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Mobile Subscriptions in the Latin American Market Push a Billion by 2020

July 16, 2015

Mobile devices in general are changing large portions of the world as we know it. This is a phenomenon not limited to North America, meanwhile, as Europe, Asia, and much of the rest of the world gets in as well. A new report from Pyramid Research, meanwhile, details that Latin America is hardly immune to this growth pattern, and the demand for mobile subscriptions and mobile data is set for some pronounced leaps forward.

Latin American mobile subscriptions will number 757.2 million total by the end of 2015, or about 10 percent of the global total, according to the study. That's said to be a mobile penetration rate of 122 percent, but it won't stop there. Over the next five years, the market will continue to grow at a compound annual growth rate (CAGR) of 3.2 percent, reaching 885 million by the end of 2020 and upping the penetration rate to fully 136 percent.

That may sound crazy, but the reports suggest that the biggest growth driver will actually be new business, not people looking for a second device. The Pyramid Research study notes that growth will come mainly from operators making pushes into underserved and unserved areas, further spurred on by new government policies that are friendly to competition, opening the door to new operators as well as mobile virtual network operators (MVNOs). Further pushing the growth on will be the rise of machine to machine (M2M) communications systems as well as Internet of Things (IoT) applications.

Pyramid Research's study carried on from there, though, noting that mobile data was quickly becoming a major part of the mobile ecosystem. Mobile data will by itself account for nearly half—40 percent—of all revenue by the end of this year for the sector, and that's up from 22 percent in 2011. Mobile data is set to continue expanding at a CAGR of 10 percent, putting it on a track to, by 2020, account for over 60 percent of mobile service revenue. However, voice revenues are actually expected to drop in the region over the entire same period, falling at a CAGR of 6.5 percent. That, of course, is bad news for anyone who hasn't put plenty of investment in mobile data provision.

Image via Shutterstock

Indeed, the situation in Latin America looks like the situation in a great many places; voice and text service is down, mobile data is exploding. Given how many systems call on data, from the M2M/IoT growth to the increasing adoption of voice over Internet protocol (VoIP) service, the idea that data could be a universal connection method makes sense. It also means a clear-cut opportunity for mobile providers; having more mobile data infrastructure in place will likely be rewarded with greater customer interest, better customer loyalty, and improved revenues. Where people want data more than anything else, being a data provider can be a great thing.

The opportunity is laid out before mobile operators regardless of region, but in Latin America, particularly so. The rise of mobile data is fueling a lot of change, and providing that data will likely prove to be a scenario with some great upside potential to it.

Edited by Dominick Sorrentino

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