Latin America. The number of people using their mobile devices to access the internet in Latin America will grow by 50 percent by the end of this decade, a new GSMA study reveals.
It is forecast that by 2020, the region will add 150 million new mobile internet subscribers, thus reaching a total of 450 million. This increase will drive economic growth, innovation and digital inclusion. The new report "The Mobile Economy: Latin America 2016" was presented during the "GSMA Mobile 360 – Latin America" conference taking place this week in Mexico City bringing together top mobile industry executives from across the region.
"The rapid growth in the number of mobile internet subscribers experienced in Latin America in recent years has contributed to the development of an 'app economy' for the content and mobile commerce industries, while stimulating a thriving local environment for start-ups," said Mats Granryd, Director General of the GSMA. "In large part, this is because local mobile operators have successfully driven subscriber migration to smartphones and mobile broadband networks, despite having to face increasing competitive and regulatory pressures in several markets in the region."
Latin America will see solid growth in user numbers over the rest of this decade, as large markets such as Brazil, Colombia, Mexico and Peru add millions of new subscribers to their user base. The total number of unique mobile subscribers in the region is forecast to grow from 414 million by the end of 2015 to 524 million by 2020. This will make Latin America the second fastest growing global region during the period, after sub-Saharan Africa. Mobile subscriber penetration is projected to increase from 65 percent of the regional population in 2015 to 78 percent in 2020. However, penetration levels vary widely in the region, with countries such as Cuba now having a very low penetration (28 percent), and others such as Argentina, Chile and Uruguay, whose penetration is over 90 percent.
The increase in smartphone adoption in Latin America has accelerated in recent years: at the end of 2015 it accounted for half of regional connections. 262 million smartphone connections are expected to be added in the region by the end of the decade. Adoption continues to be stimulated by falling smartphone prices and the increasingly widespread availability of mid- and low-end handsets. Smartphones are also driving migration to 3G and 4G mobile broadband networks. Continued investments in 4G networks by operators meant that today 4G coverage reaches 60 percent of Latin Americans and is expected to reach 80 percent by next year.
The use of mobile technologies and services throughout Latin America and the Caribbean generated USD 255 billion in economic value, equivalent to 5 percent of the region's GDP. This contribution is expected to amount to more than USD 315 billion by 2020 or 5.5 percent of GDP. The regional mobile ecosystem generated around 1.9 million jobs during 2015 and contributed USD 40 billion to public funding for general taxation. This contribution does not include revenues collected by governments through spectrum auctions, which reached USD 450 million in 2015. The total investment of mobile operators in the region will be more than USD 76 billion in CAPEX between 2016 and 2020.
"The new GSMA report highlights the valuable socio-economic contribution of the mobile industry to Latin American markets, which stimulates the virtuous circle that reduces poverty, improves infrastructure and services, and further increases internet access and use," Granryd added. "To continue this growth, the mobile industry and governments must work together to break down barriers to digital inclusion in the areas of coverage, affordability, digital skills and availability of relevant local content."
Granryd continued: "The next challenge will be in modernizing existing regulatory frameworks to facilitate the growth of future mobile services, promote industry investment, and maximize the future opportunities that the digital ecosystem will generate for the benefit of Latin American economies. The development of these new ecosystems is driven by local small and medium-sized businesses, which require greater connectivity to develop the value-added content, applications and solutions that are transforming the lives of users and businesses across the region."
*The new report "The Mobile Economy: Latin America 2016" was prepared by GSMA Intelligence, the research arm of the GSMA. To view the report and its infographics, please visit the GSMA's corporate site at: http://www.gsma.com/mobileeconomy/latam/.
