Urban Guatemala Country Overview

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Mobile Communications in Urban Guatemala

As in much of Latin America, Guatemala’s mobile communications market has seen exponential growth after years of low access levels. According to the International Telecommunications Union and Guatemala’s La Superintendencia de Telecomunicaciones (SIT), the number of mobile phone subscribers jumped from 2 million in 2003 to almost 16 million subscribers by July 2009. [1] What's more, much of this growth has taken place in the past few years. SIT reported that the number of mobile phone subscribers increased by almost 26 percent in 2008 alone.[2]

Helping this growth was the introduction of low cost prepaid mobile packages that have given low-income consumers the flexibility to use a phone only when they can afford it.[3] The large number of reported subscribers, more than the 2009 estimated population of 14,000,000, reveals how many mobile users purchase multiple pre-paid SIM cards in order to take advantage of promotional offers. According to SIT, around 95 percent of all mobile subscribers use prepaid packages instead of postpaid packages that require a regular level of income commitment.

Guatemala’s three leading mobile service providers are COMCEL Guatemala, otherwise known as TIGO, Claro, owned by Sercom, and Movistar, which is owned by Telefónica. All three providers entered Guatemala’s mobile market between 2003 and 2004. The entrance of these new players has helped to push the recent expansion in mobile access. The TIGO and Claro brands are the top providers with Claro holding 37.3 percent of the market and with TIGO possessing 37.2 percent market share at the end of the quarter of 2009.

Chart 1


Since 2001, growth in mobile telephony access has outpaced fixed land line access, especially in rural areas. The penetration of the mobile phone market in rural areas has been limited, whereas in urban areas they have become commonplace. According to the AudienceScapes 2009 urban survey, 82 percent of respondents reported having home access to a mobile phone.

Where the mobile communications market has failed to extend services into many rural areas, the Guatemalan government in cooperation with the World Bank has sought to extend fixed line and/or mobile services to underserviced areas. As a multi-million dollar subcomponent of the “Project to Support the Rural Economic Development Program for Guatemala” the Guatemalan government will identify priority rural areas where the private sector has not provided or built infrastructure. Within this process the government will competitively award subsidies to private operators to install public payphones in rural communities with populations greater than 400 people. The projected result of this component of the overall project is estimated to increase telephony in rural areas by 30 percent granting access to 3.5 million people. The overall project is set to be completed in 2013. [4]

Chart 2

SMS-text messaging is by far the most popular mobile function due to its relatively cheap cost compared to voice time. SMS has also become an important means of gathering news and information for some people. Fifty-one percent of young adults (16-29) said they receive SMS messages about news at least weekly. Interestingly, a little over a quarter of all mobile phone users said they use their phone to listen to the radio.

Other activities that require advanced data services such as watching video, accessing the internet or email are used infrequently, as they are generally more expensive. However, there is potential for increased use of these activities. It was not until late 2008 that third generation (3G) mobile network services were introduced outside of Guatemala City. In the fall of 2008 Tigo introduced its new 3.5G network that provides high speed mobile internet access and video calls that covers 65 cities, including 22 provincial capitals. In fact, Tigo’s mobile internet service will be available to prepaid subscribers in packages starting at GTQ25 or roughly $3.00. [5]

Chart 3


Age does have some correlation to whether an individual is a mobile phone user, as the likelihood that an individual is a user declines with age. While 88 percent of young adults were mobile phone users, only 68 percent of those 60 and older were users. On the other hand, mobile phone use is nearly equal for men and women.

 


 

[1] “Crecimiento de la telefonía fija y móvil en Guatemala.” Superintendencia de Telecomunicaciones. Guatemala City, Guatemala. http://www.sit.gob.gt/index.php?page=crecimiento-de-la-telefonia-fija-y-movil-en-guatemala.

[2] “Guatemala: Cellular Phone Service Grows by 25.64% in 2008”. Prensalibre.com. 8 May 2009. Accessed December 2009. http://www.prensalibre.com/pl/2009/mayo/08/312632.html

[3] “Guatemala’s Mobile Subscribers pass 10 million”. ICT Statistics Newslog. International Telecommunication Union 15 January 2008. Geneva, Switzerland. http://www.itu.int/ITU-D/ict/newslog/Guatemalas+Mobile+Subscribers+Pass+Ten+Million.aspx.

[4] “Project to Support a Rural Economic Development Program”. The World Bank Group. Washington, D.C. Accessed December 2009. http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P094321.

[5] “Tigo lanza red de tercera generación”. Elperiodico.com. Guatemala City, Guatemala. 29 August 2009. Accessed December 2009. http://www.elperiodico.com.gt/es/20080829/economia/68007