TELECOMS MARKET

Most of the Paraguayan telecoms market is still controlled by the state-owned incumbent. In the mobile market, however, there has been competition since 1998. The internet market is also open to competition, and there are over a dozen ISPs offering services. Paraguay’s geographical situation, with no direct access to the sea, makes it dependant on neighbouring nations for interconnection with submarine cable networks, driving up the price of telecom services, particularly broadband. The high cost of international access has contributed to low penetration though there has been rapid growth in recent years in Asunción and other major urban centres. The National Telecommunications Commission (CONATEL) is the regulatory agency in charge of regulating national telecommunications.

BUSINESS ENVIRONMENT

Landlocked Paraguay has a market economy distinguished by a large informal sector, featuring re-export of imported consumer goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. A large percentage of the population, especially in rural areas, derives its living from agricultural activity, often on a subsistence basis. Because of the importance of the informal sector, accurate economic measures are difficult to obtain.

On a per capita basis, real income has grown steadily over the past five years as strong world demand for commodities, combined with high prices and favorable weather, supported Paraguay’s commodity-based export expansion. Since 2014, Paraguay’s economy has grown at a 4% average annual rate due to strong production and high global prices, at a time when other countries in the region have contracted. The Paraguayan Government recognizes the need to diversify its economy and has taken steps in recent years to do so. Limited progress on structural reform and deficient infrastructure are the main obstacles to long-term growth.