The Latin American market is embracing 4G mobile networks despite the fact that the region has seen lukewarm response to 3G. HSPA is deployed in over 60 networks in 27 countries, but the number of users is only 11 percent of the region’s 560 million subscribers. Virtually all Latin American countries have far lower 3G penetration rates than other markets across the globe that have seen 4G launches.
Compiled by: Information Consulting, LLC
In recent months, as shown in the Table above, several carriers have upgraded their HSPA networks to HSPA+ which is classified by ITU as a 4G technology. These deployments support data rates of 21 Mb/s in a 5MH channel, except for Chile where Entel Movil and Movistar have deployed dual-carrier HSPA+ which uses two channels to double the data rates to 42 Kb/s.
The keenness of the carriers to move to higher speeds stems from their desire to position themselves for the impending wireless data boom. The perception that such a boom is imminent is fueled by the influx of smartphones in the Latin American market, and their falling prices.
HSPA+ is less expensive to deploy and will serve emerging wireless data needs of Latin American carriers for the foreseeable future. These networks can even be upgraded to suppport data rates of up to 84 Mb/s. But mobile carriers are eager to transition to LTE networks which involve a brand new deployment, but offer higher speeds than HSPA+. LTE is capable of supporting speeds of more than 100 Mb/s using scalable bandwidth of 1.4 MHz to 20 MHz.
But there is a snag: carriers at present do not have enough spectrum for LTE deployments. While many countries in the region have allocated the 2.5 GHz spectrum for LTE deployments, few have licensed these frequencies for commercial implementation. Only Columbia has licensed the 2.5 GHz spectrum, allowing UNE-EPM to launch LTE.
Unlike UNE-EPM, Mexico's Telcel is utilizing the 1.7-2.1 gigahertz band for LTE deployment. One of the winners of a spectrum auction for next generation networks, Telcel is currently conducting LTE trials, and plans full-fledged deployments in 2012.
4G networks are a good investment only if carriers are able to generate a critical mass of wireless data subscribers. To do so, the carriers need to be more aggressive in marketing Internet access and come up with creative plans to drive Web surfing. Over 80 percent of the population in Latin America uses prepaid plans. The carriers need to add Web surfing and email messaging to these plans to monetize their high-speed network deployments.
Another area of focus in Latin America needs to be subscriber growth. The region's mobile subscribers roughly match its population of 590 million, but the penetration is not really 100 percent since many users have more than one subscription. In fact, roughly one-third of the region's subscribers do not have a mobile phone. Carriers need to boost subscriber penetration by expanding coverage and offering low-cost plans. Latin American governments will need to get involved as well, offering subsidies to the poor for the purchase of mobile devices.
Note: The statistics in this write-up are for year-end 2010.
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