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The number of people across Latin America using their mobile devices to access the Internet is set to grow by 50 per cent by the end of the decade, according to a GSMA study. It is forecast that 150 million new mobile internet subscribers will be added in the region by 2020, bringing the total to 450 million and driving economic growth, innovation and digital inclusion. The new report, ‘The Mobile Economy: Latin America and the Caribbean 2016’, was published at the ‘GSMA Mobile 360 – Latin America’ event being held in Mexico City this week, which brings together leading mobile executives from across the region.
“Latin America has seen rapid growth in the number of mobile internet subscribers over recent years, helping to build an ‘app economy’ in areas such as mobile commerce and mobile content, and supporting a flourishing local start-up environment,” said Mats Granryd, Director General of the GSMA. “This is due in large part to local mobile operators being able to successfully migrate existing subscribers to smartphones and mobile broadband networks, despite dealing with growing competitive and regulatory pressures in many regional markets.”
World’s Second-Fastest Growing Mobile Region
The Latin America region will enjoy strong subscriber growth for the remainder of the decade, as large markets such as Brazil, Colombia, Mexico and Peru add millions of new subscribers. The overall number of unique mobile subscribers in Latin America is forecast to reach 524 million by 2020, up from 414 million at the end of 2015, making Latin America the second-fastest growing global region during this period after Sub-Saharan Africa. Mobile subscriber penetration is forecast to increase from 65 per cent of the region’s population in 2015 to 78 per cent by 2020. However, the picture varies widely by country, with penetration currently as low as 28 per cent in Cuba, but above 90 per cent in markets such as Argentina, Chile and Uruguay.
Smartphone adoption in Latin America has risen sharply in recent years, accounting for half of regional connections at the end of 2015. The region is expected to add 262 million smartphones connections by the end of the decade. Adoption continues to be stimulated by falling smartphone prices and a growing range of mid- and low-end devices. Smartphones are also driving migration to 3G/4G mobile broadband networks. Ongoing operator investments in 4G mean that 4G coverage is available to 60 per cent of the region’s population today and is set to cover 80 per cent by next year.
Mobile Contributing to GDP, Jobs and Public Funding
The use of mobile technologies and services across the Latin America and Caribbean region generated $255 billion in economic value last year, equivalent to 5 per cent of the region’s GDP5. This contribution is expected to increase to more than $315 billion by 2020, or 5.5 per cent of expected GDP. The region’s mobile ecosystem also supported approximately 1.9 million jobs in 2015 and made a $40 billion contribution to the public sector via general taxation. This contribution excludes government revenue raised via spectrum auctions, which totalled almost $450 million in 2015. Mobile operators in the region are jointly set to invest more than $76 billion in capital expenditure between 2016-2020.
“Our new report underlines how mobile is making a valuable social and economic contribution to the economies of Latin America, fuelling a virtuous circle that reduces poverty, improves infrastructure and services, and further increases internet access and usage,” added Granryd. “To continue this growth, the mobile industry and government must work together to tackle barriers to digital inclusion in areas such as network coverage, affordability, digital skills and the availability of locally relevant content.”
Granryd continued: “Modernising existing regulatory frameworks will be the next challenge in enabling future mobile services growth, fostering industry investment and maximising future digital ecosystem opportunities for Latin American economies. These new ecosystems will be driven by the local, small and medium enterprises that are leveraging increased connectivity to develop the content, applications and value-added solutions that are transforming the lives of consumers and businesses across the region.”