Ecuador: Long-awaited 4G Spectrum Allocation Spurs Competition and Investment in Telecoms Infra

From: Fast Market Research, Inc.
Published: Fri Feb 19 2016

Ecuador's telecom and pay-TV market will generate $3.4bn in service revenue in 2015, a small increase from $3.3bn in 2014. With the ninth largest population in Latin America, Ecuador is home to the eight largest telecom services market in the region. Prevailing weaker consumer spending due tougher economic environment stemming from low oil prices, will result in a slight decrease in telecom revenue in 2016. We expect growth to resume in 2017 as oil prices and thus the economy progressively recover. More specifically, Pyramid Research expects Ecuador's telecom services market to grow at a CAGR of 2.4% over the next five years, to reach $3.8bn in 2020 and generating a cumulative revenue of $21.2bn between 2015 and 2020.

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Key Findings

* Claro and Movistar have conducted a clean-up of their prepaid base, which will help them with their market share positions and thus the fees they have to pay under the new regime. Following these major disconnections, we expect mobile subscription penetration of population in Ecuador to stand at 90.6% at year-end 2015, down from 114.7% a year earlier.
* With just under 19% of all mobile subscriptions connected to 3G/3.5G networks, Ecuador has one of the lowest 3G penetration rates in Latin America, alongside Bolivia and Paraguay. Movistar and Claro commercially launched LTE services in March and July 2015, respectively, after acquiring 4G spectrum in February. We expect the number of LTE subscriptions in Ecuador to grow at a CAGR of 35.0% between 2015-2020, from 0.9m at year-end 2015 to over 4m by year-end 2020.
* Broadband lines continue to proliferate in Ecuador. Through year end-2015, 210,000 fixed broadband lines were added, giving Ecuador 1.5m broadband access lines, a penetration rate of 9.8%. Pyramid Research estimates broadband lines will grow at a CAGR of 10.9% over the 2015-2020 period, to reach 2.6m by year-end 2020. Continued investment on the expansion of the national fiber optic backbone and the deployment of new undersea cables will support this growth.
* Pyramid Research expects the Ecuadorian pay-TV market to generate $285.5m in service revenue in 2015, up from $228.3m in 2014. We also anticipate pay-TV providers will add a total of 214,000 pay-TV subscriptions in 2015, reaching a total of 1.4m subscribers and a household penetration of 48.8%, above the regional average of 42.1%.

Pyramid Research's report - "Ecuador: Long-awaited 4G Spectrum Allocation Spurs Competition and Investment in Telecoms Infrastructure" provides an executive-level overview of the telecommunications market in Ecuador today, with detailed forecasts of key indicators up to 2020. It delivers deep quantitative and qualitative insight into Ecuadorian's telecom market, analyzing key trends, evaluating near-term opportunities and assessing risk factors, based on proprietary data from Pyramid Research's databases.

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