Executive SummaryMobile communicationsLatin America held 10.3% of the world’s 1.7 billion mobile subscribers in early 2005.
The region’s mobile subscribers jumped from 21 million in 1998 to around 176 million in 2004, turning one in three Latin Americans into a cell phone user.
The mobile market experienced a veritable boom in 2004, growing 42% year-on-year.There are huge variations in penetration rates throughout the region, with Chile, Jamaica and Puerto Rico recording the highest rates at around 61%, 59% and 48% respectively at end-2004, while Haiti and Honduras stagnate at around 2% and 8% respectively.The inadequacy of basic telephone infrastructure coupled with lengthy waiting periods have helped to drive the demand for mobile phones.
Also, natural factors have contributed to wireless popularity in a continent where mountainous terrain and remote rural areas make the laying of cable uneconomical, and where hurricanes and earthquakes have caused huge destruction to fixed-line networks.Mobile penetration in Latin America surpassed fixed-line penetration in 2001.
By end-2004, cellular subscribers had overtaken their fixed-line counterparts in most Latin American countries.
Paraguay leads the trend, with four times as many mobile phones as fixed lines in service at end-2004.Mobile data servicesAlthough revenues from mobile data services still represent only a small percentage of total mobile revenues in the region, most Latin American operators offer messaging services and Internet browsing on a mobile phone using WAP technology.
According to Pyramid Research, mobile data services have historically constituted less that 5% of the region’s mobile revenues, and were a little over US$1 billion in 2004.
However, Pyramid believes that mobile messaging is emerging as a key growth opportunity for operators in Latin America, and mobile data revenues are likely to reach US$4 billion by 2009.Short Message Service (SMS) accounts for the majority of mobile data revenues in Latin America.
Considerable effort has gone into developing SMS, and the results can be seen in the region’s ever-increasing revenues from mobile data, with Venezuela and Argentina at the forefront.
To increase SMS traffic, a number of countries have adopted SMS interoperability between mobile operators, including: Argentina, Brazil, Chile, Mexico, Paraguay, Peru and Venezuela However, there are no similar agreements for Multimedia Message Service (MMS).
Without MMS interoperability, this service will remain nothing better than a novelty for a select few.An increase in revenues from messaging services would also serve to counterbalance the ever decreasing levels of ARPU in the mobile market.
Pyramid Research believes that mobile voice ARPU will fall by 16% to US$10.13 between 2004 and 2009, while data APRU will increase 143% from US$0.84 to $2.04 over the same period.