From the SIP Trunking Experts

February 13, 2013

Argentina's Telecommunications Services Market Will Grow 31 Percent by 2017

By Jacqueline Lee Contributing Writer

Telecoms in Argentina are on the verge of a huge expansion. According to Frost & Sullivan (News - Alert), the market will grow 31 percent over the next five years from $18.44 billion to $26.58 billion.

Major drivers of expansion include the Argentinian government’s Argentina Connected Action Plan. Other factors such as 3Gmobile networkexpansion, intensifying competition and multiple-play bundles are also pushing growth in the region.

Like most countries, Argentina has seen a drop in voice services usage. To compensate, telecoms are offering triple-play bundles that include voice, television and data.

Even if an Argentinian telecom can’t deliver television, it can deliver content over broadband to its customers. Since users can get content over broadband at a lower cost, cable companies have had to lower their prices in response.

Frost & Sullivan analysts expect mobile data services adoption to increase thanks to the expansion of HSPA+ and LTE (News - Alert) networks. “It will also be reinforced by the provision of geolocation services and mobile commerce, increasing adoption of smart devices and lower-priced services,” predicted Frost & Sullivan ICT industry analyst Maria Agustina di Genaro.

Companies in the region will focus on a three-pronged strategy. First, companies will converge services such as bundled data and voice services. Second, telecoms will work to retain their client base through an increase in value-added services. Finally, companies will focus on migrating prepaid customers to postpaid services by offering attractive promotions.

"Alternative plans, bundles, and economy lines will help companies sustain their client base in the short term; however, voice over Internet protocol (VoIP) and mobile telephony are likely to drive substitution in the long term,” Di Genaro pointed out.

Di Genaro also predicts that wireless networks will become the predominant infrastructure that companies use to service rural, low-income and remote areas of the country. Wireless networks will also allow companies to augment their mobile offerings with fixed telephony.

Argentinian telecoms still have to deal with a regulated tariff, along with delays on spectrum auctions. Also, the increased competition among telecoms will not trickle down to rural areas and small cities.

Edited by Ashley Caputo