Economic Contribution of Latin America's Mobile Ecosystem Will Grow by More Than $30 Billion by 2025

According to its GSMA Intelligence's latest report on the state of the mobile economy in Latin America, the research arm of the GSM Association (GSMA), a UK-based organization that represents the interests of mobile operators worldwide, says "The mobile industry in Latin America continues to play a crucial role in the response to Covid-19. Mobile networks have enabled social and economic activities to continue. People have relied on the internet to stay connected to friends and family, access educational and health services, and work remotely."

Growth in subscriber penetration and smartphone adoption remains strong, the report notes. GSMA Intelligence estimates Latin America will have 485 million unique mobile subscribers by 2025 (73% of the population), up from nearly 450 million by the end of 2021. "Around half of new subscribers will come from Brazil and Mexico during this period. There will also be strong growth in underpenetrated markets such as Guatemala and Honduras."

The report, which is available in English and español, importantly adds:

Smartphone connections in Latin America will reach 500 million at the end of 2021 – an adoption rate of 74%. The next four years will see almost 100 million additional smartphone connections in the region, taking adoption above 80%. This will spur mobile internet adoption, enabling more people to access digital services for the first time. These achievements will be underpinned by operators' continued investment in network infrastructure. Between 2020 and 2025, mobile operators in Latin America will invest more than $73 billion in their networks, with an increasing share of this 5G-related.

While 4G continues to dominate the Latin American market, accounting for close to 70 percent of total connections at the end of 2025, the report encouragingly asserts that "5G momentum is building, with further commercial 5G services launched in 2021." GSMA Intelligence points out that "While mobile operators wait for access to new spectrum, they are laying the groundwork for the 5G era through investments in accompanying infrastructure, such as fiber, and partnerships to trial and develop new applications."

On the topic of the mobile industry driving economic growth and social development, the report explains that "In 2020, mobile technologies and services generated 7.1% of GDP in Latin America – a contribution that amounted to more than $340 billion of economic value added." Moreover, "The mobile ecosystem also supported more than 1.6 million jobs (directly and indirectly) and made a substantial contribution to the funding of the public sector, with more than $29 billion raised through taxes on the sector in 2020. By 2025, the economic contribution of the Latin American mobile ecosystem will grow by more than $30 billion, as countries in the region increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services."

On the transformation of the enterprise sector, GSMA Intelligence says "As a result of mobile operator activity and partnerships, total IoT connections in Latin America will amass at a hastening pace, reaching close to 1.2 billion in 2025. Growth will be relatively faster in the enterprise IoT market, with a notable increase in the adoption of smart buildings solutions (forecast to record a CAGR of 24% between 2020 and 2025)." Furthermore, "IoT applications have the power to make a meaningful contribution to the UN's Sustainable Development Goals (SDGs) by facilitating carbon emissions reductions, while improving safety and supporting economic development."

Lastly, the report discusses decisions policymakers in Latin American can make to help shape the connected society. "The pandemic has emphasized the need for connectivity and the critical role of mobile technology. Now is the time for governments to reassess the business and regulatory environment for mobile services in order to accelerate investment and innovation for a connected society."

Infographic: GSMA Intelligence

What opportunities are you seeing in Latin America's mobile economy?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.