Mobile Landscape in Nicaragua

Nicaragua's mobile communications sector is highly concentrated. The market is currently lead by Movistar Nicaragua and Claro Nicaragua, with a total combined market share of 99.6% as of year-end 2018; Chinese operator Xinwei, which entered the market in 2016 under the Cooltel brand, has yet to achieve expected growth and closed 2018 with only about 25,000 subscribers.

Millicom just announced it has closed the acquisition of Movistar owned by Telefonía Celular de Nicaragua, S.A., the number one mobile operator in the country, and will be adding it to the its brand TIGO Nicaragua. 

This is the first transaction to close since Millicom announced in February an agreement to acquire three subsidiaries of Telefónica in Central America in Panama, Costa Rica and Nicaragua.

Telefonía Celular de Nicaragua, S.A. adds approximately 4 million mobile customers to TIGO with a 4G network that is accessible to 51% of the population in Nicaragua. 

The deal accelerates the execution of Millicom’s fixed-mobile convergence strategy, it helps consolidate the company’s leadership position in Central America, and it diversifies and balances the geographic footprint of the company in its mission to build digital highways and opportunities therefore connecting more users and developing communities throughout the region.

The agreement was initially struck in February to buy three Central American units from Telefonica for $1.7 billion. Deals for Telefonica’s operations in Panama and Costa Rica are still undergoing regulatory review.

Millicom says the newly acquired assets complement its operations in Central America, and that it will now be able to cross-sell mobile services to its existing cable customers and cable services to Telefónica’s mobile customers.

All of the three Central American countries have among the highest disposable income levels in the region, but penetration rates for digital services are relatively low.

Millicom operates in Bolivia, Colombia, El Salvador, Guatemala, Honduras, and Paraguay under the Tigo brand, serving more than 50 million mobile telephone customers and 3.3 million households.

The chart above gives a good summary of the Spectrum in use in Nicaragua. At present 3G and 4G is in use but the coverage needs improvement in the future. 

Related Posts:

• Millicom targets Leadership Position in Central America with acquisition of Telefónica Subsidiaries

Millicom targets Leadership Position in Central America with acquisition of Telefónica Subsidiaries

Millicom announced last week that it has closed the acquisition of Telefonía Celular de Nicaragua, S.A., the number one mobile operator in the country, adding to its existing cable operation of TIGO Nicaragua. This is the first transaction to close since Millicom announced in February an agreement to acquire three subsidiaries of Telefónica in Central America in Panama, Costa Rica and Nicaragua.

Telefonía Celular de Nicaragua, S.A. adds approximately 4 million mobile customers to TIGO with a 4G network accessible to 51% of the population in Nicaragua. The transaction accelerates the execution of Millicom’s fixed-mobile convergence strategy, it helps consolidate the company’s leadership position in Central America, and it diversifies and balances the geographic footprint of the company in its mission to build digital highways that connect more users and develop communities throughout the region.

For people who are not aware, Central America consists of 7 countries, Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. Of these, Millicom is present in 5 of them with their brand Tigo.

This transaction in Panama, Costa Rica and Nicaragua will allow Millicom to accelerate its Fixed Mobile Convergence (FMC) strategy.

In Panama, after the acquisition:

• #1 mobile operator in a four-player market with 1.6 million customers
• 4G network covers 74% of population
• Revenue and Adjusted EBITDA CAGRs of approximately 4% and 7%, respectively, in 2015-2018, in US dollar terms
• 2018 revenue of $223 million and Adjusted EBITDA of $90 million, resulting in a margin near 41%
• Dollarized economy and investment grade country increasing Millicom’s US dollar revenue sources

In Costa Rica, after the acquisition:

• #2 mobile operator in a three-player market with 2.4 million customers
• 4G network covers 85% of population
• Revenue CAGR of approximately 13% in 2015-2018, in US dollar terms, drove much faster EBITDA growth over the period
• 2018 revenue of $253 million and EBITDA of $60 million, resulting in a margin near 24%

In Nicaragua, after the acquisition:

• #1 mobile operator in a two-player market with 4.7 million customers
• 4G network covers 51% of the population
• Revenue has declined at a 2.5% CAGR in US dollar terms in 2015-2018, due in part to a weaker currency and to slower overall economic activity
• 2018 revenue of $232 million, nearly 50% of which are denominated in US dollars, and Adjusted EBITDA of $92 million, resulting in a margin near 40%

Finally, with regards to Spectrum the three countries:

Reasonable amount of spectrum is available for existing 3G & 4G services. Our assumption is that these will increase with arrival of 5G in these countries.

Source.