Latin America’s mobile technologies generated 5% of GDPStaff Writer | November 3, 2017
Latin America’s mobile ecosystem generated 5% of gross domestic product (GDP) last year, according to a new GSMA study.
LatAm A new GSMA study
The report noted that mobile’s contribution to the regional economies has been driven by rapidly rising 4G and smartphone adoption.
At the end of 2016, there were 451 million unique mobile subscribers across Latin America, concentrated in markets such as Brazil (33% of total), Mexico, (20%), Argentina (9%), and Colombia (7%).
Around 60 million new subscribers are due to be added by the end of the decade, by which point more than three-quarters of the region’s population will be mobile subscribers, up from 70% in 2016.
The region’s subscribers are migrating rapidly to smart devices and networks.
Smartphones accounted for 59% of Latin American connections in the first half of 2017 and are forecast to make up 71% of the total by 2020.
Meanwhile, after a slow start, 4G networks have now reached critical mass in the region, providing coverage to 70% of the population.
As of June 2017, Latin American mobile operators had launched 108 4G networks in 45 markets; 4G is on track to account for 42% of connections by 2020, bringing it on par with the global average.
The first commercial 5G networks in the region are expected to be switched on in 2020 and are forecast to provide coverage to 50% of the population by 2025.
Latin America’s mobile ecosystem is expected to be a growing contributor to the region’s economy over the next few years, forecast to contribute $320 billion (€274.69 billion) in economic value in 2020, equivalent to 5.6% of GDP, up from 5% in 2016.
The sector also supported 1.7 million jobs last year, directly and indirectly, and makes an important contribution to the funding of the public sector, with almost $34 billion (€29.19 billion) raised in 2016 in the form of general taxation, including VAT, corporate taxes and employment taxes.
As a result of rising smartphone adoption and 4G usage, the mobile ecosystem in Latin America provides a large, scalable platform for entrepreneurs and innovators.
Venture capital and private equity funding has been especially strong in 2017, with more transactions in the first half of 2017 than in all of 2016, which itself was a record year.
With nearly 350 million mobile internet subscribers, the Latin American market is larger than the U.S. ■