Boston, MA -- (ReleaseWire) -- 07/14/2014 --Executive summary

Third mobile player set to launch services later in 2014

Nicaragua is the largest and least densely populated country in Central America. The country's significant GDP growth since 2010 belies the low economic base, given that it has the lowest GDP per capita in the region, with some 60% of the population living below the poverty line. As a result, much of the economic drive has been the result of international assistance, particularly from the World Bank and other agencies.

The efforts underway to build a canal between the Pacific and Caribbean, largely with Chinese funding, which will incorporate deep-water ports, , an oil pipeline, railroad and international airport, is an ambitious attempt to bring to deliver greater economic benefits, though the business case for the project remains uncertain.

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Nicaragua's telecoms market has mirrored the poor economic achievements, with fixed-line teledensity and mobile penetration also the lowest in Central America. The broadband market remains nascent, with population penetration at about 1.2%. Most internet users are concentrated in the largest cities because the rural and marginal areas lack access to the most basic telecom infrastructure. A number of internet cafes provide public access to internet and email services, but these are also restricted to the larger population centres.

America Movil's Claro has a clear leadership in all of Nicaragua's telecom sectors, including fixed-line, mobile, broadband, and pay TV. Mobile subscribers overtook the country's main lines in early 2002, and now make up the significant majority of all lines.

Telefonica's Movistar is the only company competing with Claro in the fixed-line and mobile market. In the mobile sector, Movistar holds almost one third of the market, but in the fixed-line sector, it has only about 10% of the country's fixed lines in service.

Due to a weak regulatory structure and bureaucratic delays, further liberalisation has been slow to be implemented. The duopoly situation has dampened the competitive drive, and as a result there has been less effort than in neighbouring countries to improve quality and lower prices. However, other companies operating in the market include the Russian state corporation Rostejnologuii, Yota Mobile and IWB Holding.

The fixed-line market will probably continue to be stable, leaving growth principally in the mobile and broadband sectors. Competition in the mobile sector is expected to improve from late 2014 with the introduction of a new China-based operator following the auction of spectrum in the 1800MHz band. The broadband sector will be the main growth engine given the extremely low existing penetration rate coupled with consumer demand for services. In this regard, the longer-term prospect is promising.

Nicaragua - key telecom parameters - 2012; 2014

Penetration of services:20122014 (e)

Fixed-line5.0%5.7%

Internet users2.9%3.9%

Broadband1.0%1.2%

Mobile86%93%

Market highlights:

- Spectrum allocation in the 1800MHz band to Xinwei Telecom is expected to provide a range of telecom services nationally, and help break the existing market duopoly.

- The commissioned new satellite to provide pay-TV and telecom services should be operational from mid-2015, boosting the availability and scale of services both for the country and region.

- Claro retains a near-monopoly over broadband in Nicaragua since acquiring cable TV company Estesa, which was the only company that offered any meaningful competition. Claro's ADSL and cable modem services are both branded Turbonett Fijo. The cable modem service uses the Hybrid Fibre Coaxial (HFC) network inherited from Estesa.

- Telefonica is preparing to divest itself of its business in Nicaragua and other Central American markets;

- Xinwei Nicaragua receives telecom equipment in preparation for a commercial launch of services later in 2014;

- Telefonica plans to deploy a 3,158 mile fibre cable covering Central America, linking Mexico to Panama via Guatemala, El Salvador, Nicaragua and Costa Rica.Henry Lancaster

- April 2014

- Data in this report is the latest available at the time of preparation and may not be for the current year.

- This report provides a comprehensive overview of trends and developments in Nicaragua's telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors.

Subjects include:

- Market and industry analyses, trends and developments;
- Facts, figures and statistics;
- Industry and regulatory issues;
- Infrastructure;
- Major players, revenues, subscribers;
- Internet, VoIP, IPTV;
- Mobile voice and data markets;
- Broadband (FttH, DSL, cable TV, wireless);

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