors, a trend likely to continue in 2019 in the wake of operator investments in network upgrades.
Panama’s fixed-line teledensity is well below average for the region, and the number of lines continues to fall as customers adopt mobile-only solutions for making calls and for internet access.
Competition remains limited in the broadband sector, where the incumbent CWP has resisted unbundling its local network and as a result has secured a virtual monopoly in the delivery of DSL access. The only cross-platform competition is from cable modem and WiMAX services.
The mobile sector has flourished in recent years. The popularity of customers having multiple SIM cards pushed mobile penetration rates above 174% in 2014 this this has fallen back in response to measures aimed at removing dormant SIM cards and unregistered users. The arrival of Digicel Panamá in 2008 and América Móvil in 2009 ended the duopoly long enjoyed by Cable & Wireless Panamá and Telefónica’s Movistar and resulted in additional competition and steep price reductions. Legislation adopted in early 2018 allowed for market consolidation and the reduction of the market to three players, aimed at making more efficient use of available spectrum. Although the number of players remains the same, Tigo Panama has expanded into the fixed and mobile segment by acquiring Movistar.
Internet penetration has grown in recent years and is expected to do so steadily further into 2019 because of consumer demand for services as well as the stimulus of the government’s Internet for All project. In 2010, Panama became one of the first countries in the world to offer free wireless broadband access nationwide. The National Internet Network project does not compete with private broadband providers, because its aim is digital inclusion and not the provision of broadband access.
Cable and Wireless Panama, Cable Onda, Claro, Optynex Telecom, Digicel, Movistar
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Number of pages 96
Status Current
Last updated 22 May 2019
Update History
Analyst: Henry Lancaster
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