2008 Latin America - Mobile Communications and Mobile Data Market

This annual report offers a wealth of information on the mobile markets in Latin America. Subjects covered include:

• Mobile statistics and trends;
• Mobile operators;
• Government policies and regulatory issues;
• Spectrum auctions;
• Mobile technologies - GSM, CDMA, 3G;
• Trends in the prepaid sector;
• Location-based services;
• Mobile satellite services;
• Mobile data services - SMS, MMS, WAP, GPRS, EDGE, CDMA 1xRTT, 1x EV-DO.

Researcher:- Lucia Bibolini

Current publication date:- April 2008 (7th Edition)

Next publication date : - April 2009

This Latin American market report covers the mobile telephony and mobile data markets in each of the following economies: Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, the Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, PuertRico, Suriname, Uruguay, Venezuela, and the smaller Caribbean countries. The region's major mobile markets include:

Argentina

Argentina's mobile market is the third largest in Latin America, after Brazil and Mexico. In terms of penetration, Argentina is the regional leader, bar a few Caribbean islands, having overtaken Chile in June 2007. Three operators, Movistar, CTI Mvil, and Telecom Personal, run a close competition for market share. All three companies launched 3G services over HSDPA networks in 2007. BlackBerry reached Argentina in 2006 and mobile banking in early 2007. Besides the three main cellular providers, Nextel has a small but profitable slice of the market, using iDEN technology. In July 2007, twlocal cooperatives, Fecotel and Fecosur, were awarded mobile licences.

Brazil

Brazil holds one third of Latin America's mobile users, and its mobile penetration is slightly lower than the regional average. Carrier preselection has been in effect in January 2004, and number portability is tbe implemented by March 2009. Following a 2G-spectrum auction in September 2007, the number of cellular operators with a nationwide licence increased from one tthree. A 3G-spectrum auction in December 2007 was a huge success for the government, netting US$2.94 billion (90% more than the asking price) from the sale of 36 licences covering the whole of Brazil. Obligations attached tthe 3G licences included the provision of mobile telephony tunserviced areas.

Brazil's four major mobile operators, Vivo, TIM, Claro, and Oi, together hold about 91% of the market. Vivo, the number one operator, has seen its market share eroded, but may be on the path trecovery. Its parent companies, Telefnica and Portugal Telecom, have an uneasy partnership, with Telefnica trying tbuy out Portugal Telecom. TIM Brazil and Amrica Mvil's Claroccupy a close second and third place respectively in the mobile market. The consolidation process, which had halted in 2003, resumed in 2007, with the acquisition of Telemig by Vivand of Amaznia Celular by Oi. This reduced the number of operators from nine tseven. The next major change on the horizon is the expected merger of Oi and Brasil Telecom.

Chile

Chile's mobile market remains strong even though it is close tsaturation. After years of slippage, mobile ARPU is on the rise. This is partly due texpanding mobile data service revenues, and partly because of growth in postpaid client ratios. Chile, however, has lost its South American leadership in terms of mobile penetration, having been overtaken by Argentina, Uruguay, and Venezuela. Telefnica's Movistar, Entel PCS, and Amrica Mvil's Clarare engaged in a lively competition for mobile market share. All three operators have launched 3G networks using their existing spectrum, while the government prepares tlaunch a 3G auction.

Colombia

Colombia's mobile penetration is considerably higher than would be expected given the country's other macroeconomic indicators. The mobile boom, however, has slowed down from triple-digit growth in 2005, tdouble-digit growth in 2006, and tsingle-digit growth in 2007. Amrica Mvil's Comcel is the leading cellular operator by far. Telefnica's Movistar holds the second place, and Millicom-controlled Colombia Mvil (trading as Tigo) holds a distant third place. Avantel uses iDEN technology tserve the corporate market.

Mexico

Driven by a booming GSM market, Mexico's mobile industry is growing at a yearly rate of around 22%, reaching an estimated 60% penetration by September 2007. There are now three major mobile operators: Amrica Mvil's Telcel and Telefnica's Movistar offer GSM services, while GrupIusacell (recently merged with Unefn) uses CDMA technology. A fourth operator, Nextel de Mxico, operates a mobile trunking system using the iDEN mobile communications standard. Despite increased competition since 2000, Telcel still dominates market share. Between 2003 and 2007, Mexican mobile operators have been upgrading their networks toffer high-capacity and high-speed data services, such as EDGE, 1xRTT and 1x EV-DO. Telcel launched 3G services over a UMTS/HSDPA network in February 2008.

Peru
Peru's mobile penetration is about 36% lower than average for Latin America, which closely matches the country's other economic indicators. The mobile market, however, is in full swing; in 2007, Peru had the third highest mobile growth rate in South America. Nevertheless, there remain huge discrepancies between urban and rural regions; in mountainous areas, where many people lack even the basic necessities, mobile phones are a rarity. Three companies compete in the Peruvian mobile market: Telefnica's Movistar is the leader, Amrica Mvil is in second place, while Nextel Per, primarily catering tcorporate customers, has a small market share but the best ARPU. The number of SMS messages in Peru escalated in 2007, reaching an average of around 7.8 million SMS messages a day, a 250% increase compared with the number of daily massages in 2006.

Venezuela

Mobile telephony in Venezuela has been far more dynamic than the fixed-line market, smuch sthat mobile phones outnumber fixed lines in service by around 4.7 tone. Mobile penetration is among the highest in Latin America, trailing only Argentina, Uruguay, Chile, and a number of Caribbean islands. Venezuela is alsa regional leader in terms of SMS traffic, the number of text messages surpassing the number of minutes an average Venezuelan talks on a mobile phone. Venezuela is the only country in Latin America where CDMA is still the leading technology, but the twleading mobile operators, Movilnet and Movistar, are finally turning tGSM.

For those needing high level strategic information and objective analysis on the mobile telephony and mobile data markets in Latin America, this report is essential reading and gives further information on:

• Mobile market forces and developments;
• Mobile operators - acquisitions, mergers, and competition;
• Past and planned spectrum auctions;
• Technological developments in the mobile telephony and mobile data markets.

Data in this report is the latest available at the time of preparation and may not be for the current year.