Industry Trend Analysis - New Spectrum To Allow Better LTE Monetisation - SEPT 2017

BMI View: Additional spectrum will allow Movistar and Claro to improve the coverage and quality of their network s , putting them on a more level playing field with incumbent ICE . T hey will be able to expand their LTE and advanced services offering s , opening up new revenue streams.

Costa Rica's telecoms regulator, Sutel, has awarded Telefonica-owned Movistar and America Movil-owned Claro a total of 70MHz of spectrum in the 1800MHz and 1900/2100MHz bands. There were no bids placed by Millicom-owned Tigo, which runs a wireline-only operation in the country, meaning an opportunity to increase competition has been missed. Nevertheless, this is still a positive development for the market.

Movistar acquired two blocks in the 1800MHz band and another two in the 1900/2100MHz band. Claro received two in the former band and one in the latter. The regulator raised a total of USD43mn for the seven blocks auctioned. Our view that Latin American telecoms regulators should make more spectrum available to avoid constraining growth in the market is playing out through developments such as this ( see ' Spectrum Auctions: A Risk/Reward Perspective ' October 21 2016). More spectrum allows operators to offer new and better quality services.

3G/4G Dominates Broadband Landscape
Costa Rica 3G/4G And Broadband Forecasts
e/f = BMI estimate/forecast. Source: Sutel, BMI

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