Many suppliers think it is too early to enter into the Latin American market for FTTH/FTTB products since they think that it may take a few more years to get some significant business volume from the region. The study conducted by IDATE’s Strategy business unit presents a different picture, a promising market and a growing number of subscribers to superfast broadband band services, suggesting a growing potential market in many Latin American countries. The study reveals 3.65 million subscribers and 20.1 million homes passed with fiber-optic networks in the sixteen countries. While many regions in Latin America are busy developing backbone networks that are necessary to support broadband and mobile services, some pockets are advancing with fiber optic broadband technologies. Ms. Valérie Chaillou, Director of Studies has published an article in the Digiworld that analyzes the status of the FTTH/B market in Latin American countries.
One of the peculiar problems in many Latin American countries that are similar to the Indian sub-continent is the disparity not only between the countries but also inside the countries. Rather than focusing on providing superfast broadband to those living in developed pockets in this region, governments give priority to deploy networks to the underdeveloped areas in an attempt to reduce the digital differences inside these countries. Providers in these countries are engaged in the expansion of traditional broadband technologies rather than next generation technologies. Latin America as a whole has severe economic difficulties. IDATE team points to the heterogenic characteristic that prevails in the telecom market in the region. Involvement of authorities differs from one country to another as they include or not the telecom infrastructures in their overall development strategy. Also, there are no specific rules adopted to the development of superfast broadband including FTTH and FTTH.
Mexico claims the top of the list with the highest number of FTTH/B subscribers, which is 1.29 million at the end of 2015. Brazil has a total of 1.25 million. Mexico and Brazil together have 69% of the total FTTH/B subscribers in Latin America. Colombia is a promising candidate with 0.15 million subscribers and more than 1.3 million homes passed with fiber-optic networks.
IDATE says the competition in the market has had a positive impact and really enhanced FTTH players to enlarge and/or accelerate their rollouts in major markets such as Brazil, Argentina, Mexico, and Chile. The kind of players involved in FTTH can also be quite different when comparing the countries. In countries such as Argentina, Mexico, Chile, Urugua,y, etc., the incumbents play a key role and are really active in the FTTH/B market. But in most cases, the first rollouts have been initiated by small private players, focused on limited areas, at least in the short/medium term. As an example, the Mexican market grew significantly during 2015, with +46% subscribers: the competition between two leading players, Telmex on one side and TotalPlay on the other side seems to positively drive the market. On its side, the Brazilian market grew a little bit less (+ 32% subs) and is also driven by the strong involvement of national players, but also of small players rolling out in very located areas.
For the past three years, the market has witnessed the emergence of pan-regional players, in particular when coming to the Caribbean islands. Cable & Wireless Communications, through its brand name LIME, is a leading player in Barbados and Jamaica, where it is involved in FTTH rollouts. Another player was cable operator Columbus Communications, which operated under the brand name Flow in Barbados, Jamaica, Grenada, and Trinidad & Tobago. Even though Docsis 3.0 was the main infrastructure, Cableco also rolled out some FTTH networks in small areas. Telefonica is present in major markets and America Movil is an important telecom service provider through the brand Claro engaged in deploying FTTLA+Docsis 3.0 and FTTH networks.
The article by Ms. Valérie Chaillou points to the potential of Latin American countries for FTTH by considering the demography and the dynamism in the real estate market. Some countries such as Bolivia has the problem of undersized international connectivity, which impacts the real capacities of the Internet Service Providers to serve their customers.
To summarize: IDATE sees positive signs for FTTH since 2013 in the region. It is a matter of time for Latin America to make a significant leap in the superfast broadband market. The market will surely catch up with other mature markets in the world. Those who enter into this market should keep a long-term strategy. The fact that the market is coming up is reinforced by the list published by FTTH Council that ranks countries based on the penetration rate. 9 Latin American countries have found their place in the global ranking list as of September 2015.
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