American telecom operator AT&T on Tuesday confirmed its new investment related interests in the Latin America mobile market.
AT&T Chief Strategy Officer John Stankey said Mexico is poised for investment. He sees a lot of options in Latin America. However, he did not talk about any interest in America Movil telecom assets in Mexico.
A Bloomberg report said America Movil, the top Latin America telecom operator, is planning to sell assets to invite a new competitor into the mobile market. It has already approached AT&T, China Mobile, Bell Canada, SoftBank, etc. However, formal negotiations are yet to kick off.
AT&T has also looked at Europe for potential investments, Stankey said.
There were reports that AT&T was looking for acquiring Vodafone as well.
Stankey said AT&T’s prior experience in Latin America and a shared border with Mexico and reforms in the region made the option particularly attractive.
AT&T wants Latin America and Mexico for strong revenue streams
There are big opportunities for AT&T. All governments have introduced some form of liberalization, especially in the value-added and mobile markets. However, Guyana, Paraguay and Uruguay have monopoly in fixed line telecom services.
Despite 18 percent teledensity against Western European countries’ teledensity of between 40 percent and 60 percent, fixed-lines services have grown little since 2001 in Latin America, said a report in MarketWatch.
Fixed broadband penetration in the region was 9.2 percent per capita in 2013, slightly below the world average of 9.8 percent but ahead of other developing regions.
There are some hurdles in the Latin American broadband market.
Weak competition, insufficient bandwidth, inadequate fixed-line infrastructure, low PC penetration, poverty, and unequal income distribution are some of the hurdles.
Fibre-to-the-Premise (FttP) is becoming widely available throughout the region, but subscription fees are extremely high. The 2016 Olympics will be promising for the future of FttP in Brazil and Uruguay.
Latin America reached an estimated 115 percent mobile penetration in 2013 against a global rate of around 96 percent. About 80 percent of mobile subscribers are on prepaid plans.
The region has 103 HSPA 3G networks operating in 42 countries, while another 9 networks will be on shortly.
18 countries have deployed 38 4G networks, while another 42 operators are planning LTE launches. The region has passed the 2 million 4G LTE subscriber milestone.
About three quarters of Latin America’s LTE subscribers are in Brazil thanks to Capex plans for 2014 FIFA cup and the 2016 Olympic Games.
In addition to the growing Facebook subscriber base, Smartphone penetration across the region is escalating. Smartphone penetration is expected to reach 44 percent by 2017 from 20 percent in 2013.
Baburajan K
[email protected]
