Tigo Panamá has announced plans to invest $100 million this year in order to expand and upgrade its fiber optic coverage and mobile networks. Although this investment is slightly less than the annual average it has spent in the past four years, which amounted to $475 million, the company is still focusing on increasing its investments in fiber optics.
Tigo intends to reach 90,000 homes this year with fiber optics in areas such as Puerto Armuelles, Colón, Panama City, the northern region of Penomé, the Azuero region and San Miguelito, according to ANPanamá.
A recent analysis by Fitch of Tigo’s fixed operations in Panama showed that the company’s investments for this year are expected to be equivalent to 17% of its revenues, which is a small decrease compared to previous years. Tigo is one of the major investors in Panama’s telecommunications industry. Regulator Asep estimates that the total investments in the country’s telecom market by the end of 2022 will be $276 million, while revenues are projected to reach $1.12 billion. In 2019, Tigo’s parent company, Millicom, invested over $2 billion to acquire Cable Onda and Movistar in Panama.
“Low broadband penetration in Panama creates growth opportunities for the company,” Fitch said with respect to Tigo.
Fitch reported that Tigo had reached nearly 900,000 homes passed with fiber by the end of 2022. The agency anticipates that the company will accelerate its investments to increase the number of homes passed in the future, with a focus on also having more homes connected to the network. Fitch estimates that Tigo will add 80,000 homes passed in 2023, which is slightly lower than the number announced by Tigo. In the following years, the number of additions is expected to decrease to 20,000 per year.
“In contrast, the mobile market, despite recently announced industry consolidation, remains competitive, and growth opportunities are becoming more challenging as it matures,” the Fitch report reads.
Fitch predicts that the revenue-generating units (RGUs) in fixed services will increase by 4% from 2023 to 2024. Additionally, the growth of prepaid mobile subscribers will be moderate, while postpaid subscribers will experience growth in “the mid-single digit zone.”
Tigo has stated that a portion of its 2023 investments will go towards increasing LTE capacity and expanding coverage to new areas. The company has also stated that the central part of its network is already prepared for 4G. According to Millicom’s data for the third quarter of 2022, as of the end of September, the company had 2.4 million mobile users and 469,000 fixed income-generating units.
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