BUENOS AIRES, Argentina, Feb. 18, 2013 /PRNewswire/ -- Telecom operators' investments in network coverage expansion, along with intense domestic competition resulting in lower prices and bundled service offerings, have lent momentum to the broadband services market in Latin America. The stable political and economic environment, as well as the low penetration of broadband signifies added potential for broadband service adoption in the region.
New analysis from Frost & Sullivan ( http://www.ipcommunications.frost.com), Latin American Broadband Services Markets, finds that the market earned revenues of more than $11.30 billion in 2012 and estimates this to reach $18.24 billion in 2017.
"Intense competition has compelled telecom operators to deploy integrated infrastructure networks and offer convergent services at competitive prices, thereby popularizing broadband services," said Frost & Sullivan ICT Industry Analyst Gina Sanchez. ''For instance, fiber-to-the-home (FTTH) is already a key component in the operators' strategy, it will become in the next few years indispensable as the integration of broadband and interactive pay-TV (IPTV) will be among the top priorities.''The development of value-added applications including IPTV, voice over Internet protocol, Web 2.0-based applications, and the availability of global as well as local content on the Internet, have changed users' behavior. This digitalized culture has enhanced awareness on the benefits of broadband, boosting connection and bandwidth demand. However, several operators, especially alternative service providers, are unable to fully meet this growing demand due to limited infrastructure access and the high costs of broadband rollouts. Additionally, the lack of quick and substantial returns, particularly in rural areas, deters some operators from investing further, curbing market growth in Latin America. The low penetration of personal computers (PC) in remote regions and among the low-income group in Latin America also limits market revenues. Therefore, internet service providers (ISPs) are providing PCs through financial loans, price reductions, and ensuring their availability in popular retail stores to grant accessibility to the lower strata. "With the high-income segment reaching saturation, ISPs need to tap the potential in the lower-income classes through suitable pricing strategies," noted Sanchez. "Employing cost-efficient, faster technologies rather than conventional digital subscriber line and cable modem will enable broadband ISPs to ensure last-mile broadband access, including FTTH, 3G, 4G and LTE."