Nicaragua will see Internet broadband revenue more than double over the next five years, going from $22 million in 2011 to $51 million in 2016, according to a new report from Pyramid Research. Nicaragua’s total telecommunications market generated $506 million in revenues in 2011, which was a small increase compared with 2010.
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The research firm noted the country’s telecommunications market offers many opportunities as penetration levels are still low for all services. Mobile operators are in a prime position to bring Internet connectivity to users who can’t afford a personal computer, but may be able to connect through their cellular phone, the report states.
“Broadband penetration in Nicaragua is low compared with the rest of the region, at 1.7% at the end of 2011,” explained Pyramid Research senior analyst Jose Manuel Mercado, in a statement. The main barrier remains the country’s low GDP per capita (approximately $1,030), though Pyramid Research expects broadband penetration to increase to 4.4% by the end of 2016.
Residential broadband penetration reached 6.4% penetration at the end of last year, and are expected to rise to 12.4% percent by 2016. “The deployment of more optical fiber during 2012 will foster adoption, especially among enterprises and high-end users,” Mercado added. “Currently, there is more than 4,000 [kilometers] of optical fiber in the country.”
Fixed voice revenue generated $168 million in revenues in 2011, and are expected to peak in 2012, with total revenue of $171 million. Due to fixed-to-mobile substitution and changes in consumer behavior toward broadband and other communication forms, Pyramid forecasts revenue will drop to $146 million by 2016.
Pyramid also noted that pay-TV services will grow at a CAGR of 6.4% over the next five years, but will remain concentrated in wealthy, urban areas in large cities.
