The Latin American fiber optic market appears poised to experience dynamic growth over the next four or five years.
Investments in fiber optics are expected to increase this year after a turbulent 2022 in which telecom companies' plans were affected by weak macroeconomic conditions and supply chain problems.
“The plans that the operators had [for 2022] were not met, not due to capital problems, but due to other resources, such as materials. I think that this storm that we experienced from the end of 2021 to the middle of 2022 is calming down and there is a different outlook for 2023,” Eduardo Jedruch, director of regulation at the Fiber Broadband Association, explained to BNamericas.
The latest figures from the Fiber Broadband Association (FBA) at the end of 2021 show that the 18 largest countries in Latin America had 103 million homes or buildings passed with fiber optic connections. fibra (FTTH/FTTB), 29% more than at the end of 2020.
Meanwhile, fiber subscriptions increased by 47% to 46 million, according to the study conducted by SMC+ for the FBA.
Therefore, the proportion of subscribers considering the number of locations passed is 45% in Latin America, close to 50% of the penetration levels observed in developed countries.
Barbados (92%), Uruguay (79%), and Ecuador (61%) stand out in the region in terms of penetration levels. At the other end of the scale are Jamaica (22%), Puerto Rico (21%), and Panama (19%).
SMC+ projected in November that there would be 112 million homes passed with fiber optics by the end of 2022, with 56 million subscribers.
It predicted that there would be a compound annual growth rate of 8.9% in the number of approved households and 15.3% in subscriptions between 2021 and 2026, and subscriptions are expected to reach 59% of approved households by 2026.
In terms of coverage, it was estimated that by the end of 2022, around 65% of Latin American households would be connected with fiber optics, compared to 60% at the end of 2021. The figure is expected to rise to 91% by the end of 2026.
It is expected that this year will end with 128 million homes passed in the region and 67 million FTTH/FTTB connections.
Jedruch said that the problem of overlapping fiber networks in Latin American deployments still exists. “Neutral operators are a very important player in the future, but there are still areas of overlapping coverage with multiple networks,” he noted.
Fiber optic business models in Latin America are still highly sensitive to population density, meaning that most investments are concentrated in urban areas, while investments in rural areas are commonly limited to public sector initiatives.
The FBA official said the investment is driven primarily by cable operators looking to migrate their customers from hybrid HFC networks to fiber optics, secondly by large telecom companies migrating customers from copper to fiber, and thirdly by investments made by neutral network operators.
The Chilean company Mundo recently announced that it has become the first operator to migrate all its HFC customers to fiber optics. The Claro-VTR joint venture is also expected to make further investments in fiber optics in Chile.
In Mexico, cable operator Megacable also has a plan that includes investments of around US$2 billion over the next three to four years to expand its coverage and migrate customers from HFC to fiber.
Meanwhile, in terms of fiber for telecommunications, Claro Colombia announced last year that it would invest US$25mn to expand its fiber optic networks in 20 cities.
In Peru, Telefónica's Movistar plans to reach 2 million homes passed with fiber optics by the end of 2022, and Claro announced that it will seek to reach 50% of Peruvian homes with fiber by the end of this year.
While in the past it was more expensive for operators to migrate technology because users did not fully understand the benefits of fiber optics, now customers demand fiber, as it is considered to offer faster internet speeds and more reliable connections.
“Carriers are a little behind demand,” Jedruch said.
Post time: Jan-06-2023
