Venezuela: 3G Networks to Dominate in 2014, but Major 4G Deployments Await Auction

Product Synopsis
Although it has one of the highest GDP per-capita rates in the region, Venezuela is characterized by high inflation and an overly complex and strict currency exchange control. This coupled with the devaluation of the bolivar will limit and delay operators' plans to improve network infrastructure and launch new technologies, and will negatively affect growth in the telecom market in the near future. All mobile operators in 2012 received much-needed extra spectrum in the 1800MHz and 1900MHz bands, and are using it to boost their 3G networks and to deploy LTE.

Introduction and Landscape
The Venezuelan telecom services market is highly concentrated, with Cantv-Movilnet and Movistar generating 74.1% of total revenue in 2012 (37% and 37.1%, respectively). We don't see this situation changing much over the forecast period. Consequently, we expect Cantv-Movilnet and Movistar to account for about 74% of total revenue in 2018. Movistar will increase its share of total telecom services revenue from 37% in 2013 to 44% in 2018, as a result of increased efforts to migrate subscribers to more expensive postpaid service plans. As Cantv-Movilnet continues to implement prepaid pricing strategies designed to attract low-income people, the operator's share of total revenue will fall from 37% in 2013 to 30% in 2018. We expect Digitel to expand its revenue share of the market by one percentage point over the forecast period, as the operator gears its mobile offerings to move prepaid customers to postpaid and to foster data consumption.

Executive Summary
Market and Competitor Overview
Venezuela in a regional context
Economic, demographic and political context
Regulatory environment
Demand profile
Service evolution
Competitive landscape
Major market players
Segment analysis
Mobile services
Fixed services
Pay-TV
Convergence
Identifying Opportunities