The economics of mobile telephony in Latin America

The first call from a mobile phone was made thanks to the director of Motorola Martin Cooper in 1973 from a street in New York. The first cell phone to arrive to Peru was in 1990. This model was clearly very distant from the Smartphone as we know it today. In recent years, the telecommunications industry has evolved greatly all over the world. The use of telecommunications has expanded way beyond the cities.

In the following article of Guinea Mobile, we will explore and review the mobile telephony economy in Latin America today and how it works.

To begin with, today we can say that 70% of the population in Latin America have a mobile subscription. This means 440 million users, a very significant number. Today, technology and mobile service companies contribute 7% of GDP in the region, representing an increasingly important industry.

Why is the mobile industry so important?

Digital technology and connectivity are a medium for innovation, which provides the population with access to fundamental tools such as the internet. The mobile industry in Latin America helps improve education. It is important to shorten the digital gap so that the most remote places far away from the cities can also have access to the internet and all of its resources.

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Another relevant area of the mobile industry is communications. It has never been so easy as it is today to be in touch with your family members and coworkers.

Mobile telephony is important because it allows access to information and this leads to an improvement in the quality of life of people. Therefore, the development of the mobile economy and integration potentially generates development in a region.

The mobile economy and economic growth

The mobile economy contributes to economic growth in a very significant way. There are studies that indicate that the spread of mobile telephony in Latin America has directly influenced economic growth in the region. Especially in countries with less developed communications, the expansion of mobile telephony has had a positive impact on GDP growth.

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This can especially be seen in certain regions of the Peruvian highlands. In this setting, professors from the prestigious Spanish university Universitat Oberta de Catalunya were able to make the observation that greater mobile penetration contributes to reduce inequality. This is because the use of mobile telephony helps to improve aspects of the “commercial and productive processes” of rural households, which finishes an increase in their income. In conclusion, in Latin America there is a relationship where more mobile telephony leads to less poverty.

By being connected and reachable, villagers have greater access to employment opportunities. This leads to smalls workers, companies and merchants to participate in new markets.

It may interest you: What is an MVNO or mobile virtual network operator?

Despite the significant growth of mobile subscribers in Latin America over the last few years, there is still a growth margin with a lot of potential to be exploited. The contribution of the mobile phone industry in Latin America has been enormous, from its share in GDP to all the jobs and investments it generates. The mobile economy is a driver of technology innovation in Latin America, and with more connectivity we will have more jobs, education and quality of life. We now invite you to integrate your business and be able to offer telephony services with your own virtual mobile operator.

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