Big Fish in a Small Pond
Market liberalization driving demand for bandwidth in Latin America. 26
In a recent McKinsey emerging markets report entitled, “Broadband’s Latin Future,” Ernesto Flores-Roux, Carsten Kipping, and Alejandro Sanchez stated that Latin America’s broadband market is “bigger and better than it seems.” Despite reports of a telecom slump and a fibre glut, these analysts predicted that by 2004, there will be anything from 3.3 million to 4.3 million broadband subscribers in Latin America. That would make for a growth rate of from 88 to 102 percent in the years since 2000. Whilst small in the absolute sense, the numbers show that broadband has already achieved a substantial penetration rate— from 21 to 43 percent—in the Latin American market, as compared with estimated rates of 38 and 65 percent in the European Union and United States, respectively. The affordability of broadband ser vices will be the main source of difference amongst these regions. The telecom industry in Latin America that was once dominated by government and monopolistic policies is now moving in a different direction, thanks in part to an increase in deregulation and