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Network Expansion Enable Operators to Stay Afloat in the Intensely Competitive Broadband Services Market Finds Frost & Sullivan - Government Incentives Vital for Broadband Service Providers to Crack into the Low-income Segment
Network Expansion Enable Operators to Stay Afloat in the Intensely Competitive Broadband Services Market Finds Frost & Sullivan

 

NewswireToday - /newswire/ - São Paulo, Brazil, 2011/05/09 - Government Incentives Vital for Broadband Service Providers to Crack into the Low-income Segment.

   
 
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Significant investments in network coverage and infrastructure, high-speed connectivity, and reduced prices for the most popular broadband services will keep market competitive and thereby, innovative. Harnessing the potential of converged services will give the $9.16 billion broadband services market in Latin America a huge push into the next level and guarantee return on investment (ROI).

New analysis from Frost & Sullivan (ipcommunications.frost.com), Latin American Broadband Services Markets 2010, finds that the market earned revenues of $7.7 billion in 2009 and estimates this to reach $19.3 billion in 2015, mainly driven by the expansion in network coverage and the increase in competition.

Following considerable price reductions, Mexico emerged as a country with one of the lowest broadband prices in the world. Consequently, it had the largest percentage rise in household penetration in the region - from 21.8 percent in 2008 to 28.0 percent in 2009. This competitive environment will set the stage for strong sales promotions and bundled offerings, which, in turn, will increase the uptake of broadband service.

The majority of the broadband accesses in Latin America, such as asymmetric digital subscriber line (ADSL) connections and telcos, are constantly deploying networks to amplify coverage and increase service quality.

"Fiber networks and government subsidies to stimulate broadband penetration in low-income segments will attract more participants to the market," says Frost & Sullivan Industry Manager José Roberto Mavignier. "As broadband services markets in Latin America are expected to grow faster than other telecom services such as fixed and mobile telephony, operators are channeling investments toward network expansion and new technologies, opening a new stage in the competition."

However, due to the poor PC penetration among the low-income groups and the challenges in demonstrating an ROI from broadband infrastructure, service providers are heavily dependent on the government to stimulate the adoption of Internet-enabled equipment such as PCs and notebooks. They will be seeking lower taxes for broadband services and subsidies to build network infrastructure and extend broadband coverage to remote locations.

"Investments in network capacity and new technologies enable broadband operators to offset the lack of government incentives to some extent, and provide novel and converged services that help to retain high-income clients," notes Mavignier.

Nevertheless, investments in fiber networks and a broader range of plans are fostering an environment where participants are hard pressed to generate substantial revenues and introduce services. In such a scenario, market consolidations to enable the provision of integrated services are becoming the order of the day. A case in point is the merger of America Movil’s regional operations with its fixed unit Telmex, as well as Telefonica with its mobile operation, Movistar.

If you are interested in more information on this study, please send an e-mail with your contact details to Tatiana Brull at tatiana.brull[.]frost.com.

Latin American Broadband Services Markets 2010 is part of the Communications Services Growth Partnership Services program, which also includes research in the following markets: Latin American Mobile Services Markets Outlook, Latin American Pay TV Services Markets, and Latin American Datacommunications Services Markets. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents.

Latin American Broadband Services Markets 2010 / N88C

 
 
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Network Expansion Enable Operators to Stay Afloat in the Intensely Competitive Broadband Services Market Finds Frost & Sullivan

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Publisher Contact: Tatiana Brull 
+55 11 3065-8445 tatiana.brull[.]frost.com
 
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