Latin America - Mobile Network Operators and MVNOs

Latin America - Mobile Network Operators and MVNOs

Mobile network operators in Latin America continue with market consolidation strategies. Although there are a significant number of mobile network operators across Central and South America, the region is noted for the dominance of the three players Telefónica, América Móvil, and Millicom International (MIC). The size of many markets in the region, such as in Brazil and Argentina, has provided sufficient room for other players to operate, while also supporting a vibrant MVNO sector. In other markets such as Ecuador, one or more of the regional players dominate while the incumbent telco also provides competition through its own mobile business unit.

There has been considerable consolidation activity in the market during the last few quarters. América Móvil and MIC in particular have tried to buttress their business in the region by increasing scale and so developing subscriber growth as a means of generating revenue. MIC has focussed on its Latin America operations while also progressively exiting from Africa, under a strategy aimed at developing profitable markets where it has a strong market share, and where investments in network upgrades and 5G can show fruit in the short and long term.

By contrast, Telefónica has endeavoured to exit the region, with the exception of Brazil. This is also premised on a similar strategy by which the Group is concentrating on key European markets (the UK, Spain, Germany) while maintaining its presence in Brazil, where it remains the market leader in terms of the number of subscribers. Although Telefónica reported a 10% fall in revenue in Brazil in the first nine months of 2021, year-on-year, this was on the back of a 14.2% increase in 2020. The number of mobile subscribers has increased steadily in recent years, including a 7.2% increase in the year to September 2021.

Elsewhere in the region, Telefónica has sold up its units since 2019. It has already sold its Panama, Costa Rica, Nicaragua, El Salvador, and Guatemala businesses (variously to Liberty Latin America, MIC, and América Móvil), while it is also in the process of divesting its units in Ecuador and Colombia.