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BMI View: The Latin American telecoms market is developing at three different speeds in accordance with economic health and the availability of connectivity. Broadly, 3G/4G migration and wireline broadband expansion will be overall growth driver s within the region. However, impediments to this growth scenario are an a geing wireline infrastructure, the lack of coordinated regulatory development and economic challenges arising from the fall in oil and commodity prices . Another impediment is a natural slowdown in the economic gr owth cycles of key markets such as Brazil and Argentina .
|3G/4G And Wireline Broadband Key Drivers Of Regional Growth|
|Latin America Telecoms Forecasts|
|e/f = BMI estimate/forecast. Source: BMI|
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The Caribbean had the highest mobile growth rate in Latin America at 6% y-o-y in 2015. This was driven by a relatively low mobile penetration rate of 94%, compared to 112% for the region.
Central America had the highest 3G/4G 2015 y-o-y subscriber growth at 39%. This was driven by increased data consumption on the back of new service launches. In 2015, America Movil and Millicom launched MFS platforms in Mexico and Nicaragua.
Fixed-line subscriptions continue to decline in key regional markets such as Brazil and Colombia, despite operators such as Vivo and Claro offering converged services. We forecast fixed to mobile substitution to remain a drag on fixed-line growth through to 2020.
In 2015, y-o-y growth in regional broadband subscriptions reached 8.1%, compared to a -0.3% in the fixed-line segment. We expect increased uptake in broadband services to boost the overall wireline segment. We forecast strong growth in wireline broadband connections, though dedicated mobile data demand may shrink as consumers favour smartphone connections.