Boston, MA -- (SBWire) -- 12/19/2013 --The telecoms market in Argentina continues to offer growth opportunities. Investments in data network capacity and extension of access are driving broadband growth, while in the mobile market, the introduction of MVNOs is to make the market even more competitive and result in more growth. However, there are downside risks at work, especially the potential for heavy-handed government intervention, which has included threats of renationalisation and pressure on operators to defer price rises. There are also threats in terms of consumption trends, with data indicating that operators may be facing the beginnings of SMS IP substitution in 2013, which could squeeze revenues and margins in the following years. Overall, we hold a positive view of the market, but much will depend on the policies and regulations enacted by the government.
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Key Data
- Mobile subscriptions have continued to increase, even at high penetration rates, as mobile broadband services are increasingly driving growth.
- Fixed voice subscriptions are in decline, falling 2% year-on-year (y-o-y) to 9.071mn lines in service at the end of June 2013.
- Fixed and mobile broadband connections are on the rise, with 18.2mn forecast to in service in 2014.
Key Trends & Developments
Regulation of the telecoms market has become an area of concern, with the implementation of new mobile service quality regulations followed by threats of renationalisation in July 2013. While we believe the threats are more of a warning than a likely outcome, the comments are concerning for operators in the market, especially considering the government's track record in other areas of the economy. Moreover, Secom has also put pressure on Telecom Personal and Movistar to postpone price increases that they had been planning to implement in September 2013.
The government has also been working towards reducing roaming costs between Argentina and Chile, with the two countries signing an agreement in August 2013, under which the authorities will negotiate with operators in both countries over the reduction of tariffs. The two countries also aim to set up a bilateral regulation of roaming costs in a bid to lower the rates paid by users for mobile and internet services.
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