ABI Research is out with a new projection that calls for growth of 10% in mobile telecoms capital expenditure (CapEx) in Latin America this year, rising to $6.1 billion.
What’s driving the investment boom? Upgrades and expansion of 3G WCDMA and 4G LTE coverage will result in radio access network-related spending capturing 40% of CapEx. Investment in small cell base stations is garnering momentum with 40% year-on-year growth in 2014 to $484 million.
“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. In particular, mobile cellular CTOs are prioritizing investment in the core network functions as Internet packet traffic and value-added 3G and 4G services are playing an increasingly prominent role in the telecom services of the region,” asserts Jake Saunders, VP for core forecasting at ABI Research.
ABI Research estimates population coverage stood at just 34% at the end of 2013. This should change over the next two years as LTE subscriber adoptions grow from 2.33 million to 23 million.
ABI says there is “pent-up demand” for access to Internet services in Latin America that cannot be addressed by DSL and cable Internet services.