the swedish firm Millicom International Cellular SA announced an investment of 1 billion dollars to strengthen and expand the operations of its subsidiary you towards fifth generation (5G) services in Guatemala. Tigo is the telecommunications company that participates with 57% of the local market, compared to 42% achieved by the competitor Claro de América Móvil.
In Latin America, Millicom participates in the markets of Bolivia, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Paraguay, and in some of them is the main or one of the two competitors most relevant to the Mexican Mobile Americasuch as the Colombian and Central American markets.
Recently it became known that the investment fund Apollo is analyzing the proposal to buy Tigo, given that this is a company with 50 million customers in the combination of fixed and mobile, and only in 2022 it grew its networks to potentially cover more than 822,000 new homes, until approaching the quota of 13 million among all the Latin American markets where it operates. The company also added 767,000 subscriptions to postpaid cellular services in the year. Millicom, through its regional brand Tigo, invoiced 5.624 million dollars in Latin America during 2022, 32% above the record for the year 2021.
Guatemala, a country with 22.2 million inhabitants and a GDP of 87,000 million dollars in 2021, is a market close to 23 million cell lines and that has been concentrated with the existence of only two large operators, after the sale of Movistar to America Movil in 2019 and the repurchase of the remaining 45% of the shares that Millicom made to gain full control of the Tigo brand there two years ago.
The director of Tigo Guatemala, Mauricio Ramos, told the newspaper Free Press that the 1,000 million dollars planned for its brand will be broken down to five years, between 2023 and 2028. This degree of investment would exceed the regular investment of Tigo Guatemala by 40 million annually, which invests 160 million dollars in the maintenance and growth of its infrastructure.
“We have approved an investment plan for 1,000 million dollars for capital investment in the following five years (…) It must be remembered that when the acquisition of Tigo was made, we stated that this would be for the long term, and today we are looking at the 2023 onwards,” Mauricio Ramos told the Guatemalan newspaper.
Millicom’s investment for its Tigo brand will be used to increase coverage, through infrastructure construction and also to the continued deployment of 5G services in the country.
According to the company, the cell coverage of Tigo reached 80% of Guatemalans in 2022 and the goal is to reach 95% of the population. Its network also has the potential to serve 1.7 million homes, 1.2 million of them through fiber optics, because Tigo is confident that Internet penetration in Guatemala will go from 50% to 75 percent in the medium term. Millicom claims that its wireless networks also cover another 500,000 homes with Internet, TV and phone offerings.
“We launched 5G, which was a milestone in the long history of providing Guatemala with technological innovation and we are very happy that it was the first network in the country and in Central America, which today already covers more than a million and a half Guatemalans who they are navigating that network,” Ramos told Free Press.
“To give an overview, in the mobile segment, we already have a 60% market share, being the first to have launched 5G (…) In the residential business, both Internet and video, we are number one, with a market share of 40% and we continue advancing”, said the head of Tigo Guatemala.
The Telecommunications Superintendence of Guatemala cites that Tigo is the country’s incumbent operator, with 11 million 770,351 mobile users, translated as 57.53 of the local market. While Claro has the mark of 8 million 688,672 clients, which means 42.47% of the Guatemalan cellular market.
One of Claro’s advantages over Tigo has to do with the fact that 57.44% of América Móvil’s Claro users are postpaid clients, compared to 42.56% achieved by Tigo.
For América Móvil, the Central American market, which includes Guatemala, is a business with 16.67 million users and revenues of 2,338 million dollars in 2022.
