LATAM Telecom

As the year comes to an end, it's a good idea to reflect on the past and learn from our experience, good or bad. With this in mind, I compiled a list of the good, the bad and the really bad news and analysis from the mobile industry in Latin America that I blogged about during 2008, with some additional comments and reflections. Enjoy! The good!!!! America Movil launches the iPhone - after much speculation and anticipation, America Movil formally announced in early May that they were selected to distribute the iPhone in Latin America. America Movil's VAS team moved quickly and successfully launched exactly one year after the iPhone was first launched in the USA by AT&T. Why is this GOOD? This was a complex deployment that was done with a very tight schedule. The successful launch of the iPhone in Latin America was possible thanks to a strong team; Corporate VAS in Mexico, together with local VAS Managers and Operations Managers in the region showed that they have wha

Rob Pegoraro, blogger and author of Fast Forward, the Washington's Post Personal Technology column, wrote yesterday about the new BlackBerry models (see BlackBerrys Again Get Sleeker but Can't Challenge iPhone ). I like Pegoraro's analysis on the new devices, it is very detailed and comprehensive, however his comparison to the iPhone, misses the point entirely. I have written extensively about how the iPhone is breaking new ground and challenging traditional handset vendors and operators to rethink their strategy. A quick look at how big players have responded since the iPhone was shown to the world at MacWorld 2007 is proof enough: Nokia recently unveiled its flagship phone for 2009, the N97, a few days ago and of course, RIM's new devices include touch screen devices that do mimic the iPhone user interface. Experience however, has shown that the BlackBerry VS iPhone challenge exists mostly in the minds of analysts, not in the marketplace. BlackBerry has positioned it

A quick look at how the handset industry has changed after the iPhone was first introduced at Macworld 2007, confirms that visual interfaces are becoming a de facto standard for mobile devices: Just a few months after the iPhone launch by AT&T, Verizon launched the Voyager, made by LG. In early 2008, Sprint announced at CTIA the launch of the Samsung Instinct. More recently, just a few weeks ago, Research in Motion introduced the first touch screen Blackberry. Finally, Nokia, introduced its flagship phone for 2009, the N97, a few days ago. These are just a few of the many example of new touch screen devices by major handset manufacturers. At first instance it might seem like iPhone clones are flooding the market, but I strongly believe they are more than that; they are part of a growing trend that focuses on user experience. While it can be argued that Apple's iPhone did not actually create these innovations, some of which had been around for several years before its release,

Even before the economic meltdown, in the last three years operators operators worldwide were developing more aggressive business case guidelines for new and existing services. Operators such as Telefonica, Vodafone and Millicom today have imposed business case guidelines that are more strict than ever before. To comply, VAS managers have followed the strategy of evaluating subscribers and deprovisioning services from low usage segments. We have seen this happen over and over again with operators in Europe, Latin America and Asia. Deprovisioning subscribers from low usage segments looks good on paper because it makes it seem that operators are serving the same or even a larger subscriber base with lower CAPEX. The problem with this is that operators are playing with financial formulas instead of increasing revenues. In addition, many times operators do not provide an alternative service for these segments. While new models for commercial agreements that are not based on a per subscrib

Yesterday I attended a panel discussion titled "Mobile Advertising - Industry Revenue Enhancer or Distraction?" with key industry players (information below) who shared their experience and insight on the current status and potential of mobile advertising. The discussion centered around the fact that while mobile advertising is getting a lot of attention in the mobile industry it has not yet consolidated as a significant revenue generator across the value chain, for operators and advertisers. The fact that the panel was made up by vendors allowed us to get a clear picture of their perspective of the industry. Interestingly, the panel spent more time discussing a question from the audience regarding ROI and metrics than on anything else. Their input was valuable and insightful, however, it seems from the long explanations that this is an issue that is a long way from being resolved. Just like other new players before them, mobile advertising vendors talked about how the Inte

The current world recession is leading businesses and consumers to curtail spending, which is expected to affect growth and revenues during 2009. Every day we hear about how operators are preparing to face this economic downturn with layoffs and by reducing CAPEX and OPEX; just last week, AT&T announced plans to cut 4% of its work force ( Cellular News ); Sprint Nextel is also expected to announce job cuts in 2009 ( Cellular News ). In Latin America, Millicom recently announced that 2009 CAPEX will be “substantially lower” than in 2008 and Telefonica stated last week that the region will continue to grow, but at a slower rate than previously expected. Despite the current economic downturn, there are opportunities operators have to introduce new services with minimal CAPEX. By analyzing end user behavior, traditional services such as Voice Mail, SMS and MMS can be repackaged and launched as new services, leveraging existing VAS infrastructure and reducing CAPEX normally required f

With mobile penetration around the world reaching saturation, and the growth rate for traditional services flattening, operators are looking for new options to increase revenue. However, traditional services (voice, SMS) continue to be the main revenue generators for operators and there are still many interesting options to continue milking the cash cow. Services such as Ring Back Tones, MMS and Push e mail, when they were first introduced, created huge expectations that have not been delivered. In addition, operators get distracted by these new services and tend to overlook the basics. Voice mail, for example, is still the main call completion service and SMS continues to be the main messaging service worldwide; it is expected this trend will continue for the next few years. Operators can benefit from looking at options that sit on top of both services, to revitalize them and target missed opportunities. One of the key advantages to leveraging voice and SMS is that they can be used to

We recently posted about Millicom's success in Latin America, where it is positioned as a reliable operator with strong customer loyalty. The Latin American market continues to grow and Millicom is benefitting from this, but it has also managed to gain market share from the two giants in the region, America Movil and Telefonica Movistar. The question is how is Millicom doing this? Both heavyweights have consolidated their leadership in Latin America; they compete head to head in most of the region (America Movil operates in 16 countries, Telefonica Movistar in 13) and both surpassed the 100 million mark a couple of years ago. Both operators seem intent to compete by continually trying to differentiate themselves with new products and services. However, in most cases, it only takes a few months for the other to catch up. Most recently, both operators were ready to kill each other over the iPhone. America Movil got a headstart but in the end, Telefonica was able to mitigate any possi

We recently posted our thoughts on remarks made by Marc Beuls, President and CEO of Millicom, at the Morgan Stanley 8th Annual Technology, Media and Telecoms Conference in Barcelona. Even though Millicom continues its impressive growth in Latin America, Mr. Beuls made it clear that that CAPEX for 2009 will be “substantially lower” than in 2008. It comes as no surprise that other major players in the region will follow a similar strategy in 2009. Mr. José María Álvarez Pallete, General Manager of Telefónica Latinoamérica, stated last week at CEDE (V Congreso de la Confederación Española de Directivos y Ejecutivos) that the region will continue growing in subscribers and revenues (source Telesemana ), but he expects a slowdown in 2009, given the economic crisis. Mr. Álvarez Pallete, however, made it clear that this won't be a dramatic slowdown but rather a slower growth rate than previously expected and that Latin America is the area where the company expects to grow in the coming y

This is a follow up to my recent post on a Cellular News article about the success of Telecom Argentina has had increasing SMS usage. I stated that this might indicate the need to pay more attention to other messaging services such as MMS, Instant Messaging, Personal Messaging as well as other data services. From the usage statistics we have from Pyramid Research (March 2008), we can see that SMS revenue for the Argentinean market represents more than 85% of total messaging revenues. While this is expected to change over time, the numbers we have clearly reflect that SMS is still the main source of revenue from messaging. In early 2007, Telecom Personal launched an initiative to evaluate Mobile Instant Messaging, following Telefonica Movistar's agreement with MSN, which was discussed in this blog (see here ). Telecom Personal went through the process of issuing an RFP and evaluating and selecting a vendor but in the end decided not to launch the service. I believe that was a missed

As mobile operators finish completion of their budgets for 2009 and approach the holiday season, vendors anxiously await what will be one of the toughest years since the telecom downturn from the late 90's/2000. An interesting insight into what to expect for 2009 comes from Marc Beuls, President and CEO of Millicom, who presented to investors at the Morgan Stanley 8th Annual Technology, Media and Telecoms Conference in Barcelona just a week ago. Mr Beuls’ presentation has been posted on Millicom’s website at www.millicom.com and includes updated information on expected capital expenditures, cashflow and margins (see press release here ). Millicom continues its impressive growth with outstanding results; it reports a 71% in Honduras from Q3 07, 39% in Guatemala and 29% in El Salvador. Millicom operates in Latin American markets that are still growing but has gained market share from its main competitors in Central America, America Movil and Telefonica Movistar. Millicom is now the

Cellular News (link to story here ) reports that "... In its third quarter results for 2008 Telecom Argentina’s Personal unit recorded its fourth successive year-on-year increase in quarterly average ARPU – an impressive result in a market which now has a penetration rate of 104%". As we have mentioned here before, SMS represents for most countries in Latin America up to 90% of data revenue. SMS is a mature product that maintains its status as cash cow, however, the fact that this service is profitable and successful takes attention away from the fact that up until now, operators in Latin America have not been successful with the introduction of new services that effectively contribute to the bottom line. Recently we talked about how the recent launch of the iPhone in Latin America by Movistar and America Movil is shaping to be a missed opportunity (see here and here ) as they are NOT approaching it as an opportunity to increase data usage but rather treating at as just anot