Latin American Carriers Bet on Mobile Data Growth Opportunities to Offset Drop in Voice and Interconnection Revenues

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New analysis from Frost & Sullivan, (http://www.frost.com/sublib/display-report.do?id=NFCB-01-00-00-00&src=PR), finds that the market is set for strong growth despite an 18.7% drop in 2015 revenues from the previous year, mainly due to highly fluctuating exchange rates, as most markets registered some growth in local currency. The market earned revenues of $58.32 billion in 2015, with number of lines decelerating by 3% to touch 546.8 million due to carriers' stricter churn policies, which led to the disconnection of unused, low-value lines. With the growing popularity of data services reviving the market, revenues are expected to reach $76.85 billion in 2021, at a compound annual growth rate of 4.7%.

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"Postpaid lines are also being stimulated by ( ) and device subsidies, as many users wish to switch from a feature phone to a smartphone," said Frost & Sullivan Digital Transformation Industry Analyst . "The prepaid segment is also expected to reduce further due to regulatory mobile termination rate (MTR) cuts, which in due course will translate to reduced price difference between on-net and off-net calls and elimination of the need for multiple SIM cards."

Carriers look to offset the loss in interconnection revenue, generated by MTR cuts, with strong growth in data services such as , and ( ), which currently represent 37.3% of the total mobile services revenue, and are expected to reach to 57.3% in 2021.

Meanwhile, the lack of competition in rural areas and market concentration in some countries are pegging back market growth to some extent. Governments are addressing this challenge through the implementation of ( ) and the regulation of ( ).

"Government initiatives such as MNP and MVNO regulations have experienced varying levels of success in each country," noted Jordan. "Following these announcements, several MVNOs, including Virgin Mobile and Chilean retailer Falabella, have launched services or announced plans to operate in several countries in the region."

More highlights from the report:

is part of the (http://ww2.frost.com/research/industry/information-communications-technologies/mobile-wireless-communications) Growth Partnership Service program. Frost & Sullivan's related studies include: CACAR Telecommunications Services Market, Brazilian and Colombian M2M Markets, Total Telecommunications Services Market in Brazil , Colombia and Mexico and Latin America Outlook for the Information Technology Services Industry. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

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Contact:
Francesca Valente
Corporate Communications – Latin America
P: +54 11 4777 5300
F: +54 11 4777 5300
E: francesca.valente@frost.com

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