Latin American Analysis_GTT_Synd6_systems
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Transcript of Latin American Analysis_GTT_Synd6_systems
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Latin American Analysis
Syndicate 6
Systems and Finance
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Overall economy of the regionOverall economy of the region
From 2007, the region hasexperienced great economicdevelopment
Agriculture and manufacturing arethe major economic activities
Brazil, Mexico and Argentina the top3 economies by GDP (PPP) as of 2010
Latin Americas economy grew 6.6%in 2010
Paraguays economy grew by 9.7%,followed by Uruguay with 9%, Peruwith 8.6% and Argentina with 8.4% in2010
Region increased exports by 29% in2010, reaching 853 billion USD,completely reverting the 23% drop in2009
Source: http://peopledaily.com
Source: http://oecd.com
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Telecom ecosystem of Latin AmericaTelecom ecosystem of Latin America
Top 5 markets by telecom service revenues
are Brazil, Mexico, Argentina, Venezuela
and Colombia in 2010
Current mobile penetration ~ 88-90%
Brazil is the largest telecom market in Latin
America with 41.5 million fixed subscribers,
174.0 million mobile subscribers by Q4,2009
Subscriber growth > 6.7% for Mexicos
wireless market, reaching ~ 90%
penetration in Q4, 2009
Argentinas wireless telecom market grew
by 10.2% with 48.2mn subscribers by Q4,
2009
Latin America has around 34.8% internet
penetration with Brazil and Mexico leading
the way
Source: http://www.4gamericas.org/
Source: http://www.internetworldstats.com/
Latin America Top Internet countries (mn users)
Technological share of the Latin American market (2009)
Source: http://www.prlog.org
http://www.lightreading.com
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Key Players (Region wise)Key Players (Region wise)
Major Latin American
Telecom Players
America Movil
Telefonica
Global Crossing
Mexic
C l mbia
ArgentinaBrazil
Vivo (Telefonica)
Claro (America Movil)
Tim (Telecom Italia)
Oi (Telemar)
Claro (America Movil)
Movistar (Telefonica)
Telecom Personal(Telecom Argentina)
TASA
Telfonos de Mxico (TelMex)
Iusacell (Vodafone)
TelCel (America Movil)
Unefon
Movilnet (CanTV)
Movistar(Telefonica)
Digitel
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Major events in the last 2 decadesMajor events in the last 2 decadesOpening up of the telecom market in mid 1980s
Moving from central monopolistic control to a market based
economy in early 1990s
Major telecom players from America entered the markets in
mid 1990s
Telecom equipment production got a boost post regulatory
reforms from mid-end 1990s
3G services launched amongst falling voice revenues in 2008
across Latin American countries
WiMAX deployed in 2008-09, MNP launched in 2009-10,
LTE trials begin in early 2010 in Brazil and Mexico
1980s-2010
Latin American markets crossed half billion mark in mobile
subscriber base in 2010
Fixed line growth start declining in 2002-03, market for
fixed line privatized and opened for competition
Number of mobile subscribers surpass fixed-line subscribers
in 2003
Number of GSM subscribers overtake the number of CDMA
subscribers in 2003-04
Source: http://www.internetworldstats.comhttps://www.budde.com.au
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Consumer Preferences in LatinConsumer Preferences in Latin
American marketsAmerican markets
3 out of 5 internet users in Latin America visit retailsites each month
79% of males reported making an online purchase,
while 88% of females reported doing so
Brazil showed the highest percentage conversion of
online e-commerce site visitors to purchasers
94% of visitors in Brazil making an online purchase,
Argentina followed at 89%, Colombia stood at 84%
People in Latin American countries prefer socialnetworking sites to email
They are more likely to post blogs, photos/videos or
tweet online, they value Internet access far highlythan people in more developed countries
Brazilians apparently have the most Facebookfriends, with an average of 231
More than half of Brazilian and Mexican users areposting new content on a daily basis
Instantly engaging music videos widely popular aspeople tend to only watch for a few minutes at a
time
Predominantly male users now, although womenare increasingly using mobile TV
Demographic constantly becoming younger withhandset advancement
Operators will need to combine the right services atthe right price containing the right content.
Latin Americans have adopted text messaging astheir go-to form of communication with people
sending roughly 250 billion SMSs in 2009, a number
likely to increase to > 400 billion by 2014
SMS based short codes creating new bonds between
the consumers and brands
Consumers are much more likely to respond to a
short code campaign than an email campaign,
indicating a clear preference for this medium
SMS
Mobile TV
Social MediaeCommerce
Source: http://www.newmediatrendwatch.com/
http://www.comscore.com
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Regulations in the Latin American regionRegulations in the Latin American region
Country Regulating Body
Privatized/
Liberalized 3G WiMax
Triple
Play VOIP
M-
Commerce MVNO
Number
Portability
Mobile
TV
Argentina Secretaria deComunicaciones
1990 UMTS850/1900
3.5GHz Yes Allowed2004
No Full MVNO2009
Allowed2010
No
Brazil ANATEL 1996 UMTS
850/2100
3.5GHz Yes Allowed
as VAS
services
M-Cash Full MVNO
2010
Allowed
2009
2010
Chile Subsecretaria de
Telecommunicacai
ones
1988 UMTS
850/1900
3.5GHz Yes Allowed
2004
Yes Full MVNO
2008
Allowed
2009
2009
Colombia Comisin de
Regulacin de
Telecomunicacion
es
2006 UMTS
850/1900
Not Yet
Launch
ed
Yes Allowed,
Need
telecom
license
No Partial
MVNO
Allowed
2008
2010
Mexico Coftel 1990 UMTS
850
3.5GHz Yes Allowed
without a
license
Pag-Movil Full MVNO
2010
Allowed
2010
No
Uruguay Unidad
Reguladora de
Servicios de
Telecomunicacion
es
Yes UMTS
850/1900
/2100
Not Yet
Launch
ed
Yes Allowed
without a
license
No Not
Allowed
Not
Allowed
2010
Venezuela Comisin
Nacional de
Telecomunicacion
es CONATEL
1991 UMTS
850
2.5GHz Yes Allowed,
Need
telecom
license
No Not
Allowed
Not
Allowed
2010
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Mergers and AcquisitionsMergers and AcquisitionsCountry Target Company Acquirer
Deal Size (in $
millions) Remarks
Brazil
Oi Telemar Norte Leste 1,607.70
Oi (then known asTelemar) was formed as Tele Norte Leste to
merge sixteen state-owned incumbent local exchange carriers
(ILECs), during the privatization of Brazilian
Brasil Telecom Oi NAIn 2008, Oi announced it would purchase Brasil Telecom, creatinga major Brazilian telecommunications company, already
nicknamed "Supertele" or "SuperOi"
BCP America Movil 625In 2003, America Movil announced the purchase of BCP for US$
625 million
Tele Centro Oeste Celular Telesp Celular Participacoes 438
BSE Telecom Americas 180 The acquisition BSE, also known as BCP Nordeste, became part
of America Movil's Brazilian subsidiary Telecom Americas
Telpart ParticipacoesHighlake International
Business70
Canbras Participacoes Horizon Cablevision do Brasil 32.6
MetroRED Telecomunicacoes Brasil Telecom 17
Mexico
Telmex America Movil TakeOver 2380
In January 2010 America Movil the largest mobile phone compan
in Latin America made an offer to buy Telmex and Telmex
International in order to better compete against Spain's
Telefonica, the acquisition was approved by the CFC (Comisin
Federal de Competencia) Antitrust Office in Mexico on February
11, 2010. America Movil was once the mobile arm ofTelmex, but
since 2001 America Movil was split off and grew bigger than the
former parent company.
Telereunion Lambco Telecommunications 18.8Delta Comunicaciones
DiginalesNII Holdings 39.3
Televisa(NII Holdings) Nextel 1440
In February 2010, NII Holdings and Grupo Televisa signed a
definitive agreement under which Televisa acquired an equity
stake in Nextel Mexico. Under the agreement, Televisa invested
$1.44 billion in cash for an initial 30% equity stake in Nextel
Mexico
Motorola Chihuahua factory Hon Hai Precision Industry 18
On Oct. 17 2003, Motorola sold a cell-phone factory in
Chihuahua, Mexico, to Taiwan's Hon Hai Precision Industry Co.
Ltd. Under the deal, Hon Hai was to continue to produce handsetfor Motorola at the Chihuahua factory under a multi-year
manufacturing agreement.
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Telecom Trends in the regionTelecom Trends in the region
1
Launch of 3G services is the region have seen a lot of success. Almost all countries have 3G serviceslaunched. Around 2009, in less than a year, 25 operators in 14 countries launched 3G in the region with211,000 Customers
Launch of 3G services is the region have seen a lot of success. Almost all countries have 3G serviceslaunched. Around 2009, in less than a year, 25 operators in 14 countries launched 3G in the region with211,000 Customers
2 Most of the countries have Wimax launched with a few having planned launches in 2011. Latin America
recorded 35 WiMax deployments across 14 countries and 261,000 subscribers at the end of 1Q08 Most of the countries have Wimax launched with a few having planned launches in 2011. Latin America
recorded 35 WiMax deployments across 14 countries and 261,000 subscribers at the end of 1Q08
3 MNP has been launched, off late in 2009-10 in most of the countries, Brazil leading the pack with most ports MNP has been launched, off late in 2009-10 in most of the countries, Brazil leading the pack with most ports
4 The industry seems ripe for consolidation and a lot M&A activity is on the cards. ne of the biggest deals
being the consolidation of Am rica Mvil, Carso Global and Telmex Internacional, worth $23.8 billion The industry seems ripe for consolidation and a lot M&A activity is on the cards. ne of the biggest deals
being the consolidation of Am rica Mvil, Carso Global and Telmex Internacional, worth $23.8 billion
5 The growth of mobile broadband in Latin America has been nothing short of spectacular with a total of 15
million connections till 2010 The growth of mobile broadband in Latin America has been nothing short of spectacular with a total of 15
million connections till 2010
6 Mobile TV has been launched in most of the countries with ISDB-T being the chosen technology Mobile TV has been launched in most of the countries with ISDB-T being the chosen technology
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Telecom EcosystemTelecom Ecosystem
Customer
Network
EquipmentVendors
ZTE, NSN,Ericsson, Huawei
NetworkProvider
America Movil,Telefonica
control almost62% of the
market
VAS ProvidersGemalto, IMI
mobile
ServiceProvider/MVNOs
America Movil,Telefonica , Telecom
Argentina
Handset
ManufacturersNokia,
Motorola,Sony Ericsson
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What Next for Latin American markets?What Next for Latin American markets?
The launch andadoption of LTE
networks
The Launch of 4GHSDPA and Next
Generation IPnetworks
Launch of Videoon Demand bymost service
providers
Emergence ofInternet Based
Mobile VAS andexplosive growth
in app stores
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