REGIONAL FORECAST REPORT LATIN AMERICA TELECOMS … · 21. Mobile broadband: Growth in connected tablets will mitigate the decline of large-screen mobile broadband devices 22. Mobile

Latin America telecoms market: trends and forecasts 2016–2021

© Analysys Mason Limited 2016

REGIONAL FORECAST REPOR T

LATIN AMERICA TELECOMS MARKET:

TRENDS AND FORECASTS

2016–2021

ROMAN ORVISKY and ANDREW CHEUNG



REPORT COVERAGE

Geographical Key performance indicators

Regions modelled:

Latin America

(LATAM)

Countries modelled

individually

Argentina

Brazil

Chile

Colombia

Mexico

Peru

Venezuela

Connections Revenue

Mobile

Handset, mobile

broadband,1 M2M2

Prepaid, contract

2G, 3G, 4G

Smartphone,

non-smartphone

Fixed

Voice, broadband,

IPTV, dial-up

Narrowband voice,

VoBB

DSL, FTTP/B, cable,

BFWA, other

Mobile

Service,3 retail

Prepaid, contract

Handset, mobile

broadband,1 M2M2

Handset voice,

messaging, data

Fixed

Service,3 retail

Voice, broadband,

IPTV, dial-up, BNS

DSL, FTTP/B, cable,

BFWA, other

ARPU

Voice traffic Mobile:

SIMs, handset

Prepaid, contract

Handset voice, data

Fixed and mobile

Outgoing minutes,

MoU

2

This report provides:

a 5-year forecast of 175 mobile and fixed KPIs for Latin

America, as a whole and 7 key countries

an in-depth analysis of the trends, drivers and forecast

assumptions for each type of mobile and fixed service, and for

key countries

an overview of operator strategies and country-specific topics,

in order to highlight similarities and differences by means of a

cross-country comparison

a summary of results, key implications and recommendations

for mobile and fixed operators.

Our forecasts are informed by on-the-ground regional market

experts from our topic-led research programmes and our

consulting division, as well as external interviews.

In addition to our robust set of historical data, our forecasts draw

on a unique and in-house modelling tool, which applies a rigorous

methodology (reconciliation of different sources, standard

definitions, top-down and bottom-up modelling).

For the complete data set, see the accompanying Excel file at

www.analysysmason.com/LATAM-telecoms-forecast-Sep2016.

About this report

1 Includes USB modem, and mid- and large-screen, but not handset-based data.

2 M2M connections and revenue figures include mobile services only.

3 Service revenue is the sum of retail and wholesale revenue.


© Analysys Mason Limited 2016 3

8. Executive summary

9. Total retail revenue growth will accelerate, as regulatory impact on revenue

dissipates and data service adoption grows

10. Handset data and fixed broadband will be the main growth drivers

11. Revenue will grow in most LATAM markets over the forecast period

12. Key trends, drivers and assumptions for the mobile and fixed markets

13. Key implications and recommendations for telecoms operators

14. Regional forecasts and cross-country comparison

15. Geographical coverage: The 7 largest markets by revenue in the region

modelled individually

16. Market context: Economic struggles are affecting a number of markets,

while foreign exchange movements mask continued growth in others

17. Revenue and ARPU: Almost two thirds of total mobile retail revenue will

come from data in 2021

18. Mobile penetration: Mexico and Peru will be the only two major markets

with strong mobile user base growth

19. Mobile connections: 3G will continue to be the leading technology in LATAM

through 2021

20. Smartphones and LTE: Device affordability will be key in driving smartphone

penetration

21. Mobile broadband: Growth in connected tablets will mitigate the decline of

large-screen mobile broadband devices

22. Mobile ARPU: User base rationalisation and 4G take-up will sustain mobile

ARPU across the region

23. Data and revenue by generation: 3G will still be the main source of mobile

service revenue in LATAM in 2021

24. Fixed services: IPTV will remain a niche product, due to a restrictive

regulatory environment in Argentina and Mexico

25. Fixed broadband: Chile became the leader in fixed broadband penetration

in 2015 and will remain so throughout the forecast period

26. Key drivers at a glance for each Latin America market

27. Key drivers at a glance table: methodology [1]

28. Key drivers at a glance table: methodology [2]

29. Individual country forecasts

30. Argentina: Inflation will drive revenue growth in nominal terms

31. Argentina – mobile: Grupo Clarin’s acquisition of Nextel should intensify

competition in an already contested market

32. Argentina – fixed: Growth in fixed broadband has been sluggish, and

concentrated mainly in cable

33. Brazil: Strong growth in handset data revenue should compensate for

declining mobile voice revenue

34. Brazil – mobile: User base has declined sharply by nearly 25 million, as

MTR cuts limit the usefulness of owning multiple SIMs

35. Brazil – fixed: Broadband growth slowed, despite a rapidly increasing cable

user base

36. Chile: Short-term revenue growth will be driven by handset data and fixed

broadband

Contents



37. Chile – mobile: ARPU is being sustained by 4G take-up and low-value

prepaid subscription losses

38. Chile – fixed: Speed upgrades continue to drive broadband ASPU up

39. Colombia: MTR cuts will have a significant effect on mobile revenue

40. Colombia – mobile: Alternative 4G operators grew at the expense of MVNOs

in 2015

41. Colombia – fixed: Improvements in broadband affordability will drive user

base growth

42. Mexico: Revenue will grow, as intensifying competition in the mobile market

will drive user base growth and data spending

43. Mexico – mobile: Telcel’s dominance is being challenged by both AT&T and

continued regulatory measures

44. Mexico – fixed: The fixed broadband market has increased in 2015 and

growth should continue through the forecast period

45. Peru: Revenue growth will be driven by increasing mobile data usage and

fixed broadband adoption

46. Peru – mobile: Relatively low mobile penetration and data usage leave a lot

of potential for growth

47. Peru – fixed: Broadband ASPU has started to fall to more affordable levels

48. About the authors and Analysys Mason

49. About the authors

50. Analysys Mason’s consulting and research are uniquely positioned

51. Research from Analysys Mason

52. Consulting from Analysys Mason

Contents



Figure 1: Telecoms retail revenue by service type and total service revenue

(retail and wholesale), Latin America, 2011–2021

Figure 2: Telecoms retail revenue growth by service type, Latin America, 2015–

2021

Figure 3: Telecoms retail revenue growth by type and country, Latin America,

2015–2021

Figure 4: Summary of key trends, drivers and assumptions for Latin America

Figure 5: Mobile connections by technology generation and NGA share of fixed

broadband connections, by country, Latin America, 2021

Figure 6: Metrics for the 7 countries modelled individually in Latin America,

2015

Figure 7: Telecoms retail revenue by service type, fixed voice and fixed

broadband ASPU, and mobile ARPU, Latin America, 2011–2021

Figure 8: Telecoms retail revenue by service type, total service revenue and

growth rates, Latin America, 2015–2021

Figure 9: Connections by type, and growth rates, Latin America, 2015–2021

Figure 10: Active mobile SIM penetration by country (excluding M2M), Latin

America, 2011–2021

Figure 11: Mobile connections by technology generation (excluding M2M), and

3G and 4G/5G’s share of connections, Latin America, 2011–2021

Figure 12: Smartphones as a percentage of handsets, and LTE’s share of total

connections (excluding M2M), Latin America, 2015 and 2021

5

Figure 13: Mobile broadband connections by screen size and technology, Latin

America, 2011–2021

Figure 14: Mobile ARPU by country, Latin America, 2011–2021

Figure 15: Mobile service revenue and ARPU by technology, Latin America,

2011–2021

Figure 16: Data traffic and revenue per megabyte, Latin America, 2011–2021

Figure 17: Fixed broadband connections by type, and fixed voice, IPTV and

mobile broadband connections, Latin America, 2011–2021

Figure 18: Fixed broadband penetration of households by country, Latin

America, 2011–2021

Figure 19: Major forecast drivers: current situation (2015) and future trajectory

(2016–2021), by country, Latin America

Figure 20: Methodology for attributing scores to each element in the key drivers

table (current and future) and impact of high scores


(retail and wholesale), Argentina, 2011–2021


growth rates, Argentina, 2015–2021

Figure 23: Connections by type, and growth rates, Argentina, 2015–2021

Figure 24: Mobile, smartphone and 4G penetration rates, Argentina, 2011–

2021

List of figures



Figure 25: Mobile ARPU by type, and mobile ARPU, Argentina, 2011–2021

Figure 26: Summary of key mobile market drivers and assumptions, Argentina

Figure 27: Fixed penetration rates by service type, Argentina, 2011–2021

Figure 28: Fixed ASPU by service type, Argentina, 2011–2021

Figure 29: Summary of key fixed market drivers and assumptions, Argentina


(retail and wholesale), Brazil, 2011–2021


growth rates, Brazil, 2015–2021

Figure 32: Connections by type, and growth rates, Brazil, 2015–2021

Figure 33: Mobile, smartphone and 4G penetration rates, Brazil, 2011–2021

Figure 34: Mobile ARPU by type, and mobile ARPU, Brazil, 2011–2021

Figure 35: Summary of key mobile market drivers and assumptions, Brazil

Figure 36: Fixed penetration rates by service type, Brazil, 2011–2021

Figure 37: Fixed ASPU by service type, Brazil, 2011–2021

Figure 38: Summary of key fixed market drivers and assumptions, Brazil


(retail and wholesale), Chile, 2011–2021


growth rates, Chile, 2015–2021

6

Figure 41: Connections by type, and growth rates, Chile, 2015–2021

Figure 42: Mobile, smartphone and 4G penetration rates, Chile, 2011–2021

Figure 43: Mobile ARPU by type, and mobile ARPU, Chile, 2011–2021

Figure 44: Summary of key mobile market drivers and assumptions, Chile

Figure 45: Fixed penetration rates by service type, Chile, 2011–2021

Figure 46: Fixed ASPU by service type, Chile, 2011–2021

Figure 47: Summary of key fixed market drivers and assumptions, Chile


(retail and wholesale), Colombia, 2011–2021


growth rates, Colombia, 2015–2021

Figure 50: Connections by type, and growth rates, Colombia, 2015–2021

Figure 51: Mobile, smartphone and 4G penetration rates, Colombia, 2011–

2021

Figure 52: Mobile ARPU by type, and mobile ARPU, Colombia, 2011–20211

Figure 53: Summary of key mobile market drivers and assumptions, Colombia

Figure 54: Fixed penetration rates by service type, Colombia, 2011–2021

Figure 55: Fixed ASPU by service type, Colombia, 2011–2021

Figure 56: Summary of key fixed market drivers and assumptions, Colombia

List of figures




(retail and wholesale), Mexico, 2011–2021


growth rates, Mexico, 2015–2021

Figure 59: Connections by type, and growth rates, Mexico, 2015–2021

Figure 60: Mobile, smartphone and 4G penetration rates, Mexico, 2011–2021

Figure 61: Mobile ARPU by type, and mobile ARPU, Mexico, 2011–20211

Figure 62: Summary of key mobile market drivers and assumptions, Mexico

Figure 63: Fixed penetration rates by service type, Mexico, 2011–2021

Figure 64: Fixed ASPU by service type, Mexico, 2011–2021

Figure 65: Summary of key fixed market drivers and assumptions, Mexico

7


(retail and wholesale), Peru, 2011–2021


growth rates, Peru, 2015–2021

Figure 68: Connections by type, and growth rates, Peru, 2015–2021

Figure 69: Mobile, smartphone and 4G penetration rates, Peru, 2011–2021

Figure 70: Mobile ARPU by type, and mobile ARPU, Peru, 2011–20211

Figure 71: Summary of key mobile market drivers and assumptions, Peru

Figure 72: Fixed penetration rates by service type, Peru, 2011–2021

Figure 73: Fixed ASPU by service type, Peru, 2011–2021

Figure 74: Summary of key fixed market drivers and assumptions, Peru

List of figures



Figure 10: Active mobile SIM penetration by country (excluding M2M), Latin America, 2011–

2021

18

Significant MTR cuts have been reflected in declining user bases

of Brazil and Chile.

The mobile user base in Chile declined for the first time in 2014,

as a result of the Chilean regulator’s 75% MTR cut in January of

that year. An MTR cut of 33% in Brazil had a similar effect in 2015:

the number of prepaid subscriptions dropped by nearly 25 million,

although this may also have been due to the stagnating economy.

Colombia is following this pattern, as the MTR was cut by 42% at

the end of 2014, with two more cuts of over 40% to follow over the

next 2 years. However, Colombia’s mobile penetration was

considerably lower than that of Brazil or Chile in 2015, and we

expect its user base to continue growing slowly over the forecast

period. In contrast, mobile penetration is falling in Venezuela,

because economic problems are significantly limiting device

affordability.

Growing competition will drive down prices and the mobile user

base in Mexico will grow as a result.

The Mexican regulator IFT has implemented a number of

measures to limit the incumbent Telcel’s strong grip on the mobile

market in recent years, starting with cutting its maximum MTR per

minute to zero. Nevertheless, Telcel retained a market share of

nearly 70% at the end of 2015. Increased competition from AT&T

and emerging MVNOs should drive down prices, as mobile ARPU

in Mexico was the second highest in the region in 2015.

Mobile penetration: Mexico and Peru will be the only two major markets

with strong mobile user base growth

0%

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Argentina Brazil Chile

Colombia Mexico Peru

Venezuela Latin AmericaSource: Analysys Mason



CONTENTS

48

EXECUTIVE SUMMARY

REGIONAL FORECASTS AND CROSS-COUNTRY COMPARISON

INDIVIDUAL COUNTRY FORECASTS

ABOUT THE AUTHORS AND ANALYSYS MASON



About the authors

Andrew Cheung (Research Analyst) is a member of Analysys Mason's regional markets research team, contributing to Telecoms Market Matrix,

European Core Forecasts and European Country Reports. Before joining Analysys Mason, he researched the calcification of polymeric heart

valves. Andrew’s prior internship experiences include enhancing the performance of fuel cells and analysing data from energy consumption. He

holds a Master’s degree in Chemical Engineering from the University of Cambridge.

Roman Orvisky (Analyst) is a member of the regional markets research team in London, contributing to the Telecoms Market Matrix, European

Core Forecasts, European Country Reports and Global Telecoms Forecasts programmes. Prior to joining Analysys Mason in November 2014, he

worked in the Transaction Services department of the Royal Bank of Scotland in a customer experience internship role. During his studies,

Roman focused on consumer behaviour in an online context, and has experience in churn modelling in the telecoms sector, social network

analysis and browsing data analysis. Roman holds a Bachelor’s degree in business from Durham University, and an MSc in marketing research

from the Tilburg University School of Economics and Management.



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Research from Analysys Mason

We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors, through a

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51

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Documents

REGIONAL FORECAST REPORT LATIN AMERICA TELECOMS … · 21. Mobile broadband: Growth in connected tablets will mitigate the decline of large-screen mobile broadband devices 22. Mobile