2009 Latin American Mobile Operators

During the 1990s and around the turn of the millennium, a number of international companies ventured into Latin America’s burgeoning mobile arena, including América Móvil, Bell Canada International, BellSouth International, Cable & Wireless, Digicel, France Telecom, Millicom International, Portugal Telecom, Telecom Italia Mobile (TIM), Telefónica, and Verizon Communications.

Since 2003, however, the market has undergone a process of consolidation. Several international investors have withdrawn from the region, leaving about half a dozen major multinational operators that serve roughly 81% of the market.

América Móvil and Telefónica/Portugal Telecom compete with each other in most of Latin America’s major economies. Between them, they serve about 64% of the region’s mobile subscribers. América Móvil is the leader, with a 37% market share. Digicel has a small 2% market share, but is the leading operator in the Caribbean sub-region.

After sliding alarmingly from almost US$60 in 1997 to less than US$20 in 2002, mobile ARPU has stabilised at around US$16, although it has fallen under US$11 in some of the major markets. Venezuela is the region’s best performer with US$26 mobile ARPU.

Major international mobile operators – subscribers and market share – 2007 - 2008

(Source: BuddeComm based on company data and Global Mobile)

Key highlights:

Argentina

Telefónica’s Movistar, América Móvil’s Claro, and Telecom Argentina’s Telecom Personal run a close competition for market share. Previously, there were four mobile companies competing nationwide, but in 2005, Telefónica acquired Bellsouth’s operation, and the merged company was re-launched under the trading name Movistar. One of the merger conditions imposed by the government required Movistar to relinquish 42.5MHz of its spectrum. The government is expected to launch an auction in 2009 to award the returned spectrum to existing or new mobile operators. Nextel Argentina has a licence for trunking rather than mobile telephony, but the service it offers is similar to that of a standard mobile operator. Two associations of telecom cooperatives, Fecotel and Fecosur, have mobile licences but need spectrum to operate.

Brazil

Four companies dominate the Brazilian mobile phone market: Vivo (Telefónica/Portugal Telecom), Claro (América Móvil), TIM Brasil, and Oi/Brasil Telecom. Together, these four control 98.5% of Brazil’s mobile subscriber base. The consolidation process, which had halted in 2003, resumed in 2007, with the acquisition of Telemig by Vivo and of Amazônia Celular by Oi. In 2008, regional incumbents Oi and BrT began the process of merging. The remaining 1.5% of the market is shared between CTBC Telecom, Sercomtel, trunking network operator Nextel Brasil, and start-up company Unicel trading as Aeiou, which began a SIM-only service in September 2008 in metropolitan São Paulo.

Mexico

In 2000, there were nine operators in the Mexican mobile market. By early 2009, there were only three major operators: America Movil (Telcel), Telefónica (Movistar) and Grupo Iusacell (Iusacell and Unefón). Besides these three, Nextel de México operates a mobile trunking network using iDEN technology. Telcel is the clear market leader, with a market share of around 72%, Movistar a distant second (19%), followed by Iusacell (5%). Nextel de México accounts for approximately 3%. In November 2008, the competition agency, the CFC, declared that Telcel has market dominance and that it should be subject to tariff regulation. Telcel is expected to resort to legal action to prevent such price regulation.

Data in this report is the latest available at the time of preparation and may not be for the current year.