Growth in Guatemala's telecom sector has been affected by the continuing global economic downturn, which has reduced spending power in both the residential and corporate markets. The fixed-line market shrank for the first time in 2009, a trend which has been maintained since. The broadband market has continued to grow but at a slower rate while the mobile telephony market has shown remarkably strong growth in recent years, largely stimulated by consumers finding an alternative to fixed-line communications. Indeed, poor infrastructure has led to the country having one of the lowest fixed-line teledensities in the region.
As a result, broadband availability is limited. This has been exacerbated by very low GDP per capita, which has stymied consumer take-up of services where available, as also the popular use of computers. The outlook for the remainder of 2014 is characteristic of former years, with the fixed-line market likely to stagnate while the fixed broadband and mobile sectors develop steadily.
The anticipated growth in GDP per capita will provide more disposable household revenue and so stimulate demand for telecom and ICT services.
This would be more marked should the country free itself from its legacy of violence, poverty, and corruption, factors which continue to inhibit prospective investors.
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Among the poorer countries in Latin America, Guatemala's telecom infrastructure has suffered from years of underinvestment from state and provincial governments. Network upgrades, in both the fixed-line and mobile sector, have largely been undertaken by the private sector. A number of key players, including Telefnica and Amrica Mvil, are regional and global powerhouses which can tap into expertise and financial resources to bolster their Guatemalan businesses. Given the commercial impetus of these operators, insufficient government financial investment has resulted in many regional areas remaining with poor or non-existent services. Nevertheless, the country benefits from one of the most open regulatory frameworks, with all telecom sectors having been open to competition since 1996.
Amrica Mvil controls about 70% of the fixed lines in service through its subsidiary Claro. Mobile telephony has been the most developed telecom market in Guatemala for several quarters and is likely to remain so for the next few years given the poor condition of fixed-line services. The intense competition amongst operators has helped to improve services and lower prices. Mobile penetration is on a par with the regional average, while the strong growth in the mobile subscriber base is a further indication that consumers are leaning to mobile telephony as an alternative to fixed-line services.
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