While net additions in the mobile market are lower than quarters one and two of 2011, Argentina has seen a strong Q311, with penetration reaching 134% and ARPUs rising. In Q311 869,000 new subscribers were added, and 56% of these were in the postpaid sector – indicating that higher value contracts are expanding in the market. Smartphones continue to proliferate, driving revenue growth and the expansion of mobile services and data usage.

Argentina Telecommunications Market Report Q1 2012

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Information relating to the proportion of revenues for data services shows Movistar reporting that 38% of its revenues came from non-voice services in Q311, while Telecom Personal reported that 53% of revenues came from non-voice services in Q311 – a substantial increase on 39% a year earlier. Claro is understood to be slightly lower, due to the significant proportion of prepaid subscribers, although the company does not report figures for 3G services separately.

MVNO Nuestro continues to expand, entering the market in the Santa Fe region. This MVNO aims to offer low-cost mobile services, which would allow the current MNOs to focus their attention on securing higherend customers.

In the internet market, we have seen an explosion in the wireless and satellite connections, whose number almost matches that of ADSL connections. This, again, is driven by the explosion in mobile broadband availability, and the continuation of the government’s broadband plan, Argentina Conectada, pushes this figure ever higher. ADSL connections continue to grow also, as the plan brings connections to the least touched parts of the country.

The market for broadband in the country is dominated by the main players in the fixed-line market, namely Telefónica de Argentina SA (TASA) and Telecom Argentina. However, alternative operators are emerging, and are much stronger than in the fixed-line market. TASA is the market leader with 1.57mn broadband accesses in Q311, up from 1.5mn in Q211. Telecom Argentina reported 1.407mn in Q111, 1.457mn accesses in Q211, and 1.505mn in Q311. It seems Telecom Argentina may be narrowing the gap with TASA. Telecom Argentina grew strongly in Q311, and increased fixed service revenues by 15%. This growth is powered by broadband, believes BMI, considering that fixed telephony lines are declining.

Wi-Fi will play an increasingly important role in connecting urban Argentineans. Q411 saw Spanish Wi-Fi connectivity company Gowex sign five agreements worth a total of EUR12mn with Argentine public entities. These new contracts come following the success of its Wi-Fi rollout across the capital of Buenos Aires, in the early part of 2011. It also signed an agreement to expand in the Chilean market. BMI believes these new contracts mark a further development in Gowex’s strategy to diversify into the Latin American market, following slow growth and a dismal outlook in its home market, Spain. We welcome this strategy, and we believe the company’s growth potential through the Latin American continent is huge, as the growth in 3G devices in the region takes off.