Kirk LaughlinData from TeleGeography’s GlobalComms Insight Research Service project that telecom service revenue in Latin America and the Caribbean will grow from $122 billion in 2009 to $143 billion in 2014, led by the wireless sector. That signals a good growth opportunity for carriers in the region, as well as those looking to buy stakes in existing operators.
Telecom revenue in Brazil, Latin America’s largest market, will top $55 billion in 2014, followed by Mexico, with $25 billion, and Venezuela, at $13 billion. Brazil is growing revenue at 39 percent and Mexico at 17 percent. Venezuela is a distant third, at 9 percent.
Total mobile revenues are projected to grow just over 4 percent annually, while revenues from fixed-line (broadband and voice) services will grow just over 2 percent annually. Revenues will be driven by wireless and broadband subscriber annual growth rates that average 6 percent and 15 percent respectively. While this is far below the stunning growth rates achieved over the previous five years, it’s well above projected growth rates in Europe and North America.
The continued growth of telecom in Latin America is one factor driving recent M&A activity in the region, despite the existing high level of concentration. After America Movil’s planned acquisition of Carso Global (Telmex and Telint) and Telefonica’s acquisition of Portugal Telecom’s stake in Brazilian mobile operator Vivo, the two companies will generate 32 percent and 27 percent of total Latin American telecom revenues, respectively.
Latin America’s mobile market specifically will continue to perform strongly, according to research firm Euromonitor, with mobile subscriptions taking over fixed lines as the preferred method of communication. In 2009, mobile subscriptions penetration totaled 88.2 percent of the population. That’s compared to 55.2 percent in Asia Pacific, 90.4 percent in North America and 50.6 percent in the Middle East and Africa. Wireless in CALA has benefited from geographical hurdles to fixed line expansion and cheap deals for mobile voice and mobile Internet. In 2009, fixed line penetration comprised only 18.6 percent of the total population.
Euromonitor said the market has strong growth potential, reflecting reviving economic growth and improving income levels, as well as deals targeted to attract low-income consumers. Expanding the mobile market will benefit consumers and the business environment by offering on-the-move telephone and Internet access, while potentially boosting telecommunications profits.
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