2007 Telecoms, Mobile and Broadband in Latin America – Vertical Market

With over 610 pages of research, BuddeComm's 2007 Telecoms, Mobile and Broadband in Latin America - Market series contains a comprehensive analysis of the telecoms industry and the companies involved in it.

This research is divided into the following volumes:

Volume 1 – Latin American Convergence, Broadband and Internet Market
Volume 2 - Latin American Telecommunications Market
Volume 3 - Latin American Mobile Communications and Mobile Data Market


Executive summary
Latin America
The Latin American region has been making giant strides in the field of telecommunications since it recovered from the 1999-2003 economic recession. There are wide differences among the various nations, and indeed within each nation, due to the pronounced inequalities between rich and poor, and between urban and rural areas.
The Latin American economy grew by 5.0% in 2006. Forecasts for 2007/08 show a slowing down of economic growth, to 4.3% and 3.9% respectively.
Despite a low 17% average teledensity, fixed-line growth in Latin America continues to stagnate and there is a marked trend towards the use of alternative systems in fixed-line telephony, especially WLL and VoIP.
Broadband grew at an annual rate of around 54% in 2006, making Latin America one of the world’s fastest growing regions in terms of broadband uptake. But broadband penetration at end-2006 was only 2.5%, considerably less than the global average of 5.4%. With its level of GDP per capita, Latin America should in principle have ended 2006 with a broadband penetration of 3.5%.
By early 2007, broadband subscribers exceeded dial-up accounts in all of Latin America’s major markets. ADSL continues to be the prevalent broadband technology in Latin America, retaining a 73% share of the broadband market.
The Latin American broadband leaders are Brazil, Mexico, Argentina, and Chile. In early 2007, these four countries accounted for around 80% of all broadband subscribers in the region.
Latin America is at the forefront of global WiMAX deployment. WiMAX Forum certified networks have been launched in Argentina, Brazil, Chile, Colombia, Ecuador, Guatemala, and Venezuela, while pre-WiMAX systems are operating in Costa Rica, the Dominican Republic, Jamaica, Mexico, Peru, Puerto Rico, and Uruguay.
Several companies are planning to launch IPTV, but some must wait for regulatory reforms because in a few countries (eg, Argentina) telcos are not allowed to offer pay TV services. Telefónica, in particular, is hoping to launch IPTV in Chile, Argentina, and Brazil, where it could replicate the service it already offers in Spain under the brand name Imagenio. Other companies with plans to launch IPTV include UNE-EPM and ETB in Colombia, and Telemar and Brasil Telecom in Brazil.
TV companies in Mexico began to offer Latin America’s first HDTV services in 2005 and 2006, following the government’s formal approval of the ATSC standard for DTTV in July 2004.
In June 2006, the Brazilian government officially adopted the Japanese digital TV standard, known as Integrated Services Digital Broadcasting (ISDB).
Honduras was the third country in Latin America and the first in Central America to elect a standard for digital terrestrial TV. It officially adopted the ATSC digital TV standard in January 2007.
There has been much disagreement in Latin America on the issue of DTT standards, since there is a strong lobby that favours the ATSC system, while supporters of Europe’s Digital Video Broadcasting (DVB) are also active, and of course, Brazil is exerting pressure on its neighbours to adopt the ISDB standard.
Mobile telephony is one of the most dynamic industries in Latin America, growing 37% in 2005 and 28% in 2006. Subscriber additions were slowing down towards the end of 2006, however, which could be an indication that the region’s largest markets are nearing maturity.
Mobile phones have overtaken fixed-lines in service in every Latin American country except Cuba. In early 2007, there were 308 million mobile subscribers in Latin America compared with 96 million fixed-lines. Paraguay leads the trend, with ten mobile phones for every fixed line in service.
By early 2007, mobile penetration in the region had surpassed the 50% milestone, but there are considerable variations from country to country. Apart from a few small Caribbean islands with mobile penetration is over 100%, the highest rates are found in Chile, Jamaica, and Argentina, with 80.5%, 80.4%, and 74.8% penetration respectively. Cuba continues to stagnate at 1.4% mobile penetration, while Haiti shot up by 323.1% in 2006 to 19.8% penetration, thanks to the launch in May 2006 of Digicel’s low-priced GSM phones.
Seven countries – Brazil, Mexico, Argentina, Colombia, Venezuela, Chile, and Peru – claim around 84% of the region’s mobile subscribers. Brazil and Mexico together account for 51% of all mobile subscribers in Latin America.
GSM is the preferred technology by far, with a market share of around 69%, CDMA continues to increase sluggishly, and TDMA is on its way out. Every country in Latin America and the Caribbean (including, since 2006, Haiti) enjoys GSM-based mobile services.
3G spectrum auctions are expected to begin in Brazil and in Chile before the end of 2007. Differently from Europe and Japan, Latin American countries do not anticipate expensive 3G licences.
Mobile Average Revenue per User (ARPU) in Latin America has stabilised at around US$17, increasing slightly during 2006 in some of the major markets.
América Móvil and Telefónica Móviles (jointly with Portugal Telecom in Brazil) compete with each other in all of Latin America’s major economies. Between them, they serve around 65% of the region’s mobile subscribers.

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