The number of fixed lines for voice and Internet services in Latin America will reach 163.8 million in 2015, an increase of 2.3% over 2014. This represents a broadband penetration rate of 12% and a voice telephony penetration rate of 17% of the population. While the overall number of fixed lines will grow at a CAGR of 2.1%, FTTH/B connections will increase at a CAGR of 34.9% over the next five years. “Growth within fixed communications markets will be mainly driven by the increase in broadband lines,” says Marcelo Kawanami, senior analyst at Pyramid Research. By year-end 2020, Pyramid Research expects Latin America to have 181.9 million fixed broadband lines.
Fiber-optics growing fast, but xDSL remains dominant
The Pyramid Research Forecast finds that fiber connections will account for 6.9% of broadband lines (5.1 million lines) by year-end 2015, up from 5.1% in 2014. While this indicates rapid growth, xDSL remains the broadband technology that is most widely used, representing 57.5% of the total Latin American broadband lines in 2014. “Despite the effort from operators to leverage FTTH/B services, prices charged for broadband services through fiber technology remain high, and service coverage is still restricted to selected areas within major cities,” says Kawanami. Pyramid Research expects xDSL to remain the dominant broadband technology in Latin America in the next few years, still holding over 40% of all broadband connections at the end of 2020.
Internet services revenue the motor for growth
“In all major Latin American countries, governments have developed National Broadband Plans to foster the expansion of broadband in remote locations which have not been historically served due to the high cost of network deployment and uncertain revenue potential,” says Kawanami. Over the next five years, traditional voice services carried through circuit-switched networks will decline by a CAGR of 6.3% in Latin America, despite the increased adoption of VoIP services. On the other hand, Internet service revenue will expand at a CAGR of 6% in the region between 2015 and 2020. Pyramid Research expects the Latin American fixed communications service market to be worth US$44.8 billion in 2015.
