Increasing Investments in Network Expansion Fuel Mobile Services Market in Latin America, Finds Frost & Sullivan Data services to drive revenues as voice market in the region reaches saturation
SAO PAULO, April 30, 2013 /PRNewswire/ -- Increasing investments in 3G and 4G network expansion, along with mobile operators' focus on enhanced quality of services, have propelled the growth of the Latin American mobile services market. The proliferation of smartphones, tablets and notebooks has popularized data and value-added services, and added to market revenues in the region.
New analysis from Frost & Sullivan (http://www.wireless.frost.com), Latin American Mobile Services Markets Outlook I, 2012, finds that the market earned revenues of more than $86.32 billion in 2012 and estimates this to reach $112.45 billion in 2017.
"The production of smart devices locally has decreased their costs, especially in Brazil, thereby fuelling the use of mobile services," said Frost & Sullivan ICT Research Analyst Georgia Jordan. "Subsidized prices and installment schemes also facilitate the purchase of these devices, and in turn, accelerate the uptake of mobile services in Latin America."
Faster 3G, evolved high-speed packet access (HSPA+) and long-term evolution (LTE) networks deployment, fixed-mobile migration, and the convergence of competitively-priced services drive market growth. Pre-paid and hybrid plans improve the affordability of these services to the emerging middle class, and consequently, increase service providers' margins in the region.
These margins, however, are curbed to a certain degree by the severe cuts in mobile termination rates. Interconnection tariffs represent close to 25 percent of company revenue, and these cuts force carriers to find new sources of income. Low spectrum caps and delays in spectrum auctions further restrain market development.
The market in Latin America is also reaching saturation, thus reducing the scope for growth. Argentina, Brazil, Chile and Venezuela have achieved 100 percent penetration, while Colombia and Mexico are close behind. Nevertheless, the rise in machine-to-machine and mobile broadband communication, as well as the growing use of multiple SIM cards, will sustain the market.
"To stay competitive and boost their average revenue per line, mobile operators must offer innovative value-added services," concluded Jordan. "Encouraging the use of post-paid lines through special tariff promotions, and providing bundled packages with mobile data services will ensure steady adoption."
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Latin American Mobile Services Markets Outlook I, 2012 is part of the Mobile & Wireless Communications Growth Partnership Service program. Frost & Sullivan's related research services cover Latin American markets for mobile enterprise services and mobile broadband services. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Latin American Mobile Services Markets Outlook I, 2012
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