4G to Become the Dominant Mobile Technology in Latin America by the End of the Year, Finds New GSMA Report
4G is set to overtake 3G as the prevailing technology in Latin America by the end of 2018, according to a new GSMA report published at the Mobile 360 Series – Latin America event in Buenos Aires this week. The study – ‘The Mobile Economy: Latin America and the Caribbean 2018’ – outlines that 4G networks will account for the largest share of the region’s connections (38 per cent) by the end of the year, up from just 8 per cent three years earlier.
With 4G also reaching critical mass in terms of coverage (82 per cent of the population), operators will be investing substantially in network upgrades to support accelerating smartphone and data use, setting the path towards the 5G era. 4G is forecast to account for almost two-thirds of total connections by 2025, by which point the first 5G networks in the region will have been deployed in major markets such as Brazil and Mexico, accounting for 8 per cent of total connections in the region.
“Consumers across Latin America are now rapidly migrating to 4G services, driven by video consumption and social media usage – and traffic growth is requiring significant network investment to be able to support new and existing digital services,” said Michael O’Hara, Chief Marketing Officer at the GSMA. “We expect mobile operators in the region to invest almost $50 billion (capex) between 2018 and 2020 on network upgrades prior to the move to 5G. However, future success will depend heavily on a flexible policy environment that will encourage continued operator investment in networks, and in turn, deliver the benefits of high-quality mobile connectivity to end users.”
Subscriptions Grow, but Policy Incentives Are Still Needed to Bridge the Digital Divide
More than two-thirds of the region’s population are now connected to a mobile network. By mid-2018, there were 442 million unique mobile subscribers1 across Latin America and the Caribbean (68 per cent of the population), a figure forecast to grow to 517 million (74 per cent) by 2025. However, there is a wide variation in subscriber penetration levels; a number of countries – such as Argentina, Chile and Uruguay – are approaching full penetration, while others, including Guatemala, Honduras and Nicaragua, still have plenty of headroom for future subscriber growth.
“Today around half of the region’s population are connected to the mobile internet – this is set to grow to 65 per cent by 2025, but it means there is still to work to do to ensure millions of citizens are digitally included and benefiting from the social and economic opportunities of getting online,” added O’Hara. “It is therefore vital that the mobile industry is able to work in tandem with governments and other stakeholders to address the barriers to mobile internet adoption, such as excessive tax burdens and fees that negatively impact affordability and access.”
A Major Contribution to the Economy
Last year, mobile technologies and services generated 5 per cent of GDP in Latin America, a contribution that amounted to $280 billion of economic value added2. This contribution is forecast to rise to $330 billion (5.2 per cent of GDP) by 2022. The region’s mobile ecosystem also supported around 1.6 million jobs in 2017 (directly and indirectly) and made a substantial contribution to the funding of the public sector, with approximately $36 billion raised in 2017 via general taxation and sector specific levies.
Mobile Driving Innovation and Delivering Social Good
Latin America’s mobile ecosystem is supporting a wave of innovation across the region, driven by growth in new technologies, services and use cases. For example, mobile operators are making a significant contribution to the Internet of Things (IoT) market; the number of IoT connections in the region is set to triple between 2017 and 2025, reaching 1.3 billion, transforming both the consumer and industrial sectors.
The report cites examples of where mobile-based innovation is having a positive impact, contributing to the achievement of the United Nations’ Sustainable Development Goals (SDGs). In Cordoba, Argentina, Claro built a partnership to develop an IoT solution that connects machines and farm animals with sensors, allowing product traceability. In La Guajira, Colombia, Telefoìnica and the UN Food and Agriculture Organization (FAO) are using mobile big data to measure how climate change contributes to the internal displacement and movement of citizens. This initiative, part of the GSMA’s Big Data for Social Good (BD4SG) programme, aims to provide governments and organisations with the insights needed to make more informed decisions and targeted policy interventions.
‘The Mobile Economy: Latin America and the Caribbean 2018’ report is authored by GSMA Intelligence, the research arm of the GSMA. To access the full report and related infographics, please visit: www.gsma.com/mobileeconomy/latam.
About the GSMA
The GSMA represents the interests of mobile operators worldwide, uniting more than 750 operators with over 350 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces industry-leading events such as Mobile World Congress, Mobile World Congress Shanghai, Mobile World Congress Americas and the Mobile 360 Series of conferences.
GSMA Latin America represents the mobile industry in the region. For more information in English, Spanish and Portuguese, please visit www.gsmala.com. Follow GSMA Latin America on Twitter @GSMALatam and Linkedin www.linkedin.com/showcase/gsmalatam
1 A unique mobile subscriber represents an individual that can account for multiple SIM connections. There were 674 million connections (excluding IoT) in Latin America at the end of 2017, forecast to rise to 775 million by 2025.
2 GDP contribution includes direct mobile operator contribution (0.85% of GDP); related industries (0.4%); indirect contribution (0.4%); and productivity improvements (3.4%).
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