Mobile broadband adoption is slow in Central America: GSMA

Countries in Central America — Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama — are behind in deployment and adoption of mobile broadband, according to a GSMA report.4G penetration in central America

The above chart indicates the mobile Internet penetration and 4G connection penetration in Central America.

The report reveals that 4G networks are available to 35 percent of the population in Central America. 4G accounts for around 5 percent of all mobile connections in the region, a sixth of that seen in South America.

Sebastian Cabello, head of Latin America, GSMA, said: “There is a need for governments to act in reforming policies that will encourage investment and innovation and enable operators to deliver high-quality mobile broadband services to consumers and businesses.”

The below chart indicates Capex as a proportion of revenue in Central and Latin America regions.
Telecom Capex in central America
The GSMA report shows that those markets with fewer operators experience better levels of investment and innovation, higher speeds and a better quality of service. Regulatory barriers in Panama prohibit mergers between mobile operators. El Salvador disregarded the role of efficiencies during mergers.

The countries surveyed have 100 MHz assigned for 4G services, compared to an average of 163 MHz in Latin America. The region has 21 percent of the required spectrum estimated by the International Telecommunication Union for the effective provision of mobile services. El Salvador, Guatemala and Panama are falling short in spectrum.

The below chart shows the comparison between 4G and mobile Internet penetration in Central and Latin America.
Mobile internet in central and north America
The report reveals that certain legacy retail and wholesale regulations are limiting operators’ ability to compete and innovate. El Salvador, Honduras and Nicaragua price caps and Costa Rica, Nicaragua and Panama have constraints on price discrimination.

Price caps could discourage investment, while price discrimination barriers could reduce the consumption of mobile services.

The research also found that direct regulations on network quality are also in place in Costa Rica, Honduras and Panama, a factor that can be counterproductive to improving network quality longer term.

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