5G advances in Latam at the price of an impoverished ARPU

The development of 5G in Latin America is still in its infancy. In 2023, the technology represented around 6% of the total number of mobile lines in service and although it had been developed in 12 countries, 95% of customers were distributed among only four: Brazil, Chile, Mexico and Peru. The deployment times of the technology are at least one year behind those of 4G and the development context is also very different: the current ARPU is 43% lower than a decade ago. Although it has a slow start, the technology will consolidate from 2024 and is expected to be dominant from 2028. During 2023, the Latin American mobile market experienced a slow but progressive advance in business volume that will allow it to close the year with 712 million lines, equivalent to a penetration of 93% of the population. ARPU experienced a rapid advance and the average revenue per line in 2023 will be $ 6.8. This is a 6.3% jump compared to the previous year and the company is recovering pre-pandemic levels. The improvement is mainly explained by the recovery of some local currencies against the dollar but it is still far from 2012 levels when ARPU was USD 12 and 4G deployment was starting. 5G auctions are conditioned by low ARPU levels To know how the development of 5G is progressing, a comparison with the pace of 4G deployment is inevitable. In 2023, 5G was in its fifth year of development since the first deployment in Latin America and the technology had already been developed in 12 countries. By contrast, in its fifth year of deployment, 4G had been adopted by 36 countries: three times more. Due to the lag in adoption and development, the weight of 5G technology over the total number of mobile lines is also a year behind its predecessor. Of course, the pandemic occurred in the middle of the 5G deployment, but the poor indicators of the mobile market, which have been collapsing since 2012, also seem to play a role. ARPU is an important element in understanding the values paid in the auctions. And also to understand the striking absence of tenders, as if there were no incentives. In Latin America there have been only six auctions so far for the 3.5 GHz band, the main band for 5G in the region, and in total around $ 1.75 billion have been obtained...

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