According to Frost & Sullivan, revenues from the Latin American mobile service market will increase from $86.32 billion in 2012 to $112.45 billion in 2017. The key growth drivers will be 3G and 4G services.
Increasing investments in 3G and 4G network expansion, along with mobile operators’ focus on quality of services, will drive this growth. Further, the proliferation of smartphones, tablets and notebooks has contributed to the increased uptake of data and value added services.
Further, the production of smart devices locally has decreased cost, especially in Brazil, thereby driving the use of mobile services. This, along with subsidised prices and installment schemes also facilitated the purchase of smartphone devices in Latin America.
According to the research firm, the prepaid and hybrid plans improve the affordability of such services to the emerging middle class. Consequently, this increases service providers’ margins in the region. At present, interconnection tariffs represent close to 25 per cent of a company’s revenue in the region. This is leading companies to look for alternative sources of revenue. Additionally, low cap on spectrum and delays in spectrum auction further restrain market development.
Countries like Argentina, Brazil, Chile and Venezuela have achieved 100 per cent telecom penetration, while Colombia and Mexico are about to achieve 100 per cent penetration. The increase in machine-to-machine and mobile broadband communication, as well as the growing use of multiple SIM cards, is going to drive the growth in the telecom market in these countries.
Going forward, operators’ strategy to encourage the use of post-paid lines through special tariff promotions and bundled packages with mobile data services will ensure steady adoption of mobile phones in the region.
