Telecom carriers across Latin America are pouring billions of dollars into high-speed broadband networks, with demand for 3G and 4G services soaring to new heights in the region traditionally dominated by DSL and cable internet service providers.
In its latest report, ABI Research has predicted that upgrades and expansion of 3G and 4G/LTE coverage will result in radio access network-related spending capturing 40% of carriers’ capital expenditure (capEx).
For the first time, telcos are realizing that they cannot meet the demand for high-speed Internet service with their legacy DSL and cable infrastructure. As a result, they are rolling out high-speed networks.
“Mobile telecom capital expenditure in Latin America is expected to grow rapidly in 2014 as investment in 4G LTE starts to accelerate. Significant amounts of capital expenditure are still required to build out 4G LTE coverage,” says Jake Saunders of ABI Research.
In Chile, Telefonica is bolstering its 3G network by rolling out fiber optic networks, with reports saying that the operator has set aside a further US$200 million to invest in new networks over the next three years. In Peru, Telefonica is investing US$250 million in LTE-related infrastructure.
In Brazil, TIM Brazil has completed rolling out its first 150 small cells to boost its mobile network’s signal transmission capacity, while in Colombia Avantel is investing US$250 million on the first stage of its 4G roll-out.
Investment in small cell base stations is also garnering momentum with 40% year-on-year growth in 2014 to US$484 million.
In several countries, mobile cellular CTOs are prioritizing investment in the core network functions as Internet packet traffic and 3G and 4G services are playing an increasingly prominent role, the research firm said.
According to 4G Americas, a telecom industry body, Latin America gained 59.1 million new HSPA and HSPA+ connections, adding 20.2 million in the third quarter alone. Today, LTE and HSPA mobile broadband service account for 24% of Latin America’s telecom market.