Latin America telecoms market: interim forecast update LATIN AMERICA TELECOMS MARKET: INTERIM FORECAST UPDATE

Transcription

1 REGIONAL FORECAST REPORT LATIN AMERICA TELECOMS MARKET: INTERIM FORECAST UPDATE ROMAN ORVISKY

2 About this report This report provides: an interim update of our 5-year forecast (previously published in June 2015) of more than 100 mobile and fixed KPIs for Latin America (LATAM) as a whole and for seven key countries. 1 an explanation of the significant changes in this edition, compared with our previous forecasts Revisions to our previous forecasts occurred mainly for the following reasons: market developments based on recent market events and latest reported operator and regulator data (3Q 2015) changes to the competitive and regulatory environment changes to the macroeconomic outlook and exchange rates used to derive revenue in constant US dollars changes to historical data because of newly available information. For the complete data set, see the accompanying Excel file at Geographical Regions modelled: Latin America (LATAM) Countries modelled individually Argentina Brazil Chile Colombia Mexico Peru Venezuela REPORT COVERAGE Key performance indicators Connections Mobile Handset, mobile broadband 1, M2M 2 Prepaid, contract 2G, 3G, 4G Smartphone, non-smartphone Fixed Voice, broadband, IPTV, dial-up Narrowband voice, VoBB DSL, FTTH/B, cable, BFWA, other Voice traffic Fixed and mobile Outgoing minutes, MoU Revenue Mobile Service 3, retail Prepaid, contract Handset, mobile broadband 1, M2M 2 Handset voice, messaging, data Fixed Service 3, retail Voice, broadband, IPTV, dial-up, BNS DSL, FTTH/B, cable, BFWA, other ARPU Mobile: SIMs, handset Prepaid, contract Handset voice, data 1 Includes USB modem, and mid- and large-screen, but not handset-based data. 1 For more information, see Analysys Mason s Latin America telecoms market: trends and forecasts Available at 2 M2M connections and revenue figures include mobile services only. 3 Service revenue is the sum of retail and wholesale revenue. 2

3 Contents 5. Executive summary and regional forecasts 6. Revenue growth has been revised down as the macroeconomic outlook is more negative and stringent regulatory measures are coming into effect 7. Fixed and mobile internet take-up will continue to drive revenue growth in the region 8. Smartphones and LTE: The LTE user base in the region will reach 156 million in 2020, with growing opportunities for data monetisation 9. Key regional changes since our previous forecast 10. Forecast revision: The stagnating economy of Brazil, the region s largest market, is the main driver of a more negative outlook 11. Individual country forecasts 12. Argentina: Fixed broadband adoption will slow down; revenue growth will be driven by accelerating currency depreciation 13. Brazil: The number of prepaid disconnections, driven by MTR cuts, has led us to revise our forecast down for mobile user base growth 14. Chile: Fixed broadband revenue has been revised up due to user base growth, expected FTTH take-up and ARPU recalibration 15. Colombia: Revenue growth will be hampered by a slowdown in handset user base growth 16. Mexico: The smartphone forecast has been revised up due to new data, and cable operators are driving growth in fixed broadband 17. Peru: Telefónica s success in promoting data-focused plans has driven up the smartphone share of handsets 18. Venezuela: Revenue calculated in US dollars will take a downturn because the country is on the verge of an economic collapse 19. About the authors and Analysys Mason 20. About the author 21. About Analysys Mason 22. Research from Analysys Mason 23. Consulting from Analysys Mason 3

4 List of figures Figure 1: Telecoms retail revenue by service type and total service revenue (retail and wholesale), Latin America, Figure 2: Telecoms retail revenue growth by service type, Latin America, Figure 3: Smartphones as a percentage of handsets, and LTE s share of total connections (excluding M2M), Latin America, 2014 and 2020 Figure 4: Summary of major changes compared with our previous forecast for Latin America Figure 5: Telecoms retail revenue by service type and total service revenue, previous and new forecasts, Latin America, 2014 and 2020 Figure 6: Telecoms retail revenue by service type, total service revenue and growth rates, Latin America, Figure 7: Connections by type, and growth rates, Latin America, Figure 8: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Argentina, Figure 9: Summary of major changes compared with our previous forecast, Argentina Figure 10: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Brazil, Figure 11: Summary of major changes compared with our previous forecast, Brazil Figure 12: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Chile, Figure 13: Summary of major changes compared with our previous forecast, Chile Figure 14: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Colombia, Figure 15: Summary of major changes compared with our previous forecast, Colombia Figure 16: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Mexico, Figure 17: Summary of major changes compared with our previous forecast, Mexico Figure 18: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Peru, Figure 19: Summary of major changes compared with our previous forecast, Peru Figure 20: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Venezuela, Figure 21: Summary of major changes compared with our previous forecast, Venezuela 4

5 Mobile handset data Fixed broadband and IPTV Business network services Mobile M2M Mobile broadband Mobile messaging Fixed voice and narrowband Mobile voice Total retail Revenue growth (USD billion) Latin America telecoms market: interim forecast update Fixed and mobile internet take-up will continue to drive revenue growth in the region Handset data and fixed broadband services will account for over 85% of LATAM s revenue growth between 2014 and Due to high pay-tv penetration in the region, consumers in LATAM countries are prime targets for the upselling of fixed broadband. Cable operators, particularly in Argentina and Mexico, have been able to take advantage of a regulatory environment that is unwelcoming towards IPTV and, as a result, have experienced stronger growth in the number of fixed broadband users than their DSL-based competitors. Meanwhile, coverage improvements will drive mobile data usage. We expect coverage to have a particularly significant impact in Mexico, where operators will be able to utilise both the national 700MHz wholesale network and the spectrum purchased in the February 2016 auction. Competition is intensifying following numerous mergers, acquisitions and new entries. The new owners of Nextel s operations in the region AT&T (Mexico), Entel (Peru), Grupo Clarin (Argentina; note that final regulator approval is still pending), and private investment fund Novator (Chile) will likely put the previously B2B-focused operator in a more competitive market position Nextel s Chilean successor WOM nearly quadrupled its subscriber base between 1Q 2015 and 3Q New entrants, led by mobile virtual network operator (MVNO) Virgin Mobile in several countries including Brazil and Mexico, as well as Viettel-backed Bitel in Peru, are further increasing low-end price competition. Figure 2: Telecoms retail revenue growth by service type, Latin America, Source: Analysys Mason 7

6 Revenue (MXN billion) Latin America telecoms market: interim forecast update Mexico: The smartphone forecast has been revised up due to new data, and cable operators are driving growth in fixed broadband Figure 16: Telecoms retail revenue by service type, and total service revenue (retail and wholesale), new and previous forecasts, Mexico, Figure 17: Summary of major changes compared with our previous forecast, Mexico Change KPI and drivers Retail revenue: Service revenue: (Retail and wholesale) Source: Analysys Mason Mobile voice Mobile broadband Mobile messaging Mobile M2M Fixed voice and narrowband Business network services New forecast Mobile handset data Fixed broadband and IPTV Previous forecast 23% 6% 16% Smartphones in 2020 We have revised the smartphone forecast based on new sales data, with the country s smartphone share of handsets reaching 45% in September We expect 4G availability to drive smartphone adoption in the near future, supported by increased investment from AT&T, which holds 38% of all mobile spectrum in Mexico following the February 2016 auction. Fixed broadband connections in 2020 After a significant drop in 2014 caused by an activity adjustment in América Móvil s subscriber reporting, the broadband market grew again in 2015, mainly as a result of cable operators strong performance. Megacable achieved the most substantial growth, gaining users during the first 9 months of Fixed voice revenue in 2020 We now expect fixed voice revenue to reach MXP42 billion in 2020, as the elimination of national long distance charges had a significant effect on América Móvil the market leader reported that fixed voice revenue dropped by over 19% year-on-year in 2Q Source: Analysys Mason 16

7 CONTENTS EXECUTIVE SUMMARY AND REGIONAL FORECASTS INDIVIDUAL COUNTRY FORECASTS ABOUT THE AUTHOR AND ANALYSYS MASON 19

8 About the author Roman Orvisky (Analyst) is a member of the regional markets research team in London, contributing to the Telecoms Market Matrix, European Core Forecasts, European Country Reports and Global Telecoms Forecasts programmes. Prior to joining Analysys Mason in November 2014, he worked in the Transaction Services department of the Royal Bank of Scotland in a customer experience internship role. During his studies, Roman focused on consumer behaviour in an online context, and has experience in churn modelling in the telecoms sector, social network analysis and browsing data analysis. Roman holds a Bachelor s degree in business from Durham University, and an MSc in marketing research from the Tilburg University School of Economics and Management. 20

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