Latin America will account for 51 million 4G subscribers by the end of 2017, according to the most recent report published by Maravedis-Rethink, a provider of market intelligence and advisory services.
"With only five small commercial LTE deployments in the region so far, 4G market adoption is rather slow and dominated by LTE " said Cintia Garza, author of the report. "4G market adoption will continue to be slow in the next two years due to a number of factors, including a slow spectrum allocation process, a rather conservative attitude by dominant mobile carriers towards 4G, a low ARPU and the dominance of prepaid in the region."
Currently, América Móvil (38%) and Telefónica (25%) represent two thirds of the regional total mobile subscriber base and, according to Maravedis-Rethink (Hampshire, UK), will dominate the 4G /LTE market.
Although according to the report, 3G carriers in Latin America are still hesitant toward 4G adoption.
"3G carriers in the region are rather conservative with technology adoption, while Greenfield operators don't have the sufficient resources to drive the market," says Garza.
According to Garza, Latin American operators are faced with the challenge of monetizing their network investments and making profits in low-ARPU mobile markets while MVNOs and OTT players are threatening their revenues.
In this context, multimode devices will be crucial for market adoption, says the report. The research reveals that 82% of the total 4G devices activated in Latin America by 2017 will be dual-mode, supporting LTE + Legacy (2G/3G). On the other hand, only 20% of mobile users are postpaid subscribers.
"This is a significant factor for mobile broadband uptake as most users have to fund their own devices," says Maravedis-Rethink research director Caroline Gabriel.
700MHz, 2.1GHz and 2.6GHz. 2.6GHz will be the most widely used frequency bands for LTE in the region, and according to the report, CAPEX for 4G in the region is expected to reach an accumulated $13 billion by 2017.