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Central America Telecommunications Report Q2 2011
Business Monitor International, March 2011, Pages: 87
The Central America Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Central America's telecommunications industry.
Competition in Central America has certainly been a driving force behind the region's strong telecoms growth rates. This is particularly clear when looking at the mobile markets of the seven countries covered in our Central America Telecommunications Report. Strong competition has driven growth across several markets, leaving those with limited competition behind. In fact, upcoming competition in Costa Rica has seen incumbent Instituto Costarricense de Electricidad (ICE) introduce a range of new services which had a hugely positive impact on the market's growth rate in 2010. The threat of competition saw ICE make huge improvements to the types of services on offer, bringing prepay and 3G services to the market for the first time.
Panama too benefited from the introduction of two new operators in 2008 and 2009, boosting growth significantly. At the end of 2010, it had by far the highest penetration rate in Latin America at 185%. Again, the threat of new competition saw existing operators +móvil (Cable & Wireless) and Movistar (Telefónica) introduce new products in an attempt to hold on to their subscribers. The effect was exceptional growth in 2009 and into 2010. While the publisher believes this has led to a significant number of inactive subscribers, which will need to be discounted in future, it highlights the importance of competition in these markets.
Belize and Nicaragua have caught the publishers eye as markets that would benefit from additional competition. Both count on two mobile operators, but growth has been slow. The sale of shares in Belizean incumbent Belize TeleMedia Ltd (BTL) has not yet resolved the issue of ownership as there are still questions over the legality of the renationalisation. The publisher believes this uncertainty is bad news for the operator, preventing it from fully focusing on moving forward and introducing new services to Belize.
Data from Millicom International Cellular, whose Tigo service operates in El Salvador, Guatemala and Honduras, show that around 7% of the company's subscribers in the region were using 3G services at the end of 2010. The publisher believes this proportion will continue to grow with mobile broadband helping to boost the rate of subscriber take up. Improving ARPU figures back this view and suggest that mobile content will become an ever greater proportion of revenues in future.
Although the publisher believes broadband will provide the strongest growth rates over our forecast period, the mobile market will remain the key driver of telecoms revenues and many operators will benefit from offering wireless broadband services that will attract more connections on their networks.
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