Argentina's economy has been expanding at a much faster pace than expected, and the economic boom has yet to peak. The telecom market grew by 18% in 2010, and sales are expected to reach more than AR$44 billion (US$10.6 billion) in 2011.
As in other Latin American countries, fixed-line revenues account for a decreasing portion of total telecom revenues, while the share of mobile and data/internet revenues continues to rise. The fastest growing telecom services in 2011 are likely to be mobile broadband and smart phones, which took off in 2010. The increased popularity of smart phones is largely due to the explosion of Twitter and the growth of social networks – especially Facebook.
The country’s regulatory framework encourages competition and supports smaller telecom players. Argentina has adopted a single licence system (Licencia Única), which telecom companies must obtain regardless of the services they wish to provide. Operators must list in their licence applications which services they wish to offer, but can at any time register for additional ones.
Argentina has one of the most solid state-of-the-art telecom infrastructures in Latin America. At 23%, fixed-line teledensity is among the highest in the region. Due to fixed-mobile substitution, however, the number of fixed lines is increasing at a rate that is barely sufficient to keep up with population growth.
The two incumbents, Telefónica de Argentina and Telecom Argentina, dominate the local fixed-line market, but a large number of smaller companies – mostly cooperatives – are also operating, especially in rural areas. The long distance market is highly competitive, and VoIP is well developed.
Argentina is one of the most dynamic mobile markets in Latin America, with penetration rates upwards of 130%. More and more users are signing up for multiple mobile accounts; most Argentineans have prepaid plans rather than contracts, therefore owning two mobile telephones is not a lot more expensive than owning one. Moreover, with the growing popularity of mobile broadband, an increasing number of users require an additional SIM card for their USB modem.
Three mobile operators, Movistar, Claro, and Telecom Personal, run a close competition for market share, each one controlling about one third of the country’s mobile market. All three mobile companies offer 3G services nationwide.
Argentina’s internet penetration is twice as high as the world average and close to that found in European countries. Its fixed broadband penetration on the other hand is less than half of Europe’s, although it is – on a par with Chile’s – the highest in the region. Demand for broadband should remain strong; this market has much potential for growth.
The fixed broadband market is divided fairly evenly between Telefónica de Argentina, Telecom Argentina, and Grupo Clarín. ADSL is the main technology, but cable modem occupies a significant place with about one-fourth of the subscriber base.
Argentina’s pay television market is the most mature in Latin America. In fact, Argentina is a world leader in terms of pay TV penetration, with about three homes out of four subscribing to pay TV services. A controversial Audio-Visual Communications Law limits the number of television licences one company can own and allows telephone cooperatives into the pay TV sector.
Cablevisión, controlled by Grupo Clarín, is Argentina’s pay TV market leader and one of the largest cable operators in Latin America. Grupo Clarín has been locked for the past couple of years in a legal battle with the Argentinean government.
