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This report provides a comprehensive overview of trends and developments in El Salvador’s telecommunications market. With its long-established liberalisation, El Salvador is an attractive market for telecom investors. The report analyses the mobile, internet, broadband, digital TV and converging media sectors. Subjects include:
- Market and industry analyses, trends and developments;
- Facts, figures and statistics;
- Industry and regulatory issues;
- Major players, revenues, subscribers, ARPU;
- Internet, IPTV;
- Mobile voice and data markets;
- Broadband (FttH, DSL, cable TV, wireless);
- Convergence and Digital Media.
Regulator’s market data updates; multi-spectrum auction faces indefinite delays; telcos’ financial and operating data to end-2013; market developments to mid-2014.
América Móvil (Claro), Millicent International (Tigo), Telefónica (Movistar), Red, GCA Telecom, Salnet, Amnet, Sky TV.
Steady rise in El Salvador’s mobile broadband customer base
Relatively densely populated, El Salvador is the smallest country in Central America. Economic prosperity has been stymied by income inequality, poor infrastructure and inadequate social capital.
Despite these difficulties, the telecom sector has been one of the more successful in the economy. This is particularly true of the mobile telephony and data sectors, which are emerging as the country’s preferred telecom services given the poor state of fixed-line infrastructure in many areas. The use of text messaging and multimedia has gained traction as an alternative for voice services, and there is a clear trend towards services supported by 3G networks as these are expanded by network operators.
El Salvador’s fixed-line teledensity is substantially lower than the Latin American and Caribbean average. However, there has been a significant drop in the number of fixed lines since 2010, largely due to the substitution for mobile-only alternatives.
Mobile penetration is remarkably high considering El Salvador’s economic indicators, being about 35% higher than average for Latin America and the Caribbean. Of the estimated total number of telephones in the country, 11% are fixed and 91% are mobile.
El Salvador’s telecom legislation is one of the more liberal in Latin America, encouraging competition in most aspects of the telecoms sector and permitting foreign investment in all areas. However, there are no regulations as yet which promote wholesale broadband, and thus the ADSL market remains a virtual monopoly for Claro. The only effective cross-platform competition in the broadband market comes from the few cable operators.
Although many companies launched services when the telecom sector was liberalised, the market has been undergoing a gradual process of consolidation, leaving a few dominant multinational operators (notably Millicom’s Tigo, América Móvil’s Claro, and Telefónica’s Movistar), which have managed to expand into almost all sectors through a process of convergence.
The mobile market is served by five operators: Tigo, Movistar, Claro, Digicel, and Intelfon.
The fastest growing sectors in coming years will continue to be pay TV and broadband (both fixed and mobile). The outlook is especially promising for mobile broadband, which could help to bolster the slipping mobile ARPU figures in the medium term. The longer-term prospect is also promising, particularly in the mobile sector where competition between Claro, Tigo, and Telefónica will oblige the operators to diversify services and reduce prices.
- The main altnet Tigo has expanded from its original mobile telephony business, incorporating cable TV and other IP services through its acquisition of Amnet. In 2012 Amnet purchased Telefónica Multiservicios’s fixed telephony and internet clients.
- Movistar’s services, including fixed-line and fixed-wireless services, mobile services, cable broadband, and cable TV, have been unified under a single brand name.
- The regulator has confirmed plans to complete ASO by 2018.
- The auction for spectrum in the 1700MHz and 2100MHz bands was suspended indefinitely at the end of 2013 over concerns that the tender process disadvantaged new entrants, and so would not result in greater market competition.
- In early 2014 the Central Reserve Bank finalised a regulatory framework for mobile financial services, enabling a range of m-payment services via subsidiary companies set up by MNOs. It later proposed a cap on the value of mobile transactions.
- Tigo has launched its satellite TV service in El Salvador, following a similar launch in Bolivia, and has rebranded its cable, broadband and pay-TV services as ‘Tigo Star’.