Operators Must Look Beyond Traditional Services
Trends in the Latin American mobile market favour new strategies for the region's operators as the potential to grow connections diminishes but new technologies encourage greater usage. New technologies open different avenues for generating new incomes, seeing information and communication technology (ICT) supporting the growth potential of a number of new industries. Nevertheless, BMI believes consumers will remain the key drivers for operators' revenues over our five-year forecast period.
Latin America's vast mobile subscriber growth trend has passed its peak, slowing to a more sedate 3% average growth rate across the region in 2013, a vast difference from the 22.3% average five years earlier. BMI forecasts show few markets generating growth over the 2014-2018 period, with Argentina, Chile, Ecuador and Uruguay reporting less than 1% growth by 2018. Only Brazil offers real potential, with 3.4% average growth forecast between 2014 and 2018, all the more appealing as it has the region's largest population. Bolivia and Paraguay have higher rates of growth, but their lower ARPUs and smaller populations restrict the potential for increasing revenues alongside this growth.
BMI's forecasts highlight the challenges facing Latin America's mobile operators América Móvil, Telefónica, Millicom International Cellular and a number of local players. The growth remaining in the region's markets is either in rural areas that are hard to reach or among low-income subscribers offering low returns; often the circumstances are linked, compounding the problem. Government requirements to ensure networks reach rural areas will see mobile growth continue outside major towns and cities but BMI expects operators to increasingly focus on generating more revenues from their existing subscribers in order to expand revenues.
|Expansion Opportunities Diminished|
|Mobile Growth (%)|