Honduras is one of the poorest countries in Central America and has long been plagued by an unstable political framework which has rendered telecom sector reform difficult. This has created real difficulties for operators as well as consumers. While the population is just under 10 million, it is as large as the size of England or the state of Pennsylvania in USA.
Fixed-line teledensity, at only 4.9%, is significantly lower than the Latin American and Caribbean average. Poor fixed-line infrastructure has been exacerbated by low investment and topographical difficulties which have made investment in rural areas unattractive or uneconomical. Consequently, the internet has been slow to develop. DSL and cable modem technologies are available but are relatively expensive and thus take-up has been low thus far, while higher speed services are largely restricted to the major urban centres. Nevertheless, the demand for broadband is steadily increasing and there has been some investment in network upgrades to fibre-based infrastructure. The government also provides free internet to around 75,000 households in Honduras.
On the positive side, these factors have encouraged consumer take-up of mobile services, a sector where there is lively competition supported by international investment. Even so, mobile penetration is substantially below the regional average. Revenue growth from the mobile sector looks promising in coming years as operators invest in their networks, expand their reach and upgrade their capabilities to accommodate mobile broadband services. Mobile data as a proportion of overall mobile revenue has increased steadily, though low-end SMS services will continue to account for the bulk of data revenue for some years.
There are 3 network providers in the Central American state of Honduras: Tigo (by Millicom), Claro (by América Móvil) and Honducel (by Hondutel). The three networks use different frequencies: Tigo's 2G and 3G is on 850 MHz, Claro's is on 1900 MHz and Honducel's is on 1800 MHz. In 2014/5 Tigo and Claro both started with 4G/LTE on the 1700 MHz (AWS Band 4) frequency.
Tigo is the clear market leader in the country with a solid 60% share, followed by Claro with 39% and Honducel with below 1%. Overall, 99% of municipalities in Honduras have 2G coverage and 49% have 3G coverage by any provider. So don't expect high speeds and data use especially in remote areas is still very slow. 4G/LTE started in 2014 in Tegucigalpa, San Pedro Sula and La Ceiba. For its license, Tigo is required to establish a 4G/LTE network in all major cities equivalent to around 15% of the country’s territory.
Honduras’s National Telecommunications Commission (Comision Nacional de Telecomunicaciones, Conatel) has indicated that it is poised to free up the 3.5GHz band for mobile use, as it seeks to ‘deliver the benefits of regional harmonisation with other Latin American countries.’ In freeing up the band, the regulator has identified international roaming, spectrum optimisation, investment cost and implementation time as its key priorities.
Spectrum in the 3.3GHz-3.7GHz range will be designated for mobile use, while frequencies in the 3.7GHz-3.8GHz range will be earmarked for fixed-wireless broadband use. The spectrum will be auctioned via a public tender, although no date has been disclosed.
Millicom’s Tigo brand is the largest mobile provider in Honduras. Millicom have revealed plans to spend $135 million on network improvements across three markets in Latin America, signing up with Ericsson to install LTE and 5G-ready kit to improve and expand coverage. The modernisation of its networks in Honduras, Paraguay and Bolivia is designed to widen its coverage to an additional 2.5 million people across 712 municipalities. Improvements include replacement of existing 4G packet core technology with an Ericsson dual-mode 5G core. Following the upgrade the operator will be able to use carrier aggregation technology.
The project is expected to take between two and three years to complete.
Claro by Mexican América Movil is the only viable competitor to Tigo in the country. It has a slightly lower coverage, but lower rates too. Claro’s 4G/LTE network started in 2015 and was initially made available in major cities such as Tegucigalpa, San Pedro Sula and La Ceiba.
Honducel was established in 2013 as mobile branch of the state-owned telecom operator Empresa Hondurena de Telecomunicaciones (Hondutel). Generally because of almost non-existent 3G coverage and unreliable service, it can't be recommended for travellers. It hardly reaches 1% market share and survives as their state-owned parent company still controls the landline market. In 2017 Honducel, has reportedly suffered heavy subscriber losses and ended the year below 10,000 mobile subscribers.
The Honduran government is said to be preparing a financial rescue package for state-backed telco Hondutel, as the scale of the company’s debt has been revealed. According to La Prensa, the stricken telco’s losses exceeded HNL298.9 million (USD12.4 million) in 1H21, which follows three consecutive years in which the company posted an annual net loss. Compounding the situation, state utility firm Empresa Energia Honduras (EEH) has cut off Hondutel’s electricity supply over the non-payment of its HNL450 million bill.
The government has indicated that the plan will see Hondutel modernised to become a gigabit-capable ‘broadband institution’. The tentative plans will see the government invest in a new submarine cable to double or triple the country’s available bandwidth. Despite the dire situation, the privatisation of the company has been ruled out, however.
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