Nearshore Americas

Report: Broadband Services Market in LatAm Growing Despite Limitations

BY STAFF REPORT

The broadband services market in Latin America has been expanding rapidly after making a turnover of $11 billion  in 2012, says a new report from analyst firm Frost & Sullivan.

An increased investment in telecom infrastructure, fierce competition among carriers to sign up more customers, and bundled service offerings are some of the factors driving the market in the region.

The analyst firm forecasts that Latin America’s broadband services market would reach $18.24 billion in 2017.

“Intense competition has compelled telecom operators to deploy integrated infrastructure networks and offer convergent services at competitive prices, thereby popularizing broadband services,” said Frost & Sullivan ICT industry analyst Gina Sanchez.

”For instance, fiber-to-the-home (FTTH) is already a key component in the operators’ strategy. It will become in the next few years indispensable as the integration of broadband and interactive pay-TV (IPTV) will be among the top priorities.”

Value-added services including IPTV, voice over Internet protocol, Web 2.0-based applications, and the availability of global as well as local content on the Internet, are persuading a large number of people to hook up to the Web.

“This digitalized culture has enhanced awareness of the benefits of broadband, boosting connection and bandwidth demand,” says the analyst firm.

But many operators, especially alternative service providers, are finding it tough to capitalize on the demand due to limited access to infrastructure and the high costs of broadband rollouts.

Some service providers are delaying expansion into rural areas because they fear they may have to wait for years to get a return on their investments.

The low penetration of personal computers in remote regions and among the low-income households is hampering the growth.  Therefore, Internet service providers (ISPs) are providing PCs through financial loans, price reductions, and ensuring their availability in popular retail stores to grant accessibility to the lower-income strata.

“With the high-income segment reaching saturation, ISPs need to tap the potential in the lower-income classes through suitable pricing strategies,” noted Sanchez. “Employing cost-efficient, faster technologies rather than conventional digital subscriber line and cable modem will enable broadband ISPs to ensure last-mile broadband access, including FTTH, 3G, 4G and LTE.”

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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