Will 2008 be the year for Mobile Instant Messaging in Latin America?

Despite operator's interest and efforts in the last three years or so, Latin America has yet to catch up to their counterparts in the USA, Australia and Europe with a gateway/client MIM solution.
The issue seems to be that so far, operators have shown interest in a portal messenger, in a region where MSN has more than 80% market share (90% according to some). Movistar and America Movil have both had talks with MSN but so far only Movistar Chile and Argentina have a formal agreement (see Movistar and Microsoft have created in Chile the first instant message community for mobile telephones) for a WAP based solution.

MSN is said to be looking at major markets (Mexico, Brazil) and going on a case by case basis, which means that any negotiation with America Movil and Telefonica Movistar will be done per country/operator. Talks between Latin American operators and MSN, however, have been going on for several years now and operators have become increasingly frustrated.

Other portals (AOL, Yahoo) have been more cooperative but a MIM solution without MSN will have minimum impact due to MSN's market penetration. The region's low ARPU might be a factor in MSN's decision not to rush into the market, but other factors provide a better outlook for this service:

• A low ARPU does not necessarily translate into a subscribers' ability or willingness to pay, it might also show that operators in the region are still in the process of developing Value Added Services.
• High usage of SMS in countries like Argentina, Venezuela and Ecuador indicate
  that some subscribers are using texting as an Instant Messenger.
• In addition, text messaging has been around for a long time and is in need of an upgrade. MIM seems to be the perfect service for this.

Some operators have launched MSN Mobile services and others are doing IM to text messaging, but this solutions tend to have low penetration and low usage due to a cumbersome user interface. In addition, it places operators in the unfavorable role of bitpipe instead of using MIM as a relevant element in their messaging portfolio.

MSN should reconsider its strategy for Latin America and open the door to operators looking for a roubst MIM solution. It has been very successful in other markets such as Australia and the USA and with the right pricing strategy and adequate user interface, both operators and MSN might be in for a nice surprise.