Executive summary
Panama’s long-term economic growth susceptible to alternative canal route across Nicaragua
Panama has benefited from maintaining one of the region’s highest GDP growth rates in recent years. The country’s economic prospects remain promising despite a dip in GDP growth anticipated for 2014. Nevertheless, strong growth in recent years has had a positive knock-on effect on the country’s telecom market, which has also grown steadily and attracted considerable investment. In 2014, telecom revenues are expected to have broached $1 billion for the first time, with mobile services and broadband being the fastest growing sectors.
Panama’s fixed-line teledensity is well below average for the region, though it is rising steadily from a relatively low base, largely due to alternative operators making use of cable or fixed-wireless networks.
Competition remains limited in the broadband sector, where the incumbent Cable & Wireless Panama has resisted unbundling its local network and as a result has secured a virtual monopoly in the delivery of DSL access. The only cross-platform competition is from cable modem and WiMAX services.

The mobile sector has flourished in recent years, and the popularity of having multiple SIM cards has pushed mobile penetration rates to above 190%, considerably higher than the regional average. The arrival of two new mobile players at the beginning of 2009 resulted in additional competition and steep price reductions which have shaken the market.

Digicel Panama launched operations in 2008, followed by America Movil’s Claro in 2009. This ended the duopoly long enjoyed by Cable & Wireless Panama and Telefonica’s Movistar.
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