Latin America. The telecommunications revenues of ibero-American countries and the United States reached $164 billion dollars during 1Q16, equivalent to an annual drop of 1.7%. These are the results of the research carried out by The Competitive Intelligence Unit, released by the Ibero-American Telecommunications Organization (OTI).
The statistics and revenue dynamics generated by operators participating in the telecommunications sector, in the Ibero-American region and the United States of America (USA), during the first quarter of 2016 (1Q16), as well as the main trends on relevant and more weighted countries in the regional total, are described in a timely manner.
Revenues from the Ibero-American-U.S. Integral Region (IbAm-EUA) as a whole registered a nominal annual fall of 1.7%, reaching $164,003 million dollars during 1Q16.
Two factors stand out in this statistical and market analysis. First, the revenues generated by each country and its share of the regional total are negatively and significantly affected by their exchange rate parity against the US dollar, which in the period under analysis registered a considerable impact. Secondly, countries such as Argentina and Venezuela face an important inflationary period, which together with the lack of reliability of information on prices and their behavior provided by national statistical bodies, hinders and limits the analysis of the aforementioned income over time.
Among the countries analyzed, with the exception of the United States, those that generate the highest income in the telecommunications industry are Brazil, Mexico and Spain, whose weighting in regional revenues reflects their regional weight relative to the size of their market, their degree of internal development, technological adoption and the corresponding purchasing power of their population.
In contrast, those countries that contribute the lowest income to the regional total are Paraguay, El Salvador and Honduras. The latter are characterized by their smaller market size, limited development of infrastructure for the provision of services and limited levels of adoption.
Below is a market analysis of three select countries that are among those that make the largest contribution in terms of revenue, to the IbAm-USA region.
· First, Brazil is in an adverse economic period of political instability, mainly explained by widespread discontent due to the international events held in the country (World Cup and Olympic Games), and the revocation of the mandate of its president. These circumstances have generated uncertainty with negative effects on private investment, both domestic and foreign. Consequently, the Gross Domestic Product (GDP) in 2015 contracted 3.8% annually, resulting in the consequent lower consumption of goods and services, including telecommunications and broadcasting services. Total telecommunications revenue growth in the first quarter of 2016 (1Q16) reached $34,235 million Brazilian reais ($8,890 million), 3.0% lower than for the same period in 2015.
· Secondly, Colombia recorded revenues from the telecommunications sector of $6,468 billion Colombian pesos ($2,029 million dollars), representing a growth of 2.3% in 1Q16, compared to the same period of the previous year. This evolution is attributable to the mobile segment. The reduction in interconnection rates ordered by the Communications Regulation Commission (CRC) impacted operators' revenues, while the telecommunications industry in Colombia faces a significant challenge in the face of lower returns and higher investment expenses to ensure universal connectivity in the country, particularly in broadband service.
· Thirdly, the case of the United States stands out, which has not been included in the graphical analysis because the revenues generated by its telecommunications industry differ significantly from the rest of the countries analyzed, representing more than three times what was generated by the whole. The diversity in the number of operators, the high levels of competition, the high purchasing power of its population and maturity that characterize the US market induce a stable behavior of telecommunications revenues that is manifested in a growth rate of 1.5% per year in revenues, lower than GDP growth (approximately 2.4%), accounting for $126,832 million dollars during 1Q16.
· Finally, in the case of Mexico, there is an annual revenue growth of 4.6%, when comparing revenues during 1Q16 equivalent to $110,154 million Mexican pesos ($6,098 million dollars), with respect to those obtained in the same quarter of the previous year. This growth is higher than that recorded by GDP in the same period (2.6%). Additionally, the highest growth is registered in the pay-TV and convergent services segment, followed by mobile and lastly fixed, which registers a small drop compared to last year. The growth in telecommunications revenues in Mexico is attributable to several factors, among which are: the relatively stable macroeconomic environment of the country, the incessant increase in access and consumption of fixed, mobile and restricted television broadband, as well as the increasing affordability and quality of services, product of greater investment and development of networks.
The main results of the telecommunications sector of the IbAm-EUA countries identify an alignment with the national macroeconomic context, technological trends, the development, coverage and quality of network infrastructure, as well as the dynamics of consumption, prices and preferences of service users.
*The image describes Telecommunications Sector Revenue, Q16 (Millions of dollars per country). Source: The Competitive Intelligence Unit with information from regulators and operators.
