LTE Gaining Momentum in Latin America, But Lack of Handsets a Problem

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The mobile market in Latin America is expected to prosper this year, with an estimated 742 million subscriptions by the end of 2013. That's an increase of 7.1 percent over 2012.

“There is a big appetite for mobile data services in the region, and such services will be the growth engine for the sector," said Marceli Passoni, senior analyst at Informa Telecoms & Media.

According to Informa, data revenues will increase 18 percent year-on-year, topping almost $28 billion. Latin America's low PC and fixed-broadband penetrations combined with a reduction in smartphone prices and greater affordability of mobile date plans have contributed to the increasing mobile broadband adoption. Informa also predicts the number of smartphone connections will increase 35 percent year-on-year in 2013 to roughly 141 million.

There is also strong momentum for LTE technology in the Latin American region. More than 60 percent of polled operators said they would launch 4G services by 2013. LTE-spectrum auctions are planned in five countries this year and the service is expected to go live in Chile and be fully commercially launched in Brazil.

“A key challenge for Latin American operators, however, is that LTE is still a relatively new technology, and one that has yet to generate the economies of scale required to bring prices down. Another major challenge is the limited number of 4G-handset models available in the market, and their expense," said Passoni.

Because of this, LTE won't even represent 1 percent of mobile subscriptions in Latin America in 2013; however, LTE is likely to be more widely adopted in the medium term given the speed it's being launched worldwide.

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