Latin American telecoms retail revenue to reach USD167 billion in 2017, Analysys Mason report

LONDON, UK, 18 March 2013 – Telecoms retail revenue in Latin America (LATAM) will grow at a compound annual growth rate (CAGR) of 3.3% between 2012 and 2017, according to new research by Analysys Mason (www.analysysmason.com). Mobile services will account for about 80% of this growth during the forecast period – increased usage of mobile handset data and mobile broadband services will boost mobile retail revenue at a 4.8% CAGR, while fixed retail revenue will grow at a 1.4% CAGR.

The report, titled Latin America telecoms market: trends and forecasts 2012–2017, analyses the most important trends that are affecting fixed and mobile telecoms services in the region, and assesses the impacts of these trends during the next 5 years.

“The relative value of the Latin American telecoms market is increasing as a result of higher revenue growth compared to developed markets,” explained Pablo Iacopino, Lead Analyst for Analysys Mason’s Global Telecoms Forecasts research programme. “Brazil is the largest telecoms market in LATAM in terms of telecoms retail revenue, generating USD62 billion in 2012, and is the fourth-largest market in the world after the USA, China and Japan.”

The main contributors to revenue growth during 2012–2017 will be mobile broadband (growing at a CAGR of 15.8%), mobile handset data (a CAGR of 12.6%) and fixed broadband (6.6%). These three service categories will account for almost 90% of the revenue increase during the forecast period. “GDP per capita is rising and customers will be more interested in high-value devices (smartphones, mobile broadband) – for example, the middle class is expanding in Brazil and the number of Internet users is expected to grow substantially in the next few years,” added Iacopino. Smartphones will account for 50% of total handsets in 2017 in LATAM.

However, voice services (mobile and fixed) are still predominant in LATAM – their contribution was about 60% of total retail revenue in 2012. The report forecasts that this contribution will decline to about 50% in 2017 because non-voice services will grow more strongly than voice.

The number of active mobile connections will also increase during this period, from 672 million connections in 2012 to 830 million by the end of 2017. The population penetration rate for connections will climb from 111% to 131% and Argentina, Brazil and Chile will be the most penetrated markets (above 150% in 2017).

“We expect an improvement in the customer mix because most of the growth in mobile handsets will come from contract connections,” explained Iacopino. The rate of growth in the number of prepaid handset connections will be lower than that of contract during the forecast period, growing at a CAGR of 3.0% compared with 6.9%. “This is partly because the ongoing cuts in mobile termination rates (MTRs) will reduce the need for multiple prepaid SIMs to optimise the cost of making calls.”

As well as providing a comprehensive overview of the region, the report also provides detailed forecasts for the seven countries in LATAM that collectively account for nearly 90% of the region’s GDP and almost 80% of the population: Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela. Figure 1 shows our retail revenue forecasts for these seven countries.

The report is published as part of Analysys Mason’s new Global Telecoms Forecasts research programme. The programme provides detailed 5-year forecasts of the fixed and mobile telecoms markets for 8 regions and more than 50 countries. More than 60 fixed, mobile and broadband KPIs are covered in each report.