Fiber to keep Latin America's fixed broadband expanding, while pay TV declines

Residential fixed broadband coverage in the Latin America and Caribbean (LAC) region continued to expand in 2024, as demand for fast connectivity remains high and operators continue to expand fiber-to-the-home (FTTH) availability. Growth could start to decelerate in the coming years, however, as economic constraints put a damper on the market regionwide.

According to S&P Global Market Intelligence Kagan estimates, fixed broadband subscribers increased by 5.9% across the region in 2024, after a 4.0% increase in the previous year. That represented a 54.8% penetration rate at the end of the year, up more than two percentage points from 2023's 52.6%. Over the 10 years to 2024, the region's residential broadband coverage expanded at a compound annual growth rate (CAGR) in the high single digits.

Our estimates for the seven-year period ending in 2031, however, show that residential fixed broadband adoption rates could decrease, ending that period still below two-thirds of total occupied homes. The realities of a region with an estimated 24.7% poverty level as of 2024, according to World Bank figures, make it difficult for many Latin Americans to afford access to home internet, even as average broadband prices in the region's largest economies have stayed relatively stable or even declined in dollar terms in recent years.

 FTTH drives regional growth

Adoption of fixed broadband across the region has been supported almost entirely by deployment of FTTH, which expanded at a massive 40%+ CAGR in the last decade.

Kagan expects FTTH to continue to expand between 2025 and 2031, at a more moderate mid digit seven-year CAGR.

Legacy digital subscriber line (DSL) subscribers, which in 2014 made up 57.7% of all residential fixed broadband subscribers, decreased at a nearly 15% annual rate through 2024. Several operators across the region have actively decommissioned their older DSL networks, and some countries are looking at a full shutdown of the technology before the end of Kagan's current 2031 forecast horizon.

Coaxial cable services, including hybrid fiber-coaxial (HFC), were initially popularized by pay TV providers' triple-play packages. They represented the leading technology across the region for three years, between 2018 and 2020

HFC had already started to decline by 2022, however, driven both by telecommunications operators expanding their FTTH networks to underserved areas and by traditional pay TV providers migrating their own HFC networks to fiber. The cable technology peaked in 2021 and will continue to subside going forward.

Technology adopton has also progressed at different paces across the region. FTTH as a percent of total occupied homes in our forecast region is in the 60% range. The speed of its advance, driven by expansion into previously unserved or underserved areas, presents an interesting contrast with countries like the United States, where FTTH has had a tougher time displacing preexisting technologies such as cable.

This article is part of a series on Latin America and the Caribbean telecommunications research by S&P Global’s Market Intelligence Kagan division. If you are already a client, click HERE for more.

Traditional pay TV on retreat

As fixed broadband has become more available for Latin Americans and streaming options such as Netflix Inc., Amazon.com Inc.'s Prime Video, and TelevisaUnivision Inc.'s Vix, among many others, continue to draw subscribers, traditional pay TV services have increasingly fallen out of favor, reflected in a continuous decline in subscriptions since 2018.

Pay TV subscribers in Latin America and the Caribbean peaked in 2016, when service penetration reached 42% of regional households. Since then, the sector has declined to a market penetration of 31%.

Kagan forecasts show a continued but slower decline in the industry past 2025.