Virus impact over each market - telecom operators, government agencies and regulators' responses - revised forecasts for the next 5 years.
Panama has seen a steady increase in revenue from the telecom sector in recent years, including a 2% increase in 2019, year-on-year. Mobile services and broadband remain the key sectors, a trend likely to continue during the next few years in response to operator investments in network upgrades.
Panama’s economic prospects remain promising, with GDP growth during the next few years expected to be above 5%. This growth has encouraged continued investment in the sector, which in 2019 accounted for more than 26% of revenue. Following a period of acquisition activity, the market is dominated a few key players, including Liberty Global’s local unit Cable & Wireless Panamá which provides effective competition to the other regional players Digicel and Claro. Other significant changes to the market include Millicom International having acquired the main cable TV provider Cable Onda for $1 billion at the end of 2018, and its acquisition in February 2019 of Telefónica’s businesses in Panama, Costa Rica and Nicaragua for $1.7 billion.
The mobile sector has flourished in recent years, with the arrival of Digicel Panamá in 2008 and of América Móvil in 2009 ending the duopoly long enjoyed by Cable & Wireless Panamá and Telefónica’s Movistar. Legislation adopted in early 2018 allowed for market consolidation and the reduction of the market to three players, aimed at making more efficient use of available spectrum. Although the number of players remains the same, Tigo Panama has expanded into the fixed and mobile segment by acquiring Movistar.
Internet penetration has grown in recent years and is expected to do so steadily in coming years, partly through consumers responding to government fixed-line projects but principally through the popularity of mobile broadband connectivity.
BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.
Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.
Cable and Wireless Panama, Cable Onda, Claro, Optynex Telecom, Digicel, Movistar
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