Despite the slowdown in global telecoms markets, the Latin America & Caribbean region will continue to experience buoyant growth and 2014 will see a regional telecoms service market that is valued at USD143 billion, with the leading countries being Brazil, Mexico, Venezuela, Argentina and Colombia. From 2009 to 2014 the CAGR (compound annual growth rate) will be 6% for wireless subscribers and 15% for broadband subscribers, while the number of wireline subscribers will be essentially flat. This subscriber growth will help to drive growth in market value of an average 4% per year for wireless market, and 2% for wireline. This is a far cry from the growth experienced over the last few years in the region (2004-2009 CAGR of over 13% for the total regional market value) but will be far in excess of the flat-to-anaemic growth that will be seen in Western Europe and North America; hence the aggressive moves currently being seen from leading service providers to consolidate or expand their presence in the region.
Growth rates will vary substantially across the region. Wireless subscriber growth will average 10% or more per year in countries such as Bolivia, Peru, Costa Rica, Nicaragua and Panama. Broadband subscriber growth will average 25% or more per year in Ecuador, Guatemala, Bolivia, Nicaragua, El Salvador and Paraguay. By contrast, in terms of market value, growth rates for both Mexico and Chile will average less than 2% per year. Meanwhile wide disparities in ARPU will remain, with 2014 still seeing a more than three-to-one ratio between countries with the highest and lowest ARPUs.
Who are the current leading operators in the region? Telefonica has been the largest player and accounted for 24% of telecoms service market revenues in 2009, thanks in large part to leading or secondary market positions in Argentina, Chile, Peru, Colombia, Brazil and Venezuela. However, when America Movil completes the absorption of Carso/Telmex/Telint, the combined entity will leapfrog Telefonica and account for no less than 32% of the regional market. It will be the largest player in Mexico, Colombia, Ecuador, Guatemala and the Dominican Republic, in addition to having large operations in a long list of other countries. The third placed regional player is Oi; its status as the largest operator in Brazil translates into a 12% share of the total Latin American market. Following this pack are Portugal Telecom, Telecom Italia, CANTV, Telecom Argentina and Millicom.
As the market continues to grow, there can be no doubt that Telefonica and America Movil will continue to dominate the region. It is equally certain that a chasing pack will invest large amounts of money trying to establish and grow their regional operations. Vodafone and Telecom Italia are the latest companies in the news who appear to be considering major moves in the region.
This data and analysis is taken from TeleGeography’s GlobalComms Insight service, which includes comprehensive market forecasts and forward-looking analysis to help clients track market trends and to identify new opportunities. The service covers all regions and not just Latin America.
GlobalComms Insight provides:
- Forecasts of subscribers, service revenues, penetration rates and revenue per user by country and by region
- Timely quarterly market summaries providing analysis of service provider revenues, and wireless and broadband market growth
- Rankings of mobile and broadband service providers by key operating metrics
- Monthly analysis of hot topics and key trends in the industry