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How mobile is boosting LATAM economies

In just a few days, Bogotá will be hosting the GSMA’s annual mobile conference in Latin America as part of the Mobile 360 Series. Bringing together an impressive line-up, Mobile 360 LATAM is a giant, multi-day brainstorming session covering everything in the mobile industry from mobile money to the Internet of things to the much awaited 5G.

And we’ll be right in the middle of it. Our CEO Brendan Gill will be chairing the session on future networks, alongside speakers representing operators, tech providers and the GSMA. Aside from looking at the hot topic of 5G's relevance in the region, the session will also dive into the various technologies necessary for deploying 5G and the possible timeline for its roll out.

LATAM before 5G

Though 5G has dominated much of the discussion in the telecom industry lately, a great part of the world, including Latin America is investing heavily in improving coverage and speed for earlier generation wireless services.

Being the second fastest growing mobile region in the world, LATAM has come a long way in terms of 4G availability and speeds; but there is still plenty of room to grow. As another 100 million mobile subscribers come online in Latin America by the end of the decade -- pressuring operators to compete to provide better 4G services - and we could be seeing substantial improvements in LTE very soon.

Here’s a pretty breakdown on where these 100 million-plus subscribers will be coming from (GSMA Intelligence, Mobile Economy in Latin America and the Caribbean 2016):

subscirber growth LATAM GSMASource: GSMA Intelligence, Mobile Economy in Latin America and the Caribbean 2016

The largest market, Brazil was the first to roll out 4G, and though speeds have been gradually improving, 4G accessibility has remained relatively limited. Meanwhile Peru has taken the lead among major Latin American economies in LTE availability, and Mexico is leading that pack in terms of 4G speed (Source: The State of LTE - June 2017).

The bigger picture

Providing better availability and speed is not an end in itself. Improving the communications of millions of businesses and consumers -- whether that means wider coverage, higher speeds, or ease of access – has significant impact on a country’s economy as a whole. It’s basically a virtuous cycle: by opening the tap for information flow, the ecosystem starts promoting innovation, which can in return fuel a more vibrant economy, boost entrepreneurial and startup culture and pave the way for innovative services and applications.

The mobile sector itself provides employment to close to 2 million people, contributes substantially to the GDP (estimated at 5% regionally) and adds close to 40 billion USD to public funds via taxes. But the implications go beyond the industry itself, impacting multiple sectors across the economy (according to the GSMA).

Think mobile money, and the effects of integrating millions into the economy who are currently underserved by traditional financial services (close to 50% according to the GSMA). The mobile money industry in Latin America went into full force in 2016, when it topped the charts as fastest-growing region in terms of growth in registered accounts. And by fast growth we mean multi-fold (from less than a million accounts in 2011, there were over 10 million mobile money accounts registered at the end of 2016).

An increase in mobile and broadband penetration also produces much grander social implications. Getting people online and connected can contribute significantly to delivering health, educational and other government services to more remote areas. According to the GSMA, healthcare services could reach an additional 28.4 million people in Brazil and 15.5 million people in Mexico by the end of 2017 thanks to an increase in mobile penetration. In regions torn by conflict or prone to natural disasters, the effects of deploying better communications are even more profound.

Digital inclusion is not a silver bullet, and will definitely not solve the entire array of socio-economic issues tearing at Latin America. But by making mobile services available and more affordable, we could soon witness the tidal effects it has on boosting the economy and getting the region on a steady track ahead of the 5G launch.