When it comes to mobile payments, Mexico, the second-largest mobile market in Latin America after Brazil, is ready for reaping. At the end of last year there were 88 million unique mobile subscribers, or 69% of the population in Mexico. There were 104 million total mobile connections, with smartphones making up half.
A new report from GSMA, ‘Country Overview: Mexico – Mobile Driving Growth, Innovation and Opportunity’, projects smartphones will account for 70% of the 129 million connections expected by 2020.
The study also found the mobile industry in Mexico generated $40 billion in value-added terms last year, accounting for almost 3.5% of the country’s GDP.
The study finds that recent market reforms in Mexico have served to increase mobile affordability, competition and investment. This has resulted in rising subscriber penetration levels and accelerated uptake of advanced mobile services and smartphones.
GSMA Intelligence forecasts that the total contribution of the mobile sector to the Mexico economy will increase from $40 billion in 2015 (3.5% of GDP) to $52 billion by 2020, representing 3.8 per cent of projected GDP by this point. This GDP impact includes both direct and indirect contributions, and the productivity gains made possible by mobile technology and services.
Approximately 335,000 jobs were supported by Mexico’s mobile industry last year, including 170,000 directly by the mobile ecosystem and approximately 165,000 indirectly in other sectors of the economy.
Mexico’s mobile operators are expected to invest $11 billion between 2016 and 2020, focusing particularly on building-out 4G network coverage. It is forecast that national 4G coverage (as a percentage of the population) will rise from 52% in 2015 to 85% by 2020.
Mexico is considered to have one of the most dynamic start-up scenes in Latin America, attracting a high share of risk capital relative to its regional peers. The report highlights that in the last two years, Mexico received more than $1.7 billion in venture capital (VC) funding, the second-highest investment in Latin America (behind Brazil) and representing about a third of all VC funding in the region. Mobile is considered the key technology in helping Mexico realise its innovation potential, supporting the development of entrepreneurs and start-ups. Almost 70% of VC investment in Mexico over the last two years concerned deals in the internet and mobile sectors.
Mexico’s mobile operators are increasingly becoming involved in emerging areas such as the Internet of Things (IoT) and machine-to-machine (M2M), digital commerce, mobile security and all-IP communications. M2M technology is being introduced into several sectors, for example in smart meters, digital signage, telecare, remote monitoring, mobile payments and connected cars. The number of cellular M2M connections in Mexico is forecast to more than triple over the next five years, increasing from 4 million in 2015 to 13 million by 2020.
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