BMI View : A f altering economy and high mobile penetration rates hampered Argentina's mobile market in 2014 although BMI does not believe that market growth will plateau by the end of our fo recast period. On the upside, the recent spectrum auction for 3G and 4G bandwidth should see the development of data services speed up. The appetite for increased data services is evident by the strong growth of mobile internet services seen over the last few years. BMI believes that 3G/4G services will account for 73.7% of the total mobile market by 2019.
Mobile connections contracted by 506,000 at the end of March 2015, bringing the total by the end of Q115 to 61.510mn. Growth is expected to slow significantly as operators upgrade existing subscribers to next-generation networks.
There were 9.241mn lines in service at the end of September 2014, with INDEC data showing this rising slightly from 9.142mn at the end of the same period in 2013. The broadband market continues to be the market's most dynamic, with connections on the rise. Some 18.5mn are forecast to be in service in 2014.
Key Trends & Developments
The government of Argentina auctioned national 4G spectrum in the 700MHz and 1,700MHz/2,100MHz advanced wireless services frequency bands and also regional 3G spectrum in the 850MHz SRMC and 1,900MHz personal communications service ranges on October 31 2014. Five companies pre-qualified for the auction - Claro Argentina, Telecom Personal, Telefonica Moviles (Movistar), Nextel and Grupo Uno, but three companies have thus far been awarded spectrum - Movistar, Claro and Telecom Personal. Under the 15-year licences, the winning bidders of the 4G spectrum will be required to increase population coverage to 98% in five years. Following the auctions, both Movistar and Telecom Personal launched their 4G networks only days apart.Operators have responded by channelling their capex into expanding LTE networks. Claro Argentina plans to invest ARS2.65bn (USD303.7mn) by 2019, mainly in the expansion of its 3G network infrastructure and the deployment of its 4G LTE services across the country. Movistar plans to invest ARS3bn (USD346.8mn) to deploy 4G LTE services in Buenos Aires Province. The operator aims to provide 4G technology in 53 municipalities by deploying more than 1,300 LTE sites across the province. In June 2015, it also emerged that fourth operator - media conglomerate Arlink - received frequencies in both the 700MHz and AWS (1.7-2.1GHz) bands to provide 3G and 4G services across Argentina.
Following the spectrum auctions all operators are investing heavily into 4G services. Telecom Personal's 4G LTE subscriber base reached 50,000in June 2015,after six months of the launch of the service. Meanwhile, Movistar has reportedly activated 1,000 LTE base transceiver stations (BTS) in the country by early June 2015.
The Supreme Court of Argentina rejected appeals by the government and several telephony licencees against a court ruling that barred telecoms operators from offering broadcasting services. Previously, the Argentina Cable Television Association and local cable firms Cablevision, Multicanal and Telecentro initiated a lawsuit reacting to reports that telephony service providers had started to provide video-on-demand services. A court then ruled that under the licences terms awarded to firms offering telephony services, the holder may not provide broadcasting services, but this was later appealed by the government and several telecoms firms. The Supreme Court has now rejected the appeals against the ruling and directed Telefonica de Argentina and Telecom Argentina to discontinue offering pay-TV services through agreements with other firms.