The Mobile Ecosystem & Latin America's Economy
Mobile technologies and services generated 5% of Latin America's GDP in 2015 and nearly 2 million jobs, direct and indirect. In addition, the mobile ecosystem has contributed USD 40 billion to the public coffers for tax purposes, according to the report, The Mobile Economy Latin America and the Caribbean 2016, from the GSMA which represents the interests of mobile operators around the world.
Click the image above to open a full-size version
With 414 million unique subscribers, the region had an average penetration rate of 65% in 2015, with an additional 100 million expected by 2020, making the region one of the fastest growing in the world. In fact, many of the largest countries in the region still have low penetration, such as Brazil with only 57%, Colombia and Peru at 66% and Mexico at 69%. At the opposite extreme, the countries with the highest penetration are Argentina, Chile and Uruguay, all with penetration greater than 92%. By the end of the decade, the regional penetration rate is expected to reach 77%.
In addition to the increase in mobile penetration, adoption of smartphones has skyrocketed in recent years, from less than 15% of connections in 2012 to more than 50% in mid-2015, and growth is expected to remain constant in the next years. In fact, about 70% of the new connections will be via smartphones, and Brazil will continue to lead this trend. The expansion of 4G coverage is also accelerating and is expected to reach 80% of the region’s population this year, which will boost migration to 4G services, which is expected to account for almost 40% of the total population by 2020. Despite the progress, the region will continue to lag behind the global average and, above all, developed countries.
“With almost 150 million new mobile internet subscribers by 2020, up 50% from 2015, the Latin America and Caribbean mobile ecosystem is creating new opportunities for growth and innovation, and a flourishing start-up environment.”
Nevertheless, the mobile ecosystem in Latin America and the Caribbean is creating new opportunities, especially for small- and medium-sized local companies that, “can benefit from increased connectivity to develop content, applications and solutions to add value in new areas.” The use of mobile devices is driving a significant increase in trade and advertising in the mobile sector, and digital commerce in Latin America is forecast to reach USD 80 billion by 2020. This growth is reflected in regional players, such as MercadoLibre, one of Latin America’s six "unicorn" companies, as start-ups valued at USD 1 billion or more are called.
Although the number mobile Internet subscribers in Latin America is expected to reach 450 million by 2020, at that time there will still be more than 200 million people excluded from digital services. This is basically due to the lack of digital skills and locally relevant content, and the lack of accessibility to services. To address this problem, according to the GSMA report, "will require collaboration and action from players across the mobile ecosystem, with important roles for both mobile operators and governments." In this sense, the GSMA says that, “removing barriers to infrastructure deployment and investment is key to enabling future growth of the industry in Latin America.”
Guest blog post from Latinoamerica21*
Jeronimo Giorgi, a Uruguayan journalist dedicated to international issues, is pursuing a master's degree in Latin American Studies. He has collaborated with various media outlets in Latin America and Europe, and has received distinctions such as the Premio Rey de España for Journalism.
Latinoamerica21 is a blog about current economic, political and social topics in Latin America that is currently published within the newspaper El Observador de Uruguay and will soon be published in other media outlets within the region. The original version of this blog post is available in Spanish: El ecosistema de la telefonía móvil genera el 5% del PIB de América Latina
*Guest blog posts do not reflect the views of FocusEconomics.
5-year economic forecasts on 30+ economic indicators for 127 countries & 33 commodities.
Learn More about Mobile in Latin America
- What is the future of telecommunications in Latin America?
- Latin America Is Home to a Robust Mobile Market
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of FocusEconomics S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. FocusEconomics S.L.U. takes no responsibility for the contents of third party internet websites.
Date: June 28, 2017
TagsGermany Eastern Europe UK Turkey economic growth Argentina Inflation Economic Growth (GDP) Infographic public debt MENA Precious Metals Commodities Spain GDP Company News Major Economies Nigeria Euro Area USA Canadian Economy Housing Market Mexico Bitcoin CIS Countries Vietnam Nordic Economies interview Costa Rica; GDP; Budget TPP United States Commodities IMF Copper Tunisia Russia Agricultural Commodities India Portugal Asean chile Budget deficit Iran Exports Banking Sector scotiabank Italy Political Risk Latin America Investment Sub-Saharan Africa OPEC Venezuela Gold Palladium Lagarde Ukraine Base Metals Consensus Forecast Energy Commodities TPS Japan Healthcare precious metals Brazil election Eurozone Central America Base Metals Commodities Asia Greece oil prices Africa Cryptocurrency Oil France Forex Economic Debt South Africa Asian Financial Crisis G7 Economic Crisis Colombia European Union Australia Economists Canada China Israel Exchange Rate Trade Resource Curse Brexit Emerging Markets Draghi United Kingdom Unemployment rate Cannabis
The oil market has been on a rollercoaster ride since the onset of the pandemic, and oil exporters’ fortunes have f… https://t.co/RjgKVhLdwM
14 hours ago
Following two global crises in quick succession, public debt-to-GDP ratios in many countries are now at multi-decad… https://t.co/WYmjrbycxF
2 days ago
Base metals posted the weakest increase in prices since April 2020 in June, following China's announcement that it… https://t.co/NW1R30219S
3 days ago
After years of chronic downturn, the Venezuelan economy appears set to shrink at a significantly softer rate this y… https://t.co/3rUhH4VTqO
6 days ago
Unemployment in Central America and the Caribbean soared last year as Covid-19 restrictions bit hard and vital tour… https://t.co/sTX41IBUG1
1 week ago