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A Look at Mobile Growth in Latin America

October 19, 2015

While most bets for booming futures are in Asia and Africa, Latin America shouldn't be left out of the conversation.  A 2014 GSMA report for the region expects the total number of cell phone users to grow from 320 million in 2013 up to 390 million by 2020.  There's plenty of upside, according to the trade group, with a large surge in cellular infrastructure expected over the next five year.




Driving factors for growth in the Latin America region include connecting the unconnected, mobile banking, and machine-to-machine (M2M) growth -- what we're now starting to call "The Internet of Things" (IoT).  Consumers currently without broadband in emerging markets are expected to get to the Internet via a mobile device, be it in Brazil, Angola, or India, so there's no surprise there.

Mobile banking is expected to be a vital and necessary service, especially when aiding previously unserved consumers that don't have a bank account or convenient access to a bank. At the time of the report  in June 2014, there were 36 live banking services in operation, with another 19 planned. 

GSMA didn't provide much detail on machine to machine growth and applications, but did say it expected compound annual growth rate (CAGR) of M2M applications of 25 percent between now and 2020. I'd expect to see a lot of remote monitoring applications in the mix, especially when it comes to shipping and in infrastructure monitoring.

One of the biggest shifts in the cellular industry taking place is moving from existing 2G networks into 3G and 4G networks, with LTE making up the biggest leap in growth as it starts to roll out in earnest over the next five years.  About 154 smart phone connections were active at the end of 2013. By 2020, 605 million smart phone connections are expected to be in operation with a CAGR of 66 percent by 2018 -- three years from now.

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Annual investment in the Latin America region was $22 billion at the end of 2013. It is expected to ramp to $30 billion by 2020, with a total of $193 billion spent between 2013 and 2020. That's a lot of upgraded wireless infrastructure and cell towers, as well as great greenfield opportunities for new apps and services on Latin America LTE networks.

Brazil and Mexico are the largest markets and those with the greatest potential. 

 Brazil is the fifth-largest market in the world in terms of subscribers and expected to overtake Japan to become the fourth-largest by the end of this year. Numerous network upgrades are underway in Rio de Janeiro to support the 2016 Summer Olympics.

This year Mexico is on track to reach 100 million mobile broadband connections by 2020, with 50 million connections reported at the end of the first quarter of 2015.  LTE 4G coverage was at 30 percent of the population at the end of 1Q 2015 with 4G coverage expected to cover 85 percent of the population in 5 years.

Explosive growth in Latin America mobile translates to big opportunities for real time communication (RTC) as new apps and services are brought on line to take advantage of new capacity. Brazil in particular is likely to be a hotbed of activity over the next year as the world's news establishments gear up to cover the Olympics.  With 300 events and 10,000 participating athletes across 28 sports, media outlets will be looking for new and better ways to keep fans informed and engaged.  RTC provides media outlets with the ability to provide live coverage and interviews using mobile devices without the overhead typically associated with a large video crew.  Lesser sports will be able to get more in-depth coverage while smaller countries will be able to cover their athletes in a more intimate fashion.




Edited by Stefania Viscusi

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