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Blog Post

MVNO Latin America - Market, Trends and Opportunities

By Chinmay Mishra, Senior Product Marketing Manager, Optiva • April 26, 2024

Chinmay has 13+ years of strategy and marketing experience in telecom and technology. A technology enthusiast, he evangelizes the use of data in decision making. Chinmay is an avid dog lover who devotes time to improving the lives of four-legged furry friends.

Latin America (LATAM) is an exciting telecommunications market. It is on the cusp of becoming a digital economy, and digital infrastructure providers and telecom operators will lead this transition. The region's total subscriber penetration at the end of 2023 was around 72%, which is lower compared to other regions. By 2030, it is expected to grow to 78%. 

Smartphone adoption is reasonable, around 80% at the end of 2023, and GSMA has predicted it will be 92% by 2030(1).  At the end of 2023, 4G penetration was 66%, with 5G at 5%. LATAM is expected to lead 5G growth and achieve a 55% 5G penetration rate by 2030. Experts predict data consumption to reach around 8 GB per smartphone monthly by 2027(1).

All of the above statistics indicate a data explosion in Latin America. 

The mobile network will be the backbone of the new digital economy. Well-established telecom operators and new entrants will power it. They will innovate and disrupt the market with new business models, competitive pricing, and innovative value propositions.

#1 - Data explosion - rise in 5G adoption, 4G almost at peak

The Mobile Economy 2024 GSMA report stated that 5G penetration in LATAM was around 5%, but it predicts it will increase to 55% by 2030. Experts predict this exponential growth will surpass other developing economies worldwide, making it the fastest.

LATAM is also experiencing a rise in tech startups and investments, especially in fintech, e-com, metaverse, and e-education. With 4G adoption already at its peak, the increase in 5G and growth in supporting the ecosystem of digital businesses means only one thing — an explosion of data usage and the digital economy going mainstream.

This digital revolution means geographies will need new and innovative MVNOs or digital brands to expand this digital ecosystem and gain the best from this opportunity.

  1. New digital brands or MVNOs - The digital revolution means customers will demand end-to-end digital brands with subsidized data. Expect more low-cost MVNOs and digital lifestyle MVNOs that can commoditize data and get additional ARPU from a bigger wallet share from other digital services, such as fintech, video, mobile gaming, e-com, education, and more. 

  2. Rise of eSIM-based devices - More 5G coverage and advancement of AI will lead to new opportunities for businesses, especially in the eSIM space. These new AI devices will have to be online all the time, a trend also visible in North America. We expect that greenfield MVNOs will seize the opportunity presented by this eSIM technology.

  3. Rise in MVNEs - With a vast 5G ecosystem, telecom operators must promote and host new-age MVNOs that can help them expand this digital ecosystem. This MVNE wholesale income for telcos will be critical. We expect more MVNE platforms to emerge in the near future.

#2 - Opportunity for FWA 

Fixed wireless access (FWA) is ideal for places that are difficult to access with traditional fixed broadband. With rugged terrain and most rural areas still missing fiber lines, 5G FWA is a perfect opportunity to expand broadband services faster at a reasonable cost. Post-pandemic, governments realized the need to digitalize the LATAM region. 

Countries such as Chile, Colombia, and Mexico experienced a boost in digitalization post-pandemic and are experiencing the benefits. With government support and a digital push, FWA can flourish. 5G FWA is already being used to drive first-time home broadband adoption in markets such as Brazil, Colombia, and Peru.

#3 - To business and government - In 2021, mobile technologies and services generated 7.4% of GDP in LATAM, which amounted to more than $345 billion of economic value added. The mobile ecosystem also supported more than 1.6 million jobs (directly and indirectly)(1). 

The pandemic has increased the profile and political awareness of the advantages of digitization. However, public-private coordination will be needed to bridge the digital divide and ensure progress for every segment. All of this will run on the telecommunications network as its basic infrastructure. 

MVNOs coming out of these private-public partnerships or dedicated to B2B and B2G segments should emerge as these business models mean very different selling, revenue, and cost models for telecoms. Dedicated entities catering to these customer segments will improve efficiency and management.

#4 - New lifestyle MVNOs or digital brands

A unique trend in the LATAM telecommunications market is the approximately 120% of SIM connections in 2023. That indicates churn, low switching cost, and a price-sensitive customer. This easily segmentable customer segment with low and high ARPU also indicates opportunities to target the segments with separate brands and business models. 

It is an opportunity for incumbent MNOs that currently have one solution for all.

One-to-one mapping and dedicated brands will unlock the hidden potential and help expand the ecosystem.


(1) GSMA - The Mobile Economy 2024 

(2) Source - Mind Commerce Report 2023


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