The Latin American mobile services market is projected to grow at a compound annual growth rate (CAGR) of 7.4 percent in terms of revenue from 2010 to 2016, driven by the widening coverage of mobile broadband services and the increasing penetration of smart devices. This, in turn, is boosting the development of new services, including convergent services, by mobile operators. The market is poised to grow rapidly, stimulated by the expanding coverage of mobile broadband networks and deeper penetration of smart devices (which allow internet access) at lower prices. Operators in Latin America are increasing CAPEX designated for 3G network expansion and bandwidth capability, with the objective of supporting the increasing demand of data traffic generated by smart devices.
Some operators in the region have already upgraded their networks to 3.5G (HSPA+), while other operators are conducting trials of 3.5G and 4G networks. With 4G speeds touching 1Gbps in low mobility communication, mobile broadband is likely to substitute fixed broadband for a majority of the population. As the voice services market approaches saturation in some countries, mobile operators are focusing their investments on new sources of revenue, introducing a new front for competition. Investments in 3G networks and the adoption of smart devices are likely to stimulate the launch of appealing services and applications for end users.
Development of Innovative Voice and Data Services is Critical to Sustain Growth Momentum
The heavy tax burden on mobile services, especially in Brazil, and ROI-related problems with implementing networks in distant geographic areas and small cities are challenging service operators. At the same time, the lack of competition in distant and remote geographical areas and market concentration in some countries are also dampening the Latin American mobile services markets. Regulatory delays on important decisions relating to the mobile market are another aggravation. Mobile number portability, MVNOs, and cost-based mobile termination rates, which could stimulate competition and attract new entrants, are available in only a few countries. Delays on spectrum auctions and low spectrum caps also affect competition.
In this scenario, mobile operators have to launch innovative services, bundle mobile telephony with other telecommunication services, and increase 3G network coverage and service quality to address customers' needs. This will minimize the impact of delayed regulations, while stimulating market development. Mobile operators need to launch innovative voice and data services, which can address customer needs, while maintaining reasonable service quality and generating free cash flow. The mobile broadband service requires significant investments in backbone, backhaul, and other network elements. Mobile operators need to develop plans that don't excessively impact network usage, while addressing each customer groups' niche requirements.
Expert Frost & Sullivan analysts thoroughly examine the following countries in this research:
Click for Report details:Latin America Mobile Services Markets Outlook II; 2010