Summary
The economic problems that have impacted Northern hemisphere will continue to plague the Southern hemisphere, but the impact on the South has been slower to arrive. Year 2009 will not be as economically painful in Latin America as it will be in other parts of the world.
Analysis
In 2009, the Latin American economy will still grow by 2.5%. Peru will have tremendous growth at 5.5%, while Argentina, Brazil and Columbia will show about 2% growth. Mexico will contract by 0.2%, and Venezuela will have a difficult year with an economic decrease of 3%. The telecommunications market in Latin America is widely varied in its level of modernization and technology. Some countries, such as Bolivia and many of the Central American countries, are working with archaic systems. Other countries, such as Colombia and Chile, are technologically advanced.
Latin America has huge room for expansion. A good measure of technological advancement is the percentage of Internet penetration in a given market. For comparison, in June 2008, Noth America had 73.6% Internet penetration, South America had 27.1% and Central America had 18.5%. Clearly, there is room for technological growth.
Some areas of communications have advanced more quickly then others. Mobile telephony has grown tremendously. 2000 – 2003 saw an average growth rate of 33% in Latin America. Explosive growth of cell-phone subscriptions indicates that emerging markets could rebound in the coming years – giving investors a heads up of impending profits. Some areas of communications, such as location technology, are just emerging. Two-way radio networks are still active. Digital two-way systems and products are available, but relatively slow to make inroads in the region because of higher prices than analog.
While any business venture is difficult and entry into a new region is more difficult, Latin America shows some promise in the short term and significant promise in the long term. Clearly, the more accustomed and familiar with the language and terrain a person is, the more successful the person will be. The technology markets in Latin America are active and ready to be supported by those willing to make the investment in money and time.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
