Latin American Mobile Observatory 2011 Driving Economic and Social Development Through Mobile Broadband Latin American Mobile Observatory 2011
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Latin American Mobile Observatory 2011 Driving Economic and Social Development through Mobile Broadband Latin American Mobile Observatory 2011 Contents Geographic scope of this study 1 1. Introduction 3 2. Executive Summary 5 3. The LatAm mobile market today 9 3.1 The world’s 3rd largest mobile market 9 3.2 A very diverse region 10 3.3 Market dynamics in LatAm 11 3.4 Competitive intensity 15 3.5 Converging standards 17 4. Mobile broadband as a driving force for development 21 4.1 Pent-up demand for mobile broadband 21 4.2 Distinctive characteristics in the LatAm 20 mobile broadband market 22 4.3 Mobile broadband evolution and the data explosion 24 4.4 The importance of mobile broadband to connect the unconnected 28 4.5 How mobile broadband can help governments achieve their ICT development goals 29 4.6 The Mobile Broadband Readiness Index (MBRI) 31 5. The Economic Contribution of the Mobile Industry 35 5.1 The contribution of mobile to GDP 35 5.2 The value-add of the mobile ecosystem 35 5.3 Contribution to employment 38 5.4 Contribution to public funding 38 5.5 The role of mobiles in developing local industries and driving innovation 39 6. Corporate sustainability: The environmental and social impact 41 6.1 The environmental impact of the mobile industry 41 6.2 The social impact of the mobile industry 44 6.3 Role of mobile in disasters 50 7. Regulatory Enablers to Spur Further Growth 53 7.1 The need for transparent, predictable, consultative and aligned regulatory regimes 53 7.2 Reducing ineffective taxation to drive penetration 54 7.3 Incentives to drive universal access 57 7.4 Limitations to expanding infrastructure and sharing 59 7.5 Importance of a clear roadmap for spectrum allocation 60 8. Glossary 67 9. Appendix: Mobile Broadband Readiness Index Methodology 68 9.1 Summary of Metrics Used 68 9.2 Scoring Methodology 68 9.3 Index Scores by Metric 68 9.4 Sources and Definitions 75 10. About the Authors 79 1 Latin American Mobile Observatory 2011 Geographic Scope of this Study With 47 countries and territories, 594m people, multiple different cultures, languages and dialects, LatAm is a very diverse region. Including countries that range from the size of Brazil (alone 80% the size of Europe) to tiny Caribbean islands (Bermuda is the 3rd smallest territory in the world) LatAm encompasses huge variety. Referring to LatAm in singular form without considering the intricacies and complexities among and within its countries would ignore its rich diversity. It would not be possible to profile each of the 47 countries and territories in the detail they deserve. In addition, the availability and reliability of data for many of the smaller territories varies enormously. Therefore, this report will focus on the 20 countries shown below (to be referred to as LatAm 20 throughout the report). These 20 countries accounted for 98% of mobile connections in 2011 and provide a fair representation of the region from an economic, geographic, political and cultural standpoint. For the purposes of this report, countries LatAm 20 Countries outside of the LatAm 20 will be covered Countries outside LatAm 20 through case studies to highlight their unique characteristics, noteworthy market moves and cutting-edge innovations. Where LatAm is referenced in the report, we refer to the entire region. 2 Country Mobile subs. Percentage of subs Brazil BRA 240,070,847 38.0% Mexico MEX 98,766,779 15.6% Argentina ARG 55,132,579 8.7% Colombia COL 47,763,544 7.6% Venezuela VEN 30,666,438 4.9% Peru PER 26,394,444 4.2% Chile CHL 23,944,500 3.8% Ecuador ECU 16,241,741 2.6% Guatemala GTM 14,590,000 2.3% Dominican Republic DOM 9,367,544 1.5% El Salvador SLV 8,720,323 1.4% Bolivia BOL 7,602,123 1.2% Honduras HND 7,348,575 1.2% Paraguay PRY 6,560,500 1.0% Haiti HTI 5,406,113 0.9% Panama PAN 5,381,125 0.9% Uruguay URY 4,739,005 0.7% Nicaragua NIC 4,200,000 0.7% Costa Rica CRI 3,904,000 0.6% Jamaica JAM 3,658,074 0.6% Other 11,466,822 1.8% Total 631,925,076 100% 3 Latin American Mobile Observatory 2011 1. Introduction Introduction The Mobile Observatory series began with a report on the European mobile market in 2008 and since then has published reports on the Asia Pacific and African markets as well as updates on the European market. This is the first LatAm edition of the GSMA Mobile Observatory and provides a comprehensive review of the LatAm mobile communications industry. This Observatory collates the latest statistics and market developments, providing a reference point for participants in the mobile industry, policy makers and other interested stakeholders. It covers the state of the industry, including the evolution of competition, innovation in new products, services and technologies and the industry’s contribution to social and economic development in LatAm. These reports underline the industry’s commitment to transparency and to engaging with a wide set of stakeholders in planning its future direction. The report integrates data from a wide range of existing sources to provide a comprehensive picture of the LatAm mobile industry. These include public sources such as the ITU, World Bank and research by National Regulatory Authorities as well as commercial providers such as Wireless Intelligence, Telegeography, Convergencia, Informa, and Gartner. Where appropriate, data from different sources has been combined to show more complete industry trends. The regular geographic scope of this study consists of the LatAm 20 outlined in the “Geographic scope of this study” section. This report was commissioned by the GSMA and developed independently by A.T. Kearney. The GSMA, their Members, Associate Members and A.T. Kearney are not responsible for the use that might be made of this publication. The views expressed in this publication are the sole responsibility of the authors and do not necessarily reflect the views of the GSMA, their Members or Associate Members. 4 5 Latin American Mobile Observatory 2011 2. Executive Summary Latin America is the world’s third largest mobile market by volume after Asia Pacific and Africa with over 630m connections as of Q4 2011. Growth over the past 4 years has been rapid at 13% per year, driven by increasing accessibility and affordability of mobile services boosted by the improved prosperity of the region and the relative shortage of the fixed line infrastructure. As the market matures in the next 4 years and penetration across the region exceeds 130%, growth is expected to slow to 5% per year. Taking this into account, the region is expected to have three-quarters of a billion connections by 2015. Figure A: Global Mobile Connectionsi Middle East CAGR CAGR USA/Canada 07-11 11-15 7,879 7,558 Europe: Eastern 417 23% 9% 7,164 403 Europe: Western 423 8% 4% 6,673 385 415 Africa 404 621 3% 3% 362 607 Asia Pacific 6,062 389 589 600 17% 6% 590 334 Latin America 5,378 567 367 578 912 298 8% 4% 562 864 4,664 338 539 807 262 511 542 735 4,037 314 524 225 487 644 3,365 292 521 553 177 452 274 508 458 4,125 21% 8% 396 3,922 3,675 478 378 3,372 283 3,004 2,587 2,115 1,726 1,375 686 726 757 781 382 457 508 567 632 13% 5% (10%) (10%) (10%) (10%) (11%) (11%) (11%) (11%) (10%) 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F Source: Wireless Intelligence In 2011 Mobile Broadband has overtaken fixed broadband as the first choice to access the Internet in Latin America. 1,000 Mobile Broadband subscriptions have grown at 127% per year 160% for the last five years and are predicted to continue growing at 50% per year for the next ii five years. By 2015, Latin America is expected to have almost a third of a billion Mobile140% 757 781 Broadband connections. 726 Penetratio n 120% +9% 686 Connections (Million) 126% 632 123% Mobile Broadband services will drive innovation and growth, as voice 120% services begin to reach 567 114% 100% saturation. 106% With clear limitations507 to the growth of fixed-line broadband, mobile technology is set to play a leading457 role in fulfilling 96 %government objectives of bringing high-speed internet 500 80% 87% services to382 Latin Americans. 80% Connections (Millions) 60% Smartphones67% penetration and LTE. Smartphone penetration in Latin America is increasing rapidly and is forecast to more than treble from 9% in 2010 to 33% in 2014. By 2013 40% Latin America is expected to have closed the gap with the global average. Smartphone penetration in Latin America has been tracking the USA’s historical trend, suggesting that20% by 2018 smartphone penetration in Latin America could reach almost 60%. At the end 0 0% of 2011 there2007 were2008 35 LTE commitments,2009 2010 7 LTE201 trials1 completed2012F 2013F and 4 commercial 2014F 2015F LTE networksNotes: in each case,Q4 launched. data has been used Source: Wireless Intelligence, EIU The demand for broadband is clear. With over 210m internet users in Latin America, but only 83m combined fixed and Mobile Broadband subscriptions there is clear pent-up demand for broadband services. Whilst the demand for broadband services is common across the region, there is are large variations between Latin American states in terms of their Mobile Broadband readiness with some countries approaching maturity whilst others are still in a very nascent state of development.