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Latin American Mobile Services Markets Outlook I, 2012

  • March 2013
  • -
  • Frost & Sullivan
  • -
  • 177 pages

Summary

Table of Contents

Data to Drive Mobile Services as Voice Market Reaches Saturation in Latin America

This research service covers the state of the Latin American mobile services market, examining the industry landscape, country market facts, drivers and restraints for growth, trends and forecasts, as well as regulatory issues for the region. The market is further divided into six country segments which include: Argentina, Brazil, Chile, Columbia, Mexico, and Venezuela. In addition, an in-depth analysis of the competitive situation is made, including mobile operators' market shares for both the Latin American market and across the individual country segmentations. The base year is 2011 with forecasts running through 2017.

Key Questions This Study Will Answer

• Is the market growing, how long will it continue to grow, and at what rate?
• Which country presents the largest growth opportunities from 2011 to 2017?
• What are the trends in the market regarding technology, competition, consumer demands, and the economy?
• What are the most important regulatory issues impacting mobile services in Latin America?
• What are the drivers and restraints for the industry?
• What are the challenges facing carriers in deploying 3G and 4G technologies?

Executive Summary

• Mobile services in Latin America* are expected to grow at a compound annual growth rate (CAGR) of X percent between 2011 and 2017, reaching $X billion in 2017.
• The most relevant drivers for this growth are the increasing investments to expand 3G network coverage and to improve quality, and the growing penetration of smart devices.
• Also important are efforts to increase the average revenue per line (ARPL) by attracting more post-paid customers in a market where pre-paid plans represented X percent of the X million lines in service at the end of 2011.
• Post-paid penetration is expected to grow from Xpercent in 2011 to Xpercent in 2017.
• According to the International Monetary Fund (IMF), the six main Latin American economies grew X percent in 2011. However, gross domestic product (GDP) growth is expected to slow down to Xpercent in 2012, thus, reducing the growth potential of the market.
• For the six-year forecast period, GDP growth is expected to pick up, with a CAGR of X percent, allowing the mobile services markets to regain their strength, boosted by data services, which already represent X percent of revenues.
• Despite having a mobile penetration rate of X percent, mobile services still have a lot of growth potential in the region with machine-to-machine (M2M) and mobile broadband, which is likely to become a strong alternative to fixed broadband, especially in remote regions.
• Upgrades of High Speed Packet Access (HSPA) networks to High Speed Packet Access Plus (HSPA+), and also Long Term Evolution (LTE) commercial launches, expected in the short term, will also boost data services.
• However, regulatory issues, such as mobile termination rate (MTR) cuts and lack of available spectrum, may restrain growth.
• In addition, lack of competition in rural areas and market concentration in some countries are considered significant barriers.
• The top three groups, América Móvil S.A.B. de C.V. (Telcel and Claro), Telefónica S.A. (Movistar and VIVO), and Telecom Italia SpA (TIM and Personal), concentrate X percent of the market in terms of revenue. Meanwhile, the market leaders in Colombia, Mexico, and Venezuela all have a market share of over X percent.
• Current regulatory measures to increase competition in the region include MTR cuts, mobile number portability (MNP) implementation, and the regulation of mobile virtual network operators (MVNOs).
• In 2011, there were six MVNOs operating in the main Latin American markets.
• Four relevant Mergers and Acquisitions (M&A) transactions impacted the mobile services market in 2011:
- Mexican entertainment conglomerate Grupo Televisa, S.A.B. bought a Xpercent stake in mobile carrier Grupo Iusacell, S.A. de C.V. in April 2011, in order to launch full quadruple-play offerings.
- Telecom Italia’s Brazilian subsidiary TIM Participações S.A. acquired fiber company AES Atimus (now TIM Fiber RJ S.A. and TIM Fiber SP Ltda.) in July 2011, increasing TIM’s backhaul capacity, reducing costs, and allowing the company to launch a fixed broadband offering.
- América Móvil acquired the remaining Xpercent stake Teléfonos de México, S.A. de C.V. (Telmex) that it did not previously own, in October 2011.
- Oi S.A.’s acquisition of WiFi hotspot provider Vex in November 2011.

Methodology

Revenue – Revenue presented in the research service is net revenue obtained either directly from service providers’ financial reports or in primary interviews with mobile operators conducted during this study.
Exchange Rates – The U.S. Dollar is the official currency used for this study to measure revenue.
Forecasts – Revenue is given from the base year to end of the forecast period, 2011 to 2017. The forecast uses the base year exchange rates.
Research Methodology – Frost & Sullivan conducted primary interviews with key executives from different areas (marketing, strategic planning, market intelligence, product, and content services) within the most important service providers in the six countries in the scope of this study. Extensive secondary research was conducted for two months throughout Frost & Sullivan’s internal database and other public information sources, such as financial reports, industry associations, statistical agencies, and specialized Web sites.

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