New Market Study Published: Central America Telecommunications Report Q2 2013

Growth is slowing in the majority of Central American markets with occasional reports of subscriber discounting slowing overall growth patterns. We see notably slower growth across the board with the exception of Nicaragua, which continues to offer potential. There is a growing trend for operators to focus on mobile content to provide market growth, rather than adding new subscribers. Mobile banking solutions are likely to be top of the list of potential new products, taking advantage of the strong remittance market in the region.

Key Data:

* America Movil's subscriptions in Costa Rica, under the Claro brand, more than tripled in the first half of 2012, while Telefonica's Movistar services more than doubled over the same period. The two operators accounted for 16% of the market in June 2012.
* Cable & Wireless Panama's loss of subscribers over three quarters has had a sharply positive impact on ARPUs for the operator. This trend will play out in the rest of the region, albeit at a slower rate.

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Full Report Details at
- http://www.fastmr.com/prod/554017_central_america_telecommunications_report_q2_2013.aspx?afid=301
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Key Trends And Developments

Nicaragua saw a third mobile operator licensed, but not without controversy. Only one company was successful after seven had entered bids, and there has been speculation over collusion with the government given the lack of details over amounts that were bid. There is potentially a fourth licence to auction, but no move as yet on allowing bids. Nicaragua's market offers continued growth potential, but BMI believes Xinwei, the new player, could help propel growth.

Following the failure of Claro to gain approval for acquiring Digicel in El Salvador, the former drew a final line under the process in Q412 and Digicel subsequently announced it would invest US$40-50mn in its operations over 18 months. This is welcome news for the market, which has seen growth stall as the market matures. The investment will include launching fixed-line services, further boosting the market's competitiveness.

The ongoing saga over finding an investor for Hondutel continues to rumble on. BMI has expressed doubt that an investor can be brought in to manage the struggling operator. The future of the market is particularly focused on mobile developments and broadband. Hondutel's lack of investment is holding back the latter segment, leaving open opportunities for wireless services to fill the gap.

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