Nearshore Americas

Telecom Companies Starve for Revenue in LATAM

Latin America’s telecom market remains far from saturation, yet companies struggle to sign up more customers.

Approximately a third of the region’s population (about 250 million people) do not use mobile networks, and about 40 million reside in areas without wireless network coverage, according to telecom industry association GSMA, which held an event in Mexico City earlier this week.

There’s a variety of reasons that explain the lack of connectivity in each country. The GSMA noted that, in some places, mobile devices are prohibitively expensive. In Mexico, one of the main reasons has to do with the lack of digital literacy, which affects around 13 million people.

Carriers remain hesitant to invest in new network infrastructure due to stagnant revenue per user. Mónica Aspe, executive director of AT&T Mexico, highlighted this concern at GSMA’s summit, stating that the current operating model for telecom companies is unsustainable.

Daniel Hajj, executive director of América Móvil, added that while a small number of large companies use high-speed internet, the fees they pay do not cover company costs.

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Industry players emphasized the need for affordable spectrum and legal certainty, areas where Latin America is currently lacking.

“It is a problem for the industry and the government. Everyone should have access to mobile Internet,” said Mats Granryd, CEO of the GSMA.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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