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March 07, 2011

Mobile Broadband Acts as Key Growth Driver for Operators in Ecuador
By Rajani Baburajan
TMCnet Contributor

Telecom operators in Ecuador are expanding their 3.5G HSPA coverage because they are looking to mobile broadband as a way to find additional and sustainable revenue streams, according to Pyramid Research, an independent research firm.

“Ecuador's highly penetrated mobile market boasted a 107 percent mobile subscription rate at year-end 2010, while the fixed market remains at 14.5 percent narrowband penetration unfavorably with the Latin American average of 16.7 percent,” said Eulalia Marin-Sorribes, analyst at Pyramid Research, in a statement. “Ecuador's broadband penetration is only 2.7 percent, less than half of the regional average of 7.2 percent.”

The under penetrated fixed, broadband and pay-TV markets are suggesting a faster growth rate. Ecuador’s telecom market is experiencing a complicated regulatory environment. Developments like the renewal of Porta and Movistar's cellular licenses in 2008 as well as the limited competition are signaling at a weak regulatory environment.

In such environment conditions, the industry will maintain the growth rates at modest levels, according to Pyramid Research.

Ecuador has a relatively low fixed broadband penetration. Operators are considering mobile broadband as the primary vehicle for meeting unmet demand for broadband connectivity in Ecuador.

Due to the limited coverage in the country, low connection speeds and high tariffs, mobile operators will take the bulk of the traditionally fixed broadband opportunity in Ecuador. Operators such as Porta, Movistar and Alegro are pushing their mobile broadband platforms as an alternative to fixed broadband.

The Pyramid Research report called “Ecuador: Low Broadband Penetration Rate Opens Door for Fixed and Mobile Operators” offers a profile of the country's telecom, media and technology sectors based on data from Pyramid's research in the market. It provides competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services and monitors the introduction and spread of new technologies.

In December 2009, Analysys (News - Alert) Mason announced that the mobile broadband market is expected to continue growing over the next five years and will create new revenue opportunities for mobile network operators. By 2014, there will be 148 million mobile broadband connections in Europe, and these will make up close to 50 percent of all broadband connections in the region.

Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.

Edited by Janice McDuffee


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