Executive Summary

The Latin American and Caribbean economy grew by 5.5% in 2004, outstripping the most optimistic forecasts, while the region’s per capita GDP is estimated to have risen by about 4%. All Latin American countries except Haiti recorded positive growth rates.
In terms of regional economic growth, the year 2004 was the best since 1997. For the second time in 20 years (the first time was in 1997), all of the region’s six largest economies, Argentina, Brazil, Chile, Colombia, Mexico and Venezuela, posted growth of over 3%.
Although economic growth in 2005 is expected to ease compared with 2004, the prospects are still highly promising, and GDP growth is projected at about 4%.
Latin America’s telecom market witnessed a strong drive towards consolidation during 2004-2005. The two largest deals involved AT&T Latin America’s sale of its assets to Telmex, and BellSouth’s sale of all its Latin American mobile operations to Spain’s Telefónica. Telmex also acquired Embratel from MCI, and América Móvil acquired Enitel in Nicaragua and Megatel in Honduras. Telecom Italia, on the other hand, agreed to sell Entel Chile and Digitel in Venezuela.
Despite a low 17% teledensity, fixed-line growth continued to stagnate in 2004, primarily owing to a general shift from fixed-line to mobile phones. Telecom infrastructure varies greatly from country to country, and from urban to rural areas.
There is a marked trend towards the use of alternative systems in fixed-line telephony, especially Wireless Local Loop (WLL) and Voice over Internet Protocol (VoIP).
Broadband grew at an annual rate of around 87% in 2004, making Latin America the world’s fastest growing region in terms of broadband uptake. However, it still accounts for only 2.76% of the world’s broadband pie.
Asymmetrical Digital Subscriber Line (ADSL) is the rising star for fixed-line operators. While Latin America’s ADSL lines grew by 104% in 2004, cable modems and other broadband technologies grew at the more modest rate of 37%.
The Latin American broadband leaders are Brazil, Chile, Argentina and Mexico, and in early 2005 these four countries accounted for 87% of all broadband subscribers in the region.
While fixed lines stagnate, the mobile market continues to grow. In early 2005, there were around 176 million mobile phones in Latin America compared with approximately 92 million fixed-line phones. Paraguay leads the trend, with four times more mobile than fixed-line subscribers.
Regional mobile penetration stood at around 32% in early 2005; however it varies greatly from country to country, with Chile, Jamaica and Puerto Rico recording the highest rates at around 61%, 59% and 48% respectively, while Haiti and Honduras languish at 2% and 8% respectively.
In early 2005, three multinational operators served about 76% of Latin America’s mobile market: América Móvil, Telefónica and Telecom Italia.
GSM is the fastest growing technology in Latin America. By end-2004, every country in Latin America and the Caribbean (except Haiti) enjoyed GSM-based mobile services. Guyana was the last country to adopt GSM, in November 2004.
In terms of GSM subscriber numbers, Latin America was the fastest growing region in the world in 2004, soaring by 151% in one year.
By February 2005, GPRS/EDGE technology had made its appearance in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela.
Chile’s Smartcom was the first to launch 1xEVDO services, in September 2004, on its CDMA2000 1xRTT network. In October 2004, Vivo launched commercial 1xEV-DO services in Rio de Janeiro and São Paulo.
While Time Division Multiple Access (TDMA) still dominated the Latin American mobile landscape in December 2004, it is quickly losing ground to GSM and CDMA. In Brazil, GSM subscribers overtook TDMA in January 2005, and this pattern is forecast for the region as a whole before the end of 2005.
GSM overtook CDMA in mid-2004. While TDMA experienced a slight decrease (-0.8%) in subscriber numbers in 2004, CDMA continued to increase (+32%), albeit at a much more modest pace than GSM.
The WiFi buzz hit Latin America in 2004. Although a few companies had already launched WiFi services in 2003, it was during 2004 that this technology took hold, spreading like wildfire throughout the region. Countries that had joined the global WiFi bandwagon by early 2005 include: Argentina, Bolivia, Brazil, Chile, Colombia, Dominican Republic, El Salvador, Mexico, Peru, Puerto Rico and Uruguay.
The first WiMAX network in Latin America was launched in December 2004, by Millicom Argentina.
Mexico saw its first Triple Play services, combining voice, broadband and pay TV. In February 2005, Alestra and Multivisión (MVS) launched VoIP telephony combined with pay TV and broadband services over Multichannel Multipoint Distribution Systems (MMDS). In March 2005, fixed-line provider Maxcom and local cable operator SIT launched basic telephony services combined with broadband and cable TV.
In October 2004, TVA and TV Cidade were the first Brazilian operators to launch Triple Play services, combining VoIP telephony with pay TV and broadband.
Latin American pay TV emerged from the severe beating it took during the recession years. In 2004, pay TV’s ratings and shares in key Latin American countries showed a dramatic growth, according to a study by Lamac. In some countries the performance was exceptional: in Argentina, for example, advertising sales grew 50%, in Venezuela 44% and in Brazil 23%. Most of this growth happened during the second half of the year.
Satellite TV operator DirecTV Latin America emerged from Chapter 11 in February 2004.
DirecTV Latin America and Sky Latin America announced, in October 2004, the consolidation of their two Direct-To-Home (DTH) Satellite TV platforms into a single platform in each of the countries served. In Mexico and Brazil, DirecTV Brasil customers would migrate to the Sky platform, while in Colombia and Chile Sky customers would migrate to the DirecTV platform.

1. OVERVIEW AND ANALYSIS 2005
1.1 Key highlights – 2004 – 2005
1.1.1 Telecom market overview
1.1.2 Regulatory environment
1.1.3 Infrastructure
1.1.4 Major telecom players
1.1.5 Data market
1.1.6 Internet
1.1.7 Broadband
1.1.8 Mobile communications
1.1.9 Broadcasting
2. TELECOMMUNICATIONS MARKET
2.1 Overview
2.2 Telecommunications growth
3. REGULATORY ENVIRONMENT
3.1 Background
3.2 Foreign operators
3.3 Regulatory reforms
3.4 Types of licensing
3.5 Privatisation and liberalisation
3.6 Settlement rates with the USA
4. FIXED NETWORK OPERATORS
4.1 Overview
4.2 Major Latin American fixed network operators
4.2.1 Telmex
4.2.2 Tele Norte Leste (Telemar)
4.2.3 Brasil Telecom
4.2.4 Telesp
4.2.5 Embratel
4.3 Major international operators
4.3.1 Telefónica
4.3.2 Telecom Italia
4.3.3 Verizon
5. TELECOMMUNICATIONS INFRASTRUCTURE
5.1 Overview
5.2 International
5.2.1 Submarine cable systems
5.2.2 International satellite systems
5.3 Infrastructure developments
5.3.1 Wireless Local Loop (WLL)
5.3.2 VoIP
6. DATA MARKET
6.1 Overview of the data market in Latin America
6.2 Regulatory issues
6.3 Integrated Services Digital Network (ISDN)
6.4 Very Small Aperture Terminal (VSAT) networks
7. INTERNET MARKET
7.1 Overview of the Internet in Latin America
7.1.1 Internet statistics
7.1.2 Statistical analysis
7.2 Internet access locations
7.3 Latin America’s ISP market
8. BROADBAND MARKET
8.1 Overview
8.1.1 Broadband statistics
8.2 Cable modems
8.3 Asynchronous Digital Subscriber Line (ADSL)
8.4 Wireless broadband
8.5 WiFi and WiMAX
9. CONVERGENCE
9.1 E-commerce
9.2 E-government
10. MOBILE COMMUNICATIONS
10.1 Overview of Latin America’s mobile market
10.1.1 Mobile statistics
10.2 Mobile technologies
10.2.1 GSM
10.2.2 CDMA
10.2.3 TDMA
10.2.4 Third generation mobile
10.3 Major mobile operators in Latin America
10.3.1 América Móvil
10.3.2 Telefónica SA
10.3.3 Telecom Italia
10.3.4 Millicom International Cellular (MIC)
10.4 Mobile voice services in Latin America
10.4.1 Prepaid cards
10.4.2 Satellite mobile
10.5 Mobile data services
10.5.1 SMS
10.5.2 Wireless Application Protocol (WAP)
11. BROADCASTING MARKET
11.1 Overview
11.2 TV Programming in Latin America
11.3 Digital terrestrial TV
11.4 Interactive TV (iTV)
11.5 Pay TV
11.6 Cable TV
11.7 Multichannel Multipoint Distribution Service (MMDS)
11.8 Triple Play
11.9 Direct-To-Home (DTH) Satellite TV
11.9.1 Sky Latin America
11.9.2 DirecTV Latin America
12. GLOSSARY OF ABBREVIATIONS


Exhibit 1 – Regulatory status of VoIP in selected countries – 2005
Exhibit 2 – Major submarine cable networks in Latin America
Exhibit 3 – Regulatory status of VoIP in selected countries – 2005




Table 1 – Top 6 Latin American countries for fixed lines in service – 2003 - 2004
Table 2 – Top 5 fixed line operators by revenue - 2004
Table 3 – Internet users and penetration – top 10 countries – 2004
Table 4 – Top 5 ADSL markets in Latin America – 2003 - 2004
Table 5 – Selected Latin American mobile markets by subscribers – 2003 - 2004
Table 6 – Market share – 2004
Table 7 – Mobile subscribers by digital technology - 2002 - 2004
Table 8 – Top fixed-line operators by revenue - 2004
Table 9 – Top fixed-line operators by lines in service - 2004
Table 10 – Telefónica Latinoamérica subsidiaries - 2004
Table 11 – Verizon Latin America ownership - 2004
Table 12 – Latin America – fixed lines in service – 1999 - 2004
Table 13 – Fixed lines in service by country – 2002 - 2004
Table 14 – Internet users in Latin America - 2000 - 2004
Table 15 – Internet users and penetration – top 10 countries – 2004
Table 16 – Internet users and penetration worldwide by region – 2000; 2005
Table 17 – Internet hosts – top 10 countries - 2003
Table 18 – Broadband subscribers in Latin America – 2001 - 2004
Table 19 – Broadband households worldwide by region - 2002 - 2004
Table 20 – DSL versus cable modem worldwide - 2003 - 2004
Table 21 – Broadband lines in Latin America by major country - 2003 - 2004
Table 22 – Top 12 broadband service providers Latin America – 2004
Table 23 – ADSL subscribers in Latin America – 2001 - 2004
Table 24 – DSL users in selected countries – 2003 - 2004
Table 25 – Market share – 2004
Table 26 – Subscriber distribution - September 2004
Table 27 – Latin America – mobile subscribers and penetration - 1998 - 2004
Table 28 – Mobile subscribers and penetration by country – September 2004
Table 29 – Largest Latin American mobile markets – December 2004
Table 30 – Top 10 mobile operators ranked by subscribers - 2003 - 2004
Table 31 – Mobile subscribers by digital technology - 2002 - 2004
Table 32 – América Móvil – subscribers by subsidiary – 2003 - 2004
Table 33 – Telefónica Móviles – mobile subscribers by subsidiary – 2003 - 2004
Table 34 – Telecom Italia in Latin America – mobile subscribers by subsidiary – 2003 - 2004
Table 35 – Millicom in Latin America – mobile subscribers by subsidiary – 2003 - 2004
Table 36 – Prepaid/post-paid subscribers, ARPU and revenue in Latin America – 2002 - 2004
Table 37 – Cable TV subscribers – major countries – 2003 - 2004
Table 38 – DTH subscribers in Latin America - 2002 - 2004
Table 39 – Sky Latin America structure and subscribers - 2002 - 2004