Latin American Analysis_GTT_Synd6_systems

8/7/2019 Latin American Analysis_GTT_Synd6_systems

1/12

Latin American Analysis

Syndicate 6

Systems and Finance


2/12

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


3/12

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


4/12

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


5/12

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


6/12

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


7/12

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


8/12

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.


9/12

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


10/12

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


11/12

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


12/12

Documents

Latin American Analysis_GTT_Synd6_systems