report analysys mason cala
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Relatório da Analysys Mason sobre o mercado de telecom na América do Sul e Central (CALA) no período de 2009 - 2014.TRANSCRIPT
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© Analysys Mason Limited 2010 Contents
Contents
0 Executive summary 7
1 Recommendations 8
2 Forecast 10 2.1 Brazil 15 2.2 Argentina 17 2.3 Peru 18
3 Market share 20 3.1 América Móvil 23 3.2 Telefónica 25 3.3 Other leading operators in CALA 28
4 Market drivers and inhibitors 30 4.1 Mobile operators’ 3G upgrades and expansion enable them to satisfy
demand
for mobile data services 30 4.2 Low availability of fixed broadband leads to opportunities for mobile to
extend
the addressable market 31 4.3 Operators are bundling fixed broadband with other services in response to
low adoption rates 32 4.4 Strong economic growth increases the addressable market for telecoms
services 33 4.5 The presence of a few strong operators in many markets limits CALA’s
growth potential 34
5 Business environment 35 5.1 Regulatory issues 35 5.2 Geographical challenges 36 5.3 Demographics 36
6 Market definition 40
7 Country summaries and supporting data 43 7.1 Argentina 43 7.2 Brazil 44 7.3 Chile 44 7.4 Colombia 44 7.5 Mexico 45 7.6 Peru 45
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© Analysys Mason Limited 2010 Contents
7.7 Venezuela 45 7.8 Selected data for other top operators in CALA 46 7.9 Countries included in Central and Latin America 47 Key to acronyms 48
Author 49
Acknowledgements 49 Research from Analysys Mason 51
Consulting from Analysys Mason 52
List of Figures and Tables
Figure 0.1: Total operator service revenue in CALA, 2009–2014 7
Figure 2.1: Total operator service revenue in CALA, by country, 2009 11
Figure 2.2: Total operator service revenue in CALA, 2009–2014 12
Figure 2.3: Revenue in CALA, by service type, 2009–2014 12
Figure 2.4: Connections in CALA, by service type, 2009–2014 13
Table 2.1: Mobile handset penetration rates in CALA, 2009–2014 13
Table 2.2: Mobile broadband penetration rates in CALA, 2009–2014 14
Table 2.3: Fixed broadband household penetration rates in CALA, 2009–2014 14
Table 2.4: Fixed voice penetration rates in CALA, 2009–2014 14
Figure 2.5: Total operator service revenue in Brazil, 2009–2014 15
Figure 2.6: Spend in Brazil, by service type, 2009–2014 16
Figure 2.7: Connections in Brazil, 2009–2014 16
Figure 2.8: Total operator service revenue in Argentina, 2009–2014 17
Figure 2.9: Spend in Argentina, 2009–2014 18
Figure 2.10: Connections in Argentina, 2009–2014 18
Figure 2.11: Total operator service revenue in Peru, 2009–2014 19
Figure 2.12: Spend in Peru, 2009–2014 19
Figure 2.13: Connections in Peru, 2009–2014 20
Figure 3.1: Share of service revenue in CALA, by operator, 2009 21
Figure 3.2: Share of mobile service revenue in CALA, by operator, 2009 21
Figure 3.3: Share of fixed service revenue in CALA, by operator, 2009 22
Figure 3.4: Top-ten mobile operators in CALA, by subscribers, 2009 22
Figure 3.5: Top-eight fixed broadband operators in CALA, by subscribers, 2009 23
Table 3.1: List of América Móvil’s subsidiaries 23
Figure 3.6: América Móvil’s mobile subscriber share, by country/region, 2009 24
Figure 3.7: Fixed line share of América Móvil, TELMEX and TELMEX
Internacional by country/region, 2009 25
Figure 3.8: Fixed broadband subscriber share of América Móvil, TELMEX and
TELMEX Internacional by country/region, 2009 25
Figure 3.9: Mobile subscribers of Telefónica/Telecom Argentina, by region, 2009 25
Figure 3.10: Fixed broadband subscribers of Telefónica/Telecom Argentina, by region,
2009 25
Table 3.2: Telefónica’s operating companies in CALA 26
Figure 3.11: Mobile subscribers of Telefónica/Telecom Argentina, by country/region,
2009 27
Figure 3.12: Fixed broadband subscriber share of Telefónica/Telecom Argentina, by
country/region, 2009 28
Figure 3.13: Fixed line share of Telefónica/ Telecom Argentina, by country/region,
2009 28
Figure 4.1: Timescale of HSPA deployments in seven countries in CALA 30
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© Analysys Mason Limited 2010 Contents
Figure 4.2: Mobile data as a proportion of revenue in selected countries in CALA,
1Q 2008–4Q 2009 31
Table 4.1: Spectrum auctions in CALA that are currently underway or are expected
within two years 31
Table 4.2: Mobile broadband connections and penetration for selected countries in
CALA 32
Table 4.3: Fixed broadband connections and penetration rates for selected countries
in CALA 33
Table 4.4: Forecasts of regional GDP and of CAGR, 2009–2014 34
Figure 5.1: Population versus GDP per capita for selected countries 37
Table 5.1: Gini coefficients for selected countries 37
Figure 5.2: Monthly mobile ARPU versus GDP per capita for selected CALA
countries, 2009 40
Figure 6.1: Regions and indicators, 2008 41
Figure 6.2: Geographical coverage of Analysys Mason’s CALA forecast 42
Table 6.1: Definitions of data points in this report 42
Table 7.1: Key indicators for Argentina, 2009 43
Table 7.2: Key indicators for Brazil, 2009 43
Table 7.3: Key indicators for Chile, 2009 44
Table 7.4: Key indicators for Colombia, 2009 44
Table 7.5: Key indicators for Mexico, 2009 44
Table 7.6: Key indicators for Peru, 2009 45
Table 7.7: Key indicators for Venezuela, 2009 45
Table 7.8: Selected data for other top operators in CALA, 2009 46
Table 7.9: List of countries in CALA 47
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© Analysys Mason Limited 2010 Executive summary
0 Executive summary
The region of Central and Latin America (CALA) benefits from strong economic growth in
many countries, making it one of the fastest growing telecoms markets in the world.
Analysys Mason forecasts a CAGR of 8% in CALA from 2009–2014. Economic growth is
leading to rising disposable incomes and greater spend on telecoms services.
Figure 0.1: Total operator service revenue in CALA, 2009–2014 [Source: Analysys Mason,
2010]
0
20
40
60
80
100
120
140
160
180
200
2009 2010 2011 2012 2013 2014
Revenue
(US
D b
illio
n)
Over the past 10 to 20 years, CALA has benefitted from investment from European and
North American operators. This means that telecoms services have been available to most
of the population for many years. This makes it different from other growth markets, such
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© Analysys Mason Limited 2010 Executive summary
as India and Sub-Saharan Africa, where large segments of the population are getting
telecoms services for the first time. The population of CALA is relatively small compared
with other growth markets. Much of it is concentrated in urban centres, making it easier for
operators to provide coverage. CALA also has a higher GDP per capita than other growth
markets. CALA is therefore a more mature market. Wireline availability is widespread, and
3G is becoming increasingly available, as regulators continue to award new licences.
CALA also has an uneven income distribution. This leads to lower fixed broadband
penetration rates than in regions with less income inequality.
Some countries in CALA, such as Argentina and Chile, are relatively wealthy, and are
already at or are near to mobile saturation, making them look and behave more like mature
markets. Operators in these markets will be transitioning from subscriber acquisition to
subscriber retention and revenue generation. Improving the customer experience will be
critical to achieving these goals. Operators will also need to employ more-sophisticated
segmentation strategies in order to develop offers tailored to specific user groups, which
they did not need to do previously. Other markets, such as Colombia and Peru, are
generally lower income, and still have low penetration rates. Because ARPUs here are
lower, operators in these markets face extreme cost pressures. In all markets, operators
must improve efficiency in order to achieve profitability. There is a disconnect between
what users can spend, and their expectations for service quality. Operators in CALA face
challenges similar to those faced by operators in more mature markets: to capture a greater
share of mobile data revenue in order to provide the capital needed to increase capacity and
coverage. Rather than compete on price, they must compete on customer experience. They
need to avoid the pitfalls encountered by mobile operators in mature markets by launching
usage-based pricing for mobile broadband services from the outset.
Most countries in CALA have strong incumbent operators. Two operators, América Móvil
and Telefónica, have enormous presence across CALA and have recently become more
formidable competitors as a result of acquisitions. This makes it difficult for new entrants
to establish themselves. In the absence of competition, especially for fixed services, prices
are higher than they should be, which limits growth and penetration. Regulators concerned
to increase telecoms service penetration can – and should – enact rules that level the
playing the field.
Despite widespread wireline availability, mobile services will dominate the telecoms
market in CALA. Fixed broadband penetration rates are extremely low today, and mobile
broadband services are competitively priced. Fixed operators will need to bundle fixed
broadband services with value-added services, such as pay TV, or with bundles of voice
minutes in order to differentiate it from mobile broadband.
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© Analysys Mason Limited 2010 Recommendations
1 Recommendations
Mobile operators must develop appropriate business models to ensure that
they generate enough revenue to fund capacity expansion.
To ensure quality of experience, operators must make sure to have adequate network
capacity to handle surge of mobile data traffic, especially in the backhaul network. They
should offer usage-based pricing schemes from the onset for mobile broadband services to
avoid the revenue and traffic dilemma many operators in mature markets find themselves
in. Their business models need to give them a way to capture the value of content services,
rather than over-the-top providers. Another aspect of this model should include
segmentation strategies that tailor offers to different groups of users to increase usage and
ARPU.
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© Analysys Mason Limited 2010 Forecast
2 Forecast
CALA is the most mature growth market. It consists of a mix of relatively wealthy
countries with mature telecoms markets and lower-income economies with less-developed
telecoms markets. Subscriber growth has slowed down in recent years, and some markets
have achieved mobile penetration rates of over 100%. Nonetheless, there has also been new
licence activity here: Chile and Mexico announced auctions for 3G spectrum. As we find in
all growth markets, there is a wide disparity in income. The higher-income subscribers have
already been captured, so the next wave of growth will come from lower-income
subscribers. Operators are looking to improve the ARPU of existing subscribers by offering
more value-added services. This, in many cases, can be less expensive than trying to attract
new subscribers in inaccessible areas. Penetration rates for fixed broadband are extremely
low, especially given the amount of wireline infrastructure, so there is plenty of room for
these to rise. The region is dominated by a handful of large operators, such as América
Móvil and Telefónica, with strong incumbents in many countries. Markets with a few very
strong operators tend to have lower rates of growth in telecoms revenue and subscribers, as
pricing remains higher than in more-competitive markets.
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© Analysys Mason Limited 2010 Forecast
Figure 2.1: Total operator service revenue in CALA, by country, 2009 [Source: Analysys
Mason, 2010]
8%
6%
19%
5%
41%
7%
3%
11%
Venezuela Colombia Mexico Chile
Brazil Argentina Peru Rest of CALA
The mobile base in CALA is very heavily skewed towards prepaid. This situation is
unlikely to change much over the forecast period because of the low income levels of a
large proportion of the population. Instead, hybrid plans involving a low fixed monthly
charge, plus the opportunity to make more calls by buying prepaid cards (in some cases,
cards specifically for SMS, or for data) will continue to become more popular because of
the increasing importance of mobile data. Operators trying to defend themselves against
competition, particularly in the context of number portability, push clients to move to
contract or hybrid offers by offering family-and-friend plans that include big discounts for
calls within such groups. However, this course of action is not something that implies
radical changes, but instead a slow migration to postpaid. Also, although the postpaid client
base grows as a result, discounts may offset some of the impact on revenue. Income
distribution is another relevant factor: for many people on low incomes (the bulk of the
population in CALA), prepaid is the only way to have access to mobile services and this
will continue for some time.
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© Analysys Mason Limited 2010 Market share
3 Market share
The CALA market is dominated by América Móvil and Telefónica. These companies have
operations in multiple countries, and are usually among the leaders in each market. América
Móvil acquired TELMEX and TELMEX Internacional, which will make it an even stronger
competitor. Telefónica may acquire Telecom Italia and recently tried to acquire Portugal
Telecom’s 50% share of Vivo, the leading mobile operator in Brazil, although it is unlikely
that the government will allow Telefónica to take control of both Telecom Italia and Vivo.
Figure 3.1: Share of service revenue in CALA, by operator, 2009 [Source: Analysys Mason,
2010]
25%
19%
10%6%
5%
3%
32%
Telefónica América Móvil Oi Telmex Telecom Italia Vivo Other
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© Analysys Mason Limited 2010 Market share
Figure 3.2: Top-ten mobile operators in CALA, by subscribers, 20091 [Source: Analysys
Mason, 2010]
0 20 40 60 80 100 120 140 160 180 200
Cable&Wireless
Empresa Nacional de
Telecomunicaciones (ENTEL)
NII Holdings
CANTV
Oi
Millicom International
Cellular
Telecom Italia
Vivo
Telefónica
América Móvil
Mobile subscribers (million)
Figure 3.3: Top-eight fixed broadband operators in CALA, by subscribers, 20092 [Source:
Analysys Mason, 2010]
0 1000 2000 3000 4000 5000 6000 7000 8000
Hughes
ENTEL
Cable&Wireless
CANTV
Oi
NET Serviços
Telmex
Telefónica
Fixed broadband subscribers
1 Vivo is a 50:50 joint venture between Telefónica and Portugal Telecom.
2 TELMEX is now owned by América Móvil.
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© Analysys Mason Limited 2010 Market drivers and inhibitors
4 Market drivers and inhibitors
4.1 Mobile operators’ 3G upgrades and expansion enable them
to satisfy demand for mobile data services
Operators continue to upgrade 3G networks, which will have an immediate impact on
mobile operators’ revenue, as they are able to deliver more mobile data services. (LTE will
not be a major factor until the very end of the forecast period, and only in the most mature
markets.) Currently, 3G networks are available in the majority of countries in CALA,
although some, like Mexico, have limited spectrum, which is hampering broader adoption
of mobile data services.
Figure 4.1: Timescale of HSPA deployments in seven countries in CALA [Source: Analysys
Mason, 2010]
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Venezuela
2007 2008 2009
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Venezuela
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Venezuela
2007 2008 2009
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Venezuela
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© Analysys Mason Limited 2010 Market drivers and inhibitors
As a result of the increased capability of 3G networks, operators have accrued increasing
proportions of their revenue from mobile data services. Regulators are awarding additional
spectrum in many countries, which will also allow for greater mobile data usage.
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© Analysys Mason Limited 2010 Business environment
5 Business environment
5.1 Regulatory issues
Regulatory bodies responsible for awarding spectrum and licences play a crucial role in the
development of telecoms markets. These bodies also govern the nature of the services that
operators can offer. Incumbents, especially, can face an uphill battle to offer bundled
services when regulators try to level the playing field.
For example, cable operators in Argentina are keeping MNOs out of the TV market with
legal challenges that have, so far, been upheld. This has forced MNOs to form partnerships
with cable operators, instead of taking over the market. Telcos, on the other hand, have
managed to stop cable operators being able to offer voice services. This creates a situation
in which partnership is the best route for both parties.
In Brazil, regulators are keen that broadband is made available throughout the country.
They have delayed issuing the details of a national broadband plan, but these are expected
soon. They have announced that the vehicle for delivering broadband service will be state-
owned TELEBRÁS. Although there are as yet no details of how TELEBRÁS will act, it
goes against the existing operators’ desires to have a state-owned operator. The regulators
intend that the project will be complete by 2014.
The Mexican regulator is now opening up the mobile market with spectrum auctions and
will possibly create a new 3G-only challenger, such as a cable operator. One matter to be
settled is that of TELMEX’s entry into the pay-TV market, from which it is currently
banned. TELMEX seems to have satisfied conditions that were imposed upon it and may
well be allowed to enter the pay-TV market soon. This development will allow significant
growth in IPTV, as TELMEX accounts for a large slice of the fixed broadband market.
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© Analysys Mason Limited 2010 Business environment
TELMEX and Telcel have both been found dominant in their markets. Remedies are likely
to follow, and these may make it easier for other operators to gain market share.
In Chile, the regulator no longer regulates Telefónica’s fixed line pricing as a result of
competition from mobile. Mobile number portability is expected in the second half of 2010.
Now that the Venezuelan government has taken over CANTV, there is no separation
between the operator and the telecoms ministry. This will make it difficult for other
operators to compete, particularly since the government sees its mission as providing
telecoms services for the social benefits, rather than for economic benefit.
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© Analysys Mason Limited 2010 Author
Author
Roz Roseboro (Principal Analyst) is the lead analyst for Analysys
Mason’s Global Growth Markets research programme. Her primary
areas of specialisation are market drivers in growth markets and
understanding the opportunities for operators and vendors in these
markets. She also specialises in professional services needed to deliver
infrastructure services and in network equipment manufacturers. Roz
has nearly 20 years’ experience in market research, marketing and
product management. She spent five years at RHK Inc., where she ran the Switching and
Routing programme, and later the Business Communication Services programme. She
spent nine years at Motorola, Inc., working in IT product development and radio and
mobile phone product management. Roz holds a BA in English from the University of
Massachusetts, Amherst and an MBA in Marketing, Management and International
Business from the J.L. Kellogg Graduate School of Management at Northwestern
University.
Acknowledgements
The author would like to thank all those who assisted in the preparation of this report,
especially Luis Minoru, Thiago Lanconi and Ignacio Perrone, of PromonLogicalis, for their
insight into the CALA region and their review of the report.
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© Analysys Mason Limited 2010
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