Industry Trend Analysis - New Spectrum To Hinder Claro's Dominance - JAN 2018

BMI View: The upcoming spectrum auction will be an opportunity for Orange and Viva to erode Claro ' s dominant grip on the market. The Dominican mobile market is centred on advanced 4G networks, whose capacity will have to be upgraded to cope with data demand growth.

Dominican regulator Indotel will auction 30MHz of spectrum in the 1700/2100MHz band (AWS) that were not assigned in the 2014 spectrum auction. These spectrum blocks will be particularly interesting as operators look to provide advanced 4G and dedicated mobile broadband services. This development plays out our regional view that regulators in Latin America and the Caribbean will be looking to make more spectrum available to spur development of the telecoms sector ( see ' Competition, New Services And Increased Spectrum Availability Will Drive Growth ' March 23 2017).

We expect Altice-backed Orange (now merged with Tricom) to be most interested in these spectrum blocks. As rivals Viva and Claro have deployed advanced 4G MIMO networks, Orange's standard LTE network is at a competitive disadvantage. Extra spectrum would be useful to provide advanced services through upgraded 4G networks. Altice has shown particular interest in the Dominican Republic since end-2016, investing to upgrade its wireline and 4G LTE coverage. We believe it will want to use the extra spectrum in tandem with improved wireline and mobile networks to erode Claro's dominant market share, which stood at almost 54% in Q217.

3G/4G Growth Reflects Data-Hungry Customers
Dominican Republic - Mobile and 3G/4G Forecasts
f = BMI forecast. Source: Operators, Indotel, BMI

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