Table of Contents
Panama's internet and mobile sectors prop up revenue growth
Panama's economic prospects remain promising despite a dip in GDP growth during the last few years. Nevertheless, growth remains high, at above 6% annually, and this has had a positive knock-on effect on the country's telecom market, which has also grown steadily and attracted considerable investment. Liberty Global in October 2015 made a bid to acquire Cable & Wireless Communications, which owns the incumbent telco Cable & Wireless Panama. The deal was accepted by Liberty Global shareholders in April 2016, and when completed it will enable Liberty Global to combine CWP's businesses in Panama and the Caribbean with its own operations in Chile and Puerto Rico. The merged operator will provide improved bundled service offerings and stimulate competition with the other regional players Digicel and Claro.
Telecom revenue has broached $1 billion during the last few years, and continues to increase steadily, with mobile services and broadband being the fastest growing sectors.
Panama's fixed-line teledensity is well below average for the region, though it is rising steadily from a relatively low base, largely due to alternative operators making use of cable or fixed-wireless networks.
Competition remains limited in the broadband sector, where the incumbent Cable & Wireless Panamá has resisted unbundling its local network and as a result has secured a virtual monopoly in the delivery of DSL access. The only cross-platform competition is from cable modem and WiMAX services.
The mobile sector has flourished in recent years, and the popularity of having multiple SIM cards has pushed mobile penetration rates above 174%, considerably higher than the regional average. The arrival of two new mobile players at the beginning of 2009 resulted in additional competition and steep price reductions which have shaken the market. Digicel Panamá launched operations in 2008, followed by América Móvil's Claro in 2009. This ended the duopoly long enjoyed by Cable & Wireless Panamá and Telefónica's Movistar.
Internet penetration has grown in recent years and is expected to do so steadily further into 2016 and into 2017 as a result of consumer demand for services as well as the stimulus of the government's Internet for All project. In 2010, Panama became one of the first countries in the world to offer free wireless broadband access nationwide. The National Internet Network project does not compete with private broadband providers, because its aim is digital inclusion and not the provision of broadband access.
Panama penetration by service 2015 (e)
Service | Penetration
Broadband | 8.1%
Fixed-line | 15.6%
Mobile (SIM): | 174%
Movistar, Claro and C&WP extend reach of LTE services;
Liberty Global acquires C&W Communications;
C&WP contracts Ericsson to develop VoLTE and Wi-Fi Calling services;
C&WP trials G-fast technology with Huawei;
Mobile number portability encouraging competition in the mobile sector;
The Internet for All (RNI) project helping drive internet penetration;
Panama in Phase 2 of the switch to digital broadcasting, with the process expected to be complete by September 2017;
Columbus signs on to manage the SAPL cable landing in Panama;
Regulator invests $12 million to distribute 400,000 STBs in a bid to encourage DTTV take-up;
Broadband for Central America project aims to closing the digital divide by 2020.
C&WP launches its +TV Digital DTH platform, aiming to provide content to remote areas which cannot receive cable services;
Report update includes the regulator's market data to December 2015, operator data to Q4 2015, recent market developments.
Companies mentioned in this report:
Cable and Wireless Panama, Cable Onda, Claro, Optynex Telecom
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