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Latin telecom is already thriving as smartphones conquer the world

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Participating in a round table discussion at the Mobile World Congress , the CEO of Telefonica ( TEF , quote ) in Latin America, Santiago Fernandez Valbuena, brought out some extremely positive notes on the rate of growth in the region.

Emerging markets will overtake the developed world in number of smartphones over the next five years and IP traffic in the region will increase seven times during the period.

Meanwhile, current penetration of broadband Internet is around 10% with smartphones accounting for a third of new phone sales.

Between these two factors, penetration of broadband Internet could double in the next two years.

Strong companies within the region include America Movil ( AMX , quote ) in Mexico, Telefonica Brazil ( VIV , quote ) and TeleCelular Participacoes ( TSU , quote ).

Emerging market equities have rebounded strongly since the beginning of the year and valuations are not as attractive, but long-term growth remains intact.

Investors in TSU in particular will earn an attractive dividend yield of 4.0% to wait out any short-term price fluctuations, while the other two companies pay out a yield of just over 1%.

Growth in the middle class and disposable income combined with lower relative penetration should drive telecom companies' shares for good long-term returns.

Investors may also look to Internet commerce and other providers as more people spend more time connected through new devices.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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