Boston, MA -- (SBWIRE) -- 12/23/2013 -- Venezuela saw the launch of 4G LTE, as the smallest of the three operators Digitel, made the service commercially available in September 2013. While this represents an important step forward for the market, we remain bearish towards its impact on mobile broadband growth. In part, this is due to uncertainty regarding the political situation and the deteriorating economy, lowering confidence and causing Venezuelans to leave their higher-value subscriptions to more basic ones. This is in line with our country risk outlook for Venezuela, which has seen real private consumption deteriorate and wages drop in 2013, due to rising inflationary pressures; driven by the currency devaluation and slowdown in real credit growth. The possibility for further currency devaluation remains over the next few quarters, and given the heavy government influence over the telecoms market, with state-owned firms playing major roles, this could have negative consequences over the short- to medium term. For now, the government continues to a push telecoms access for all policy, with growth momentum maintained during Q213 in mobile, fixed line, broadband and pay-TV services.

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Key Data

- Total mobile subscriptions returned to growth in Q213, following a net loss in the previous quarter. The market has yet to recover to end of 2012 levels, but should do by end-2013. The market added 188,000 net users during the quarter ending June 2013.
- In the fixed-line market, Venezuela continues to report growth, according to Conatel. The market finished with 7.766mn subscriptions in Q213, up by 3.8% year-on-year (y-o-y).
- Conatel reported Venezuela had 12.6mn internet users and 3.362mn broadband subscriptions in Q213.

Key Trends & Developments

Digitel has commercially rolled-out its 4G LTE mobile broadband network on September 9 for all prepaid and postpaid subscribers in the country. The operator had launched its postpaid-only 4G services in selected regions of Greater Caracas, Maracay and other mainly central and western cities in Venezuela. The operator has currently installed 230 LTE base stations, out of the projected 385 planned for 2013, with a medium-term goal of installing more than 800 LTE base stations in the country. NetUno, a Venezuelan cable TV, telephony and internet operator, has asked the country's industry regulator Conatel if it can implement direct-to-home (DTH) satellite TV services in order to enhance its TV coverage across Venezuela. NetUno currently has about 100,000 TV subscribers on its cable systems in nine cities, but wants to take on about 300,000 new customers by 2016, with the launch of DTH services. The company is reportedly investing US$15mn in the project.

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