VAS Latin America: hits and misses of 2008

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 what it takes to work together. If this is an indication for things to come in 2009, its competition had better watch out.


• Millicom announces Q3 08 results - Millicom continues to grow and show impressive results year after year. Marc Beuls, President and CEO of Millicom, reported a 71% growth in Honduras from Q3 07, 39% in Guatemala and 29% in El Salvador. Why is this GOOD? Millicom operates in markets that are still growing but its growth comes also from increased market share; Millicom is now the market leader in Central America and far ahead of its main competitors, America Movil and Telefonica Movistar.


• Brazil operators announce GSMA Personal IM initiative - early this year we posted about the Personal IM initiative in the Brazilian market by Vivo, Claro, Oi, Brasil Telecom, Telemig Amazonia and TIM. Why is this GOOD? Even though it was planned for Q2 08 and probably won't launch until mid 2009, this initiative is groundbreaking because of its scope -Brazil is by far the largest market in the region- and for being the first initiative in Latin America that brings together different operators towards a common goal.

The bad??? Not really bad but not good either; both examples below are actually golden opportunities waiting to happen. If things remain the same by December 2009 we will move them to the really bad and ugly!

• Telecom Personal Argentina continues SMS growth - On November 25, Cellular News (link here) reported 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", with SMS usage driving this growth. Why is this BAD? Even though this is good news for Telecom Personal, the fact that SMS is driving growth might indicate the need to pay more attention to other messaging services such as MMS, Instant Messaging, Personal Messaging and other data services.


• 3G fails to live up to expectations - In December 2007, we wrote about how Latin America operators were fast deploying 3G in the region (Fatima Raimondi: "3G deployment is no longer a fantasy in the region"). America Movil and Telefonica Movistar, quickly deployed 3G in the major markets as well as other market leaders such as Entel PCS; Millicom is the latest major player to join the 3G club. Why is this BAD? The question that remains after more than one year is what does 3G bring to Latin American markets? Most operators in deployed 3G during 2007 and 2008, but so far they have failed to introduce new VAS services and make a significant impact on ARPU. This is evident in subscribers' perception of 3G, they don't know how it improves the service offering but believe that 3G services are "more expensive". Instead of working on a strategy around 3G, operators cautiously watch each other waiting to see who makes the first move. A good example of this is Video Call, which America Movil launched with much fanfare in Central America, even before they had 3G devices available. Telefonica and Millicom waited to see how the market would react. In the end, no one actually promotes the service but it became a "must have"; this is a complete waste of resources and a missed opportunity. Even though 3G services and video call in particular have failed to live up to expectations in other regions, operators around the world have managed to make an impact with subscribers with some creativity; there are interesting case studies in Western Europe and Asia that operators in Latin America can learn from.

The really bad and ugly!!!!

• Movistar rushes to launch iPhone - almost a month after America Movil announced it was launching the iPhone in Latin America, Telefonica Movistar announced they had also reached an agreement with Apple to distribute the iPhone in most of its operations in Latin America. Telefonica Movistar was able to mitigate America Movil's initial lead but in its rush to lauch the iPhone, they left out services; it seems that for them it was more important to come out with the device at the same time as America Movil than to do proper launch as it has been done everywhere else in the world. With this, they may be missing a golden opportunity to revamp data and messaging services.

That's it! I hate to be negative but there are things that must be said! I am now preparing my next post which is very positive :-) opportunities for 2009 in a downturn economy.

Happy New Year to all and best wishes for 2009!