Competition from Multi-Play Providers Drives Adoption in LatAm Broadband Services
Published on: 10th Apr 2014
Note -- this news article is more than a year old.
Increasing investments in network coverage expansion, coupled with the enhanced political and economic stability in most Latin American countries, is driving the fixed broadband services market in the region. Furthermore, the low level of broadband penetration in some Latin American countries is opening up opportunities for service providers in this space.
New analysis from Frost & Sullivan finds that the market earned revenues of $11.75 billion in 2013 and estimates this to reach $18.40 billion in 2018. The study covers asymmetric digital subscriber line, cable, wireless and fiber-to-the-home (FTTH) technologies. FTTH is emerging as the most promising technology in many countries across Latin America.
"Broadband service providers will be looking to tap these market opportunities optimally through promotional offers as well as by investing in convergent services and integrated infrastructure networks," noted Frost & Sullivan Information & Communication Technologies Senior Consultant Ignacio Perrone. "Competition from triple and quadruple play providers will help to drive adoption and thereby increase the number of broadband lines in service from 52 million in 2013 to 91 million in 2018."
However, the high cost of licenses for concessions, network deployment, international links as well as marketing and sales is hurting the profitability of broadband service providers. The commercial campaigns and low-price strategies are exacerbating the situation and making it difficult for market participants to expand service penetration without compromising the return on investment.
In this scenario, fixed broadband service providers should focus on offering technologies such as FTTH to the most lucrative segments of the market. For instance, households with a bandwidth-intensive profile would be good targets as they will be willing to pay a premium for efficient fixed broadband services.
"Further, traditional telecom companies must attempt to become the sole service provider in households or businesses by providing both connectivity and content services," advised Perrone. "It will also be important to leverage fixed and mobile networks, offer single bills as well as robust customer service, and develop content in-house or through alliances to achieve this objective."