For Argentina, 2012 was a disappointing year, with GDP growth well below market forecasts. The outlook remains uncertain; economists’ projections vary between 1.8% and 4.6% GDP growth for 2013. Inflation remains a serious problem. Other macroeconomic, legal, and regulatory challenges include nationalisation risks, tight import controls, and restrictions on currency exchange.
Telecom revenues are expected to reach more than US$17 billion in 2013. Mobile revenues account for more than two thirds of total telecom revenues, and this proportion continues to rise at the expense of fixed-line sales. Considering both mobile and fixed-line revenues, Spain’s Telefónica/Movistar and Italy’s Telecom Argentina are the largest telecom operators, with consolidated revenues of US$4.92 billion and US$4.87 billion respectively in 2012. Mexico’s Claro is in third place, with US$3.22 billion, and Argentina’s Grupo Clarín occupies a distant fourth place, with US$1.68 billion.
The country’s regulatory framework encourages competition and supports smaller telecom players. Argentina has adopted a single licence system (Licencia Única), which telecom companies must obtain regardless of the services they wish to provide. When operators apply for a licence, they must list which services they wish to offer, but can at any time register for additional ones. However, broadband competition is weak, and the wholesale market is poorly regulated.
Argentina’s teledensity is the fourth highest in South America after Uruguay, Chile, and Brazil – having been overtaken by the latter in 2012. As in other countries, fixed-to-mobile substitution has adversely affected the Argentinean fixed-line market. In fact, since peaking at 24.5% in 2005, the country’s teledensity has shrunk by 2.5 percentage points.
The local fixed-line market is made up of the following: the incumbents Telecom Argentina (Telecom) and Telefónica de Argentina (TASA); some 400 small telecom operators, mostly cooperatives; a number of cable TV companies that offer fixed telephony over their networks as part of triple play bundles. TASA and Telecom own respectively 52% and 45% of the country’s fixed lines in service. Unlike other countries where triple play has helped boost the flagging fixed-line sector, the only company that could have made a difference – Grupo Clarín – has not been allowed to offer telephony services.
In terms of broadband penetration, Argentina ranks third in Latin America after Uruguay and Chile. But economic and political difficulties have had a negative impact on investments, and the high broadband penetration figures hide a less glowing picture: in terms of mean download speed, Argentina ranks 11th in Latin America.
The two fixed-line incumbents Telefónica de Argentina and Telecom Argentina dominate the ADSL market, offering similar services and together controlling about 68% of all broadband in the country. The only meaningful competition is cable modem, offered by Grupo Clarín, but political interference has put the company at risk.
National broadband plan
A national connectivity plan, dubbed ‘Argentina Conectada’, involves the deployment of broadband services and free-to-air digital TV to underserved parts of the country. The plan, launched by the government in October 2010, is to be implemented over five years. State-owned satellite company Arsat is responsible for the project.
Pay TV market
Argentina’s pay television market is the most mature in Latin America. In fact, Argentina is a world leader in terms of pay TV penetration, with about two homes out of three subscribing to pay TV services. Pay TV households are evenly distributed, with penetration in the major cities only slightly higher than in the rest of the country.
Pay TV companies
Grupo Clarín’s Cablevisión is the country’s leading pay TV operator with about 36% of the market; DirecTV is the second largest player, with a 20% share; Supercanal, Telecentro, and Red Intercable have approximately 6% to 7% each; the remaining 25% of the market is shared among small local companies and cooperatives.
Argentina is one of the most dynamic mobile markets and the third largest in Latin America, after Brazil and Mexico. Mobile penetration looks set to reach approximately 147% by end-2013, with the number of subscribers increasing by 3% annually. Many Argentineans own multiple SIM cards, some having different phones for work and personal calls, some having a phone for each mobile company to take advantage of special offers, and some requiring an additional SIM card for mobile broadband.
Three mobile companies compete neck-and-neck, each one controlling about one third of the country’s mobile market. América Móvil’s Claro is the market leader, followed by Telecom Personal (the mobile unit of Telecom Argentina, controlled by Telecom Italia). Telefónica’s Movistar is in third place. Nextel has but a small 3% market share, and Fecosur, an association of fixed-line telecom cooperatives, offers Mobile Virtual Network Operator (MVNO) services branded Nuestro.
Argentina’s smartphone penetration is well above the estimated world average; at end-2012, about 24% of Argentineans owned a smartphone, compared with an estimated 15% world penetration. In 2013, Argentina’s smartphone market is expected to outperform all other markets in the region.
BuddeComm’s yearly update of Argentina – Telecoms, Mobile, Broadband, and Forecasts provides a comprehensive overview of the trends and developments in the telecommunications market of Argentina, including the regulator’s statistics, company data, and other industry indicators to the end of 2012, as well as estimates for 2013 and expected market developments in the coming years.
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