Uruguay Telecom - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

Key Highlights

• In spite of having a well-established cable network in all mid- and large-size cities, the Uruguayan government historically prohibited cable companies from offering Internet access through their systems. As a result, Uruguay and Cuba were the only countries in the Americas that lacked this crucial aspect of the Internet access ecosystem. However, in June 2022, the Uruguayan government made a significant change by allowing selected cable providers to enter the market, thereby putting an end to Antel's monopoly on wired Internet services.
• Uruguay possesses a highly developed telecommunications market, boasting exceptional infrastructure and one of the most impressive rates of broadband penetration in Latin America. The prominent Internet Service Providers (ISPs) in Uruguay include ANTEL, Claro, Dedicado, and Movistar. Antel dominates the mobile market, followed by Telefónica's Movistar and América Móvil's Claro. All three operators offer mobile broadband services through their 3G and LTE networks. These operators have successfully achieved nationwide 3G coverage, resulting in a continuous increase in the number of mobile broadband subscribers. The ongoing advancements made by these vendors are anticipated to propel the growth of the market.
• According to the ITA, ANTEL, the largest telecommunications company in Uruguay, which is state-owned, plans to invest in infrastructure, technology, modernization systems, expansion of connectivity, implementation of 5G, and the development of new digital services. In 2021 and 2022, ANTEL invested USD 161 million, with 80% of the funds earmarked for expanding fiber optics infrastructure in rural areas. Furthermore, ANTEL's market share in mobile services increased as the company managed to attract customers from competitors for the fourth consecutive quarter. These significant developments by operators in the region are expected to enhance market potential.
• Fixed wireless services are predicted to increase in the region in the years ahead. The majority of Uruguay's land area is too distant from urban areas to have access to wired Internet. Fixed wireless ISPs offer a solution for customers in these rural and low-density suburban areas. Additionally, wireless Internet service has given urban Internet users some options in a country where private companies are not permitted to offer alternatives to the state-operated ADSL service, such as cable TV Internet or fiber to the home.
• Uruguay stands out as one of the limited number of nations worldwide that lacks broadband access through cable modems. Despite technologically advanced cable networks and the widespread availability of digital cable TV, data transmission over pay TV networks is prohibited by telecom legislation. Nevertheless, the government has expressed its intention to amend the law, allowing pay TV providers to offer internet and telephony packages through their own networks. These noteworthy developments are anticipated to foster market growth.
• The rise of modern technologies has brought about a digital transformation, resulting in a significant increase in the number of internet users. The affordability of smartphones and the introduction of 5G-enabled devices have played a crucial role in driving the demand for mobile Internet connections. Uruguay's telecommunications sector is particularly focused on the growing 5G market, expecting a boost in local service revenue as more users take advantage of faster download speeds to access content. Moreover, the wider availability of high-speed Internet has also stimulated the creation of innovative applications and services, contributing to the overall expansion of the market.

Uruguay Telecom Market Trends

Rising Demand for 5G is Expected to Drive the Growth of the Market

• The city's dedication to remaining at the forefront of technological progress is evident in the swift proliferation of 5G networks in Uruguay. The extensive adoption of 5G services is anticipated to open up fresh avenues for innovation in sectors such as healthcare, education, and smart city initiatives. With the increasing adoption of 5G technology by businesses and consumers alike, the need for fast and dependable internet services is expected to continue to surge, thereby driving the expansion of the Uruguayan telecom market.
• GSMA predicts that by 2030, 5G will account for 57% of all mobile connections in Latin America, a significant increase from the current 2% penetration. The report also forecasts an 11% penetration rate by 2025. In Uruguay, specifically, 5G penetration is expected to reach 13% by 2025 and expand to 65% by 2030. As the adoption of 5G services continues to grow among consumers, there will be a greater demand for reliable and high-speed mobile data services, leading to increased investments in network infrastructure and technology upgrades.
• Moreover, GSMA also highlighted that Uruguay's 5G networks will extend coverage to 99% of the population by 2030, a substantial increase from the projected 25% in 2025. The number of 5G subscribers in Uruguay is projected to reach 4 million by 2030, a significant rise compared to the 900,000 subscribers projected in 2025. These factors are fueling investments in the country's telecom sector, creating diverse opportunities for market players. For instance, Antel, the state-owned telecommunications company and market leader in Uruguay, has begun to ramp up its investments in mobile and fixed networks as part of the country's 5G rollout. These investments are expected to drive further advancements in the region and contribute to significant market growth.
• Furthermore, Antel, the state-run operator in Uruguay, has successfully installed a total of 300 5G sites throughout the country. The company has set a target to expand this network to 500 5G sites by February 2025. By September 2023, Antel had already activated 5G technology in all 19 departmental capital cities in Uruguay. Additionally, in June 2023, the operator began implementing 5G technology in Uruguay using spectrum in the 3.5 GHz band. These investments made by Antel are anticipated to propel the growth of 5G in the country's telecommunications sector.
• Uruguay's telecommunications regulatory body, Ursec, had allocated a 100-megahertz spectrum block to Antel during a prior spectrum auction. During the 5G auction held in May 2023, competing operators Claro, a subsidiary of Mexican telecommunications giant America Movil, and Movistar, owned by Spanish telecom company Telefonica, successfully obtained 5G frequencies. As the only participants in the bidding process, each operator secured a 100-megahertz block in the 3.5 GHz band, amounting to a combined total of USD 56 million. Such developments within the region to increase the adoption of 5G are expected to drive market growth.
• According to ITA, starting from June 2022, a number of cable operators have been authorized to provide internet services, thereby putting an end to the monopoly held by the state-owned telecommunications company, ANTEL. In May 2023, Uruguay organized a spectrum auction for the 3.5 GHz band, granting a 25-year license for 5G applications. The spectrum was awarded to the three existing telecommunication operators: ANTEL, which is state-owned; Telefonica from Spain; and América Movil Claro from México. These operators are currently making preparations to roll out their 5G services. ANTEL outlined plans to invest USD 43 million in the deployment of 5G technology throughout 2023. Such factors are expected to drive the growth of 5G in the country.

Voice Services are Expected to Grow

• The telecommunications market in Uruguay is both small and advanced, and it consistently experiences Y-o-Y growth. It stands out in terms of 4G penetration, fiber penetration, and usage of voice services. With the investments made by market players and the increasing internet penetration in the country, both wired and wireless services are expected to expand. Due to the majority of Uruguay's landmass being located far from cities, wired internet access is limited. Consequently, the increasing investments in wired services are expected to be the driving force behind the growth of this segment.
• Voice communications continue to be crucial in both personal and professional settings as communication networks transition to 5G. Uruguay has ambitious plans to invest significantly in infrastructure, technology, and modernization systems, expanding connectivity, implementing 5G, and introducing new digital services. Over the past few years, there has been a strong expansion in wireless voice services in the region, and this trend is expected to continue in the foreseeable future. The continuous investments in digital infrastructure and the growing demand for 5G adoption services are expected to fuel further growth in this sector.
• Uruguay has recently given the green light to the 2025 Digital Agenda, which serves as the nation's blueprint for upcoming digital advancements. Spearheaded by AGESIC, Uruguay's e-Government and Knowledge Management Agency, this initiative will open doors for various sectors such as software, hardware, telecom, and network services. Key components of the plan involve extending fiber-to-the-home (FTTH) networks to areas with under 3,000 residents, allocating additional spectrum bands for mobile technology, and enhancing 5G coverage. Such significant developments in the telecom sector are expected to increase opportunities for the various market players.
• According to the ITA, despite the high mobile penetration rate of 94% in the country with LTE-4G coverage, there is still potential for growth through the introduction of new services, particularly targeting smartphone users. The content aimed at teenagers and children is experiencing significant growth, with all three mobile carriers providing LTE-4G services and preparing for the upcoming 5G technology. Uruguay is set to enhance its emphasis on Internet of Things (IOT) development, with both public and private entities collaborating to establish the "Open Digital Lab" as a testing ground for IOT technologies and applications. According to ITU, in 2022, Uruguay had a total of 1.26 million fixed telephone subscriptions, representing 36.77 subscriptions per 100 inhabitants.
• Moreover, as the number of 5G-enabled devices being manufactured increases, there will be a simultaneous rise in the requirement for wireless networks. The escalating investments in 5G technology and the endeavors of suppliers to enhance their services will lead to a surge in the need for wireless voice services. As an illustration, Uruguay held a spectrum auction for the 3.5 GHz band in May 2023, granting a 25-year license for 5G purposes. The significant progress achieved by global suppliers in this area is expected to enhance the expansion of this industry.

Uruguay Telecom Industry Overview

• January 2023 - Antel, Uruguay's top mobile operator, revealed its collaboration with VMware Inc. for a trial focused on a specific use case. This trial involves the utilization of the VMware Telco Cloud Platform to facilitate a Proof of Concept (PoC). The partnership between Antel, VMware, and local partner AT Innovando Juntos made this PoC a reality. Together, these three companies are dedicated to assisting Antel in constructing a cutting-edge 5G network that can cater to the needs of both consumers and enterprise customers in Uruguay.

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