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Summary

El Salvador, which has been the slowest in the region in terms of mobile technology adoption, finally joined the rest of Central America in offering LTE. In the last quarter of 2016, Movistar and Tigo both launched LTE services. Digicel is set to launch LTE by end-2017, to become the third LTE operator in El Salvador. With the long-delayed auction of 140MHz of spectrum also expected in 2017, the LTE scenario is looking positive for El Salvador.

LTE is finally picking up pace in Central America, but has a lot of ground to cover

El Salvador has finally gotten its first LTE networks, joining its neighbors in boosting the pace of LTE adoption in Central America. As of May 2017, 16 LTE networks had been launched in Central America, with a few more launches expected by end-2017. LTE subscription count in Central America stood at 1.56 million at end-4Q16, equating to a share of 2.72% of mobile subscriptions, way below the regional average of 17.09% for Latin America. But the positive news is that it has finally picked up pace, and all countries in Central America saw quarterly growth of more than 100% in 4Q16, except for El Salvador, which launched LTE only in 4Q16. LTE is now the fastest-growing technology in Central America, but even so, it is not set to surpass WCDMA in terms of subscription count until the distant future.

Among Central American countries, LTE was first launched in Costa Rica. This occurred in mid-2013, and Costa Rica is currently the most developed market, with all three operators offering LTE services. Ovum expects that by end-2022, 36% of all mobile connections in Costa Rica will be LTE.

Belize, which saw its first 4G network launch in 2014, had around 8,000 LTE subscriptions at end-4Q16, equivalent to just 1.9% of total subscriptions. Ovum expects that with only two operators, Belize will see 4G penetration of 36.8% at end-2022.

Guatemala had around 420,000 LTE subscriptions at end-2016, a 2.35% share of mobile subscriptions, which Ovum expects to reach to 23.5% at end-2022. Guatemala has four major operators, three of which offer LTE networks, but the country’s adoption rate has been slow, given that its first LTE network was launched way back in 4Q14 by Movistar.

Honduras was the second country in the region to get 4G, when Tigo launched its LTE network in December 2014. The country has, however, been slow in terms of LTE adoption, and only 3.13% of total subscriptions are on LTE networks.

Recently, in some parts of the world there has been much focus on 5G, but Central American operators are focused on driving up LTE usage; 5G can wait a little longer. LTE has the potential to bring a turnaround to the telecoms scene in Central America. A common problem faced by almost all Central American countries is lack of a well-developed fixed broadband network to meet demand for high-speed services. LTE-based mobile broadband services could be the solution. And with LTE having seen such low initial adoption rates, it’s high time that the regulators start pushing for more LTE coverage and create an environment that is conducive to the growth of LTE and mobile broadband.

More spectrum is needed if mobile broadband take-up is to grow, and regulators can start by speeding up the auction process. Delays in spectrum auctioning is another reason for the slow growth of the Central American mobile market. Policies that facilitate infrastructure deployment would also help widen LTE coverage, extending it to even the remotest parts of a country.

Appendix

Further reading

Mobile Subscription and Revenue Forecast: 2017–22, TE0009-001647 (May 2017)

LTE Forecasts by Spectrum: 2016–21, TE0006-001382 (April 2017)

Central America Update: June 2016,TE0001-001049 (October 2016)

Author

Vipul Babbar, Research Analyst, North and South America

vipul.babbar@ovum.com

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