TEXT-S&P: rising demand, 4G bode well for Latin American telecoms

Fri Jan 11, 2013 11:28am EST

(The following statement was released by the rating agency)
    Jan 11 - Rising mobile data usage has spurred growth in the telecom sector
and new content, the explosion of mobile applications, the evolution of
smartphones and tablets, and connected machine-to-machine applications will
likely support demand for mobile data services in the next few years, said
Standard & Poor's Ratings Services in a published report titled "Latin American
Telecom Operators Are Likely To Profit From Rising Demand And New 4G Wireless
Technology."

In Latin America, about 15%-16% of the population uses smartphones, which is 
low compared with other developed markets, but sales are climbing rapidly.

"Given customers' massive use of data, we believe it is just a matter of time 
before mobile broadband subscriptions rise also," said Standard & Poor's 
credit analyst Marcela Duenas.

Industry experts expect that by 2017, 55% of new handsets in the region will 
be smartphones. Mobile broadband penetration in Latin America is only 12%, or 
47 million broadband users out of nearly 662 million mobile subscribers during 
the second quarter of 2012. However, mobile data traffic in the region will 
grow at a 79% compound annual growth rate from 2011 to 2016, according to 
Cisco Systems Inc.

These trends create an opportunity for telecom operators to boost their 
revenues, provided that they're able to invest in the network upgrades and 
technology required to cope with the higher data usage. In the long run, this 
spending could affect some ratings though.

The report is available to subscribers of RatingsDirect on the Global Credit 
Portal at www.globalcreditportal.com. If you are not a RatingsDirect 
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 
or sending an e-mail to research_request@standardandpoors.com. Ratings 
information can also be found on Standard & Poor's public Web site by using 
the Ratings search box located in the left column at www.standardandpoors.com. 

 (New York Ratings Team)
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