Overview

With almost 150 million new mobile internet subscribers by 2020, up 50% from 2015, the Latin America and Caribbean mobile ecosystem is creating new opportunities for growth and innovation, and a flourishing start-up environment.

INDUSTRY OVERVIEW

Overall regional growth in unique subscribers will remain strong out to 2020 with the region adding more than 100 million new unique subscribers. The region will grow more quickly over the remainder of the decade than any other region except Sub-Saharan Africa; annual subscriber growth from 2015 to 2020 is projected to be 4.8%, ahead of the 4.0% global average. Smartphone adoption has risen sharply in recent years, from less than 15% of connections in 2012 to just over 50%, and this growth is set to continue. By the end of the decade, the region will add around 262 million smartphone connections compared to the end of 2015. Some 72% of connections will be smartphones in 2020. 4G coverage is now rapidly expanding, reaching nearly 60% of the population across the region in mid-2016 and set to reach 80% in 2017. Coupled with growing smartphone adoption, this will drive an accelerating migration to 4G. 4G adoption is forecast to reach almost two-fifths of connections by 2020.

MOBILE AS THE PLATFORM FOR INNOVATION ACROSS THE REGION

In 2015, mobile technologies and services generated 5% of GDP in Latin America, a contribution that amounted to around $250 billion of economic value. This will increase to more than $315 billion (5.5% of GDP) by 2020. The mobile ecosystem also supported approximately 1.9 million jobs in 2015. This includes workers directly employed in the ecosystem and jobs that are indirectly supported by the economic activity generated by the sector. The mobile ecosystem also makes a substantial contribution to the funding of the public sector, with approximately $40 billion raised in 2015 in the form of general taxation. Moreover, almost $450 million was raised in government revenue from spectrum auctions in 2015 alone.

MOBILE ADDRESSING SOCIAL CHALLENGES

The growth of the mobile ecosystem in Latin America and the Caribbean is creating new opportunities, particularly for new, local, small and medium-sized enterprises that can benefit from increased connectivity to develop content, applications and solutions to add value in new areas. The region has some of the world’s highest rates of social media usage, with the vast majority occurring over mobile networks. A recent survey of 30 countries around the world found that Latin America was home to three of the top five markets for social media usage. Latin America and the Caribbean has seen rapid growth in the number of mobile internet subscribers over recent years; more than 300 million individuals have a mobile internet subscription. As the importance of digital access and engagement increases, this figure will continue to grow strongly, to reach almost 450 million by 2020. By then, two-thirds of the population will be connected, still well behind the developed market average. Over 200 million people across the region will still be digitally excluded and unable to enjoy the socioeconomic benefits that the mobile internet can provide.

REMOVING BARRIERS THROUGH NEW POLICIES AND DEREGULATION

Removing barriers to infrastructure deployment and investment is key to enabling future growth of the industry in Latin America. This necessitates a thorough modernisation of the framework that governs the mobile industry, taking into account the global, digital and highly competitive nature of the markets. Policymakers need to take a fresh look at their regulatory approach, discarding unnecessary legacy regulations and creating a level playing field on which all players can compete. This is particularly relevant in light of new areas such as the Internet of Things, and key challenges around security, privacy and consumer protection.