Millions live in coverage but cannot afford to use it
Mobile sector contributed $600B to Latin America's economy in 2025, with projections reaching $700B by 2030 at 3.2% annual growth rate. Despite 95% coverage, 32% usage gap remains due to high taxes and device costs, disproportionately affecting lower-income populations across the region.
- Mobile ecosystem generated $600 billion in 2025, representing 8.6% of Latin America's GDP
- Usage gap reaches 32% despite 95% coverage, driven by high taxes and device costs
- By 2030, 50% of regional mobile connections projected to run on 5G networks
- Operators plan $75 billion in infrastructure investment between 2025 and 2030
- 78% of AI deployments in Latin American telecom focus on cost reduction, only 9% on new revenue
Latin America's mobile ecosystem generated $600 billion in 2025, representing 8.6% of regional GDP, driven by digitalization, 5G deployment, and AI adoption, though a 32% usage gap persists despite broad coverage.
The mobile industry in Latin America moved $600 billion through the regional economy in 2025—nearly nine percent of everything the region produced that year. The GSMA, the trade organization representing wireless carriers worldwide, released these figures in its annual Mobile Economy report, crediting the surge to three converging forces: the push toward digital services, the rollout of fifth-generation networks, and the growing use of artificial intelligence across telecommunications companies. By 2030, the sector is expected to reach $700 billion, growing at a steady 3.2 percent annually. The direct contribution from mobile operators themselves was roughly $120 billion, but the larger prize came from something harder to measure—the productivity gains that connectivity itself unlocked, worth around $450 billion. The sector also delivered approximately $50 billion in tax revenue to regional governments, equal to 3.8 percent of all public collections across Latin America.
Yet beneath these aggregate numbers lies a stubborn paradox. The coverage gap—the share of the population living outside any mobile signal—sits at just five percent. The usage gap, by contrast, reaches 32 percent. Tens of millions of people live in areas where mobile networks exist but do not use them. Alejandro Adamowicz, the GSMA's technology and strategy director for Latin America, traced much of this divide to taxation. Governments across the region impose levies on mobile services and devices that far exceed global norms, he explained during an interview at the M360 conference in Mexico City. Those taxes inflate prices for consumers, pricing out the poorest households from both devices and service plans. Vivek Badrinath, the GSMA's president, noted that in some markets, taxes alone account for a third of a phone's retail cost—a barrier that compounds when global semiconductor shortages have already driven device prices upward.
The path forward hinges on three challenges, Badrinath argued: completing the transition to 5G, finding ways to monetize artificial intelligence, and closing the digital inclusion gap. By 2030, roughly half of all mobile connections in Latin America will run on 5G networks. Brazil will lead, with 74 percent of its connections projected to use the technology, followed by Chile at 60 percent and Mexico at 54 percent. But the real opportunity lies in 5G standalone—a more advanced version of the technology that enables new industrial and enterprise applications. Badrinath estimated that standalone 5G could add $187 billion in global mobile revenues by 2030, a figure that would substantially improve operator profitability.
Operators plan to invest $75 billion in infrastructure across Latin America between 2025 and 2030, yet the capacity to sustain those investments remains uneven. Mexico illustrates the constraint. Spectrum—the radio frequencies that carriers must license from the government—commands premium prices there, forcing operators to choose between buying airwaves and building towers. When spectrum costs are high, Adamowicz explained, less money remains for deployment. Mexico's regulators are currently reviewing spectrum pricing, though details remain sparse.
Artificial intelligence deployment in Latin American telecom reveals a region focused on cost-cutting rather than growth. Seventy-eight percent of AI projects at regional operators target customer service—chatbots, call automation, and voice analytics—designed to reduce headcount and operational expense. Only nine percent aim to generate new revenue streams, a fraction far smaller than in Asia, Europe, or North America, where 20 to 30 percent of AI work targets new business models. Adamowicz attributed this gap not to technological lag but to financial pressure. Operators squeezed by taxes and spectrum costs deploy AI first where it saves money fastest. Developing new AI-driven revenue models, he noted, requires 5G infrastructure that most of the region still lacks. Eighty-five percent of Latin American AI projects are already active—above the global average of 66 percent—yet only eight percent focus on network optimization, another casualty of tight budgets. The region's mobile industry, in short, is generating enormous wealth while struggling to invest in the infrastructure that would unlock its next phase of growth.
Citas Notables
In some markets, taxes represent up to a third of the total cost of a mobile phone, complicating digital adoption especially among lower-income populations— Vivek Badrinath, GSMA President
Operators have multiple challenges with taxes and spectrum costs, so the first use of AI is to reduce costs and achieve quick results— Alejandro Adamowicz, GSMA Technology and Strategy Director for Latin America
La Conversación del Hearth Otra perspectiva de la historia
Why does a 32 percent usage gap exist when coverage is nearly universal?
Because coverage and access are not the same thing. A signal reaching your neighborhood means nothing if you cannot afford the phone or the monthly bill. Taxes in Latin America make both significantly more expensive than elsewhere.
How much more expensive are we talking?
In some countries, taxes alone represent a third of what you pay for a phone. Add that to rising component costs globally, and a smartphone becomes unattainable for lower-income households. The service itself is also pricier due to taxation.
So the problem is purely financial?
Mostly, yes. But it is also structural. Operators cannot lower prices because they are already squeezed by high spectrum costs and tax burdens. They have limited room to invest in the infrastructure that would eventually drive prices down.
What about 5G? Is that supposed to help?
Eventually, yes. But 5G requires massive capital investment, and operators are financially constrained. They are using AI to cut costs now rather than investing in the networks that would enable new revenue models later.
So Latin America is caught in a cycle?
Precisely. High taxes and spectrum costs limit operator investment. Limited investment means slower 5G rollout. Slower 5G means fewer opportunities to monetize AI and create new services. Meanwhile, millions of people remain disconnected not because networks do not reach them, but because they cannot afford to use them.