Smartphones driving business of telephony in Latin America, according to Moody’s

Best Growth Stock – “Smartphones” are driving the business of the operators of telecommunications in Latin America, although its operating margins are still low, according to a report published Wednesday by the Moody’s rating agency.

“Telecommunications subscribers are migrating to more profitable contract plans that generate higher incomes and lower disconnection of customers, while the appetite of the subscribers by acquiring new equipment continues without slow,” said in a statement that Agency analyst Nymia Almeida on the report.

Moody’s gives a “stable Outlook” to the ratings of the companies in that market, since that he trusts that he will be driven by “the growing penetration of smart phones”, which, according to their calculations, will provide between 5 and 8% of all annual growth of income of the companies of mobile phone services in the region.

Thus, the Agency expected that the industry will grow at an annual rate of 2 to 4%, which attributed also to “solid economic growth in the region” and the increase in the purchasing power of consumers, two elements that favor the transition from traditional phones to Smartphones.

However the Agency recalled that operating margins of the companies of the region are still the great impediment for qualification of the sector does not rise to the “positive” step, as authorities press companies to keep their prices low.

Moody’s also ensures that many Governments of Latin America are pushing operators to expand its broadband services, which will require an additional investment of capital that could further limit their margins.