LATAM Telecom

This week I attended the 2009 Latin America Mobile VAS Forum in Miami (June 8-10), with the participation of analysts, technology vendors and operators. The global economic downturn is, not suprisingly, on everyone's mind. This topic kept coming up repeatedly and the attendance to the event, about half of what we saw in previous years is also an indicator of the tough times we face. However, it was encouraging to interact with technology vendors and operators who remain optimistic about the future. In the next weeks I will add more posts about this meeting and the discussions I had both with operators and technology vendors. This week, I want to share my thoughts on a presentation by Marcelo Castelo of the Brazilian Agency F.biz. Marcelo's presentation, titled "The Mobile as a Mass Media Channel With Internet Characteristics: The Possibilities of the Mobile Marketing" focused on case studies in mobile marketing from Latin America. The case studies shared by Marcelo s...

This is a draft of my presentation for the 2009 Mobile VAS Forum in Miami, June 9-10. 2009 IBC VAS Mobile Forum LATAM View more OpenOffice presentations from Raul Castanon .

A recent article published by the New York Times (Jill Colvin, "You’ve Got Voice Mail, but Do You Care?" , April 1st, 2009) announced the demise of Voice Mail and the rise of new technology and services such as Google Voice's Voice to Text and the iPhone's Visual Voice Mail. According to the article, most people don't bother to listen to their voice mail messages and that the technology is obsolete. Interesting article but Colvin's article misses the point: most of the new services she presents as examples of technology that is replacing voice mail are actually an evolution of voice mail technology. Voice to Text, for example, which is included in Google Voice, is a voice mail message delivery mechanism that allows text transcription of voice mail messages. This means that you have to have a voice mail message to begin with. It is new technology that provides a better user interface to recover voice mail messages, precisely what Colvin points out is missing fr...

IDC predicts worldwide mobile phone shipments will fall 8.3% in 2009 ( Cellular News ). Q4 08 shipments fell 11.6%, marking the first time the holiday quarter has not recorded double digit growth in seven years. IDC also scaled back the outlook for smartphones as a result of the industry's changing dynamics, reducing from previously stated 8.7% to 3.4% growth. It is expected, however, that in the coming years the industry will migrate toward the converged device segment and this segment will maintain positive growth in 2009. The explosive success of Apple's iPhone and the App Store have significantly affected demand for smartphones and are defining new industry trends, with other companies including Nokia, Verizon, RIM, Microsoft launching their own mobile application stores this year. A March ChangeWave survey of 4,292 cell phone owners confirmed a shift to smartphones, with Apple and RIM in a close race for market leadership while their competitors continue to suffer the eff...

Check out this SlideShare Presentation: Latin American Telecom Industry Outlook 2009 View more presentations from Raul Castanon .

Check out this SlideShare Presentation: 2009 Telecom Outlook View more presentations from Raul Castanon .

"This is the exact time to invest - if you can - because not only is there opportunity, but there are lots of resources out there." - Mike Lazaridis Picture: Research In Motion co-CEOs Jim Balsillie (left) and Mike Lazaridis THE CANADIAN PRESS/Nathan We are one quarter into 2009, a year that is turning out to be one of the most challenging to navigate in recent history. As this first quarter comes to an end I want to share my thoughts on what to expect for the rest of the year. Like other sectors of the economy, the Telecom industry faces huge economic challenges as the United States and other nations slip into a global recession: The Telecom Industry will face a slowdown in 2009; IDATE reports that the telecom equipment market will suffer a downturn with an expected growth rate of 1% compared to the year before. This will affect infrastructure and mobile phones; IDC predicts worldwide mobile phone shipments to fall 8.3% in 2009 . Companies will face the downturn by limitin...

Pinky: Gee, Brain, what are we going to do tonight? Brain: The same thing we do every night, Pinky - try to take over the world! Last week Google announced that GrandCentral, acquired by Google in 2007, is now Google Voice, with new features including voicemail to text and archive and search of SMS text messages. Analysts and bloggers are divided on how this will impact voice revenues from local and international calls, but the ability to offer free Internet calls will surely be seen as a threat. When Nokia announced last month that Skype came preloaded on the N97, it incurred the displeasure of mobile operators. According to Mobiletoday.co.uk , UK operators Orange and O2 may end up refusing to stock the N97 unless Nokia eliminated the application. The incursion of Skype and Google into telecommunications adds to the mounting pressure mobile operators are facing from new players. Last year, when Apple announced it was opening up its platform to developers, they redefined the power bal...

"Live a balanced life - learn some and think some and draw and paint and sing and dance and play and work every day some." - Robert Fulghum The market for mobile applications has changed significantly in the last four years, when I first started working with these applications. Four years does not sound like a long time but in this industry it means I have lived through several generations of devices and have seen some applications take off and many others fail. This year, analysts expect mobile applications to really take off; it is very exciting to see the industry reach this point, so I thought I'd share my experience and what I've learned in the process. Back then, Comverse was working on developing client applications that used new device capabilities to enhance network based services. These services included Call Completion, Mobile Instant Messaging, Address Book Backup, Mobile Email and Visual Voice Mail; each of them had different technical and commercial issu...

Despite the economic downturn, it is expected that the latest mobile applications for smartphones like BlackBerry and iPhone will drive industry growth in the coming years, providing alternate sources of revenue for operators. A new report by Juniper Research forecasts that smartphones will account for 23% of all new handsets sold by 2013 ( Cellular News ). Another report by Informa forecasts 35 percent growth in sold smartphones in 2009 and according to The Washington Post , Gartner expects smartphone sales to jump in 2009. The common element in these reports is the potential that innovative devices and applications have to promote mobile data consumption. This has industry players scrambling to secure their place in the value chain, including content providers, handset vendors and application developers. Handset vendors need to diversify into high-value content to offset falling margins on handset sales (1). This week, Nokia announced the arrival of new Nokia Music Stores, more Comes...

"When we long for life without difficulties, remind us that oaks grow strong in contrary winds and diamonds are made under pressure." ~Peter Marshall Technology companies tend to view the Latin American mobile market as a single block; this might be in part because of the similarities in key demographic and economic factors including language, GDP and mobile penetration as well as the presence of two large players -Telefonica and America Movil- that dominate the region. The Latin American mobile market, however, is incredibly complex. Each country shows remarkably different subscriber usage behavior patterns and adoption of technologies; this translates into different needs and consequently, different opportunities for each market. Opportunity Maps are particularly useful in analyzing and understanding these differences. The chart above shows three key factors: (x) Average Monthly SMS; (y) MOU - Minutes of Usage; and ARPU - Monthly Average Revenue per User (bubble size) for t...

"Out of suffering comes creativity. You cannot spell painting without pain." John Lithgow in Third Rock From the Sun Halfway through the first quarter of the year, the outlook for the economy continues to deteriorate with operators and technology vendors facing reduced CAPEX, delayed investments and slower growth rates. LATINFOCUS (January 2009) expects Latin America to grow at the slowest pace in seven years; industry analysts estimate wireless subscriber growth in 2009 to be between 5% (Yankee Group) and 8% (Moody's), down from double digit growth in previous years ( Reinhardt Krause , Investor's Business Daily). Moody's analyst Nymia Almeida ( Reinhardt Krause , Investor's Business Daily) states that operators like America Movil still expect a 10% subscriber growth but with mobile penetration reaching saturation in major markets and slower growth rates this year, the only way they can achieve this is via churn from other operators. What can operators do in...

With voice ARPU steadily declining and mobile penetration reaching 100% in major markets, operators in Latin America continue to explore different options for revenue generation services that will allow investments in 3G infrastructure to be recuperated. 3G technologies were widely deployed in Latin America during 2007 and 2008, but wireless Internet and data services are still in its infancy in the region; data represents on average less than 15% of total ARPU and SMS bring in most of data ARPU. In Latin America, LBS is not new but we had not seen any major breakthroughs until last week, when America Movil and Nokia announced a partnership to bring Nokia Maps Navigation to consumers in Latin America ( America Movil and Nokia Help Mobile Users in Latin America Navigate Their World , Feb 18, 2009). The other major announcement came a few days before the press release from America Movil. Ericsson announced a partnership with Networks in Motion to offer customers turn-by-turn directions ...

Check out this SlideShare Presentation: Voice Mail Strategy Chile View more presentations from Raul Castanon . (tags: voice mail )

"Nothing is more expensive than a missed opportunity." -H. Jackson Brown Jr.: Participants at the Mobile World Congress in Barcelona this week got a chance to discuss new and exciting trends in mobile services like Location Based Services, Mobile Entertainment, Mobile Advertising and Advanced Messaging services. However, the single topic that stole the show is the economic uncertainty that mobile operators and technology companies are facing. The keynote conference that opened the congress on Tuesday says it all: " Sustaining Growth in Challenging Times "(1). No one can argue that these are tough times but doing nothing seems to be the current modus operandi of the industry. My friend Mark Pendergast referred to me a great article by Professor John A. Quelch of Harvard " Marketing Your Way Through a Recession ". Published almost a year ago, it is even more relevant today: "In a recession, consumers become value oriented, distributors are concerned ab...

Sad In Blue (a lyric) by Peter S. Quinn Sad sad sad in blue For sad sad sad you The moon is all bluish tonight The night is all dark out side. So what does one wear to a recession? It doesn't really matter as long as you show up! This week technology vendors and operators meet at the Mobile World Congress in Barcelona and designers get to show their collections at Fashion Week in New York City. Both events might not seem to have much in common, but one topic is grabbing headlines at both: the economic downturn. At Fashion Week this year the events are less festive than usual; journalists and fashion bloggers are noticing: " Fashion Weak: Where has all the glamour gone? " (New York Post); " Fashionistas have turned into recessionistas " (USA Today). According to Christopher Muther of the Boston Globe , "there are fewer gift bags for fashion buyers and editors, and the steady stream of opulent parties has slowed to a trickle. Instead of pricey runway shows,...

Subscriber usage behavior clearly shows that the Latin American market is ready for a solution such as GSMA Personal IM, also known as SMS 2.0 (Telefonica Spain, Acision) or Instant SMS (Comverse). The chart above measures three elements: Data ARPU (x), mobile penetration (y) and average number of SMS messages per user per month for several Latin American countries (1) . The countries with SMS usage in the region are Venezuela, Argentina and Ecuador; with Colombia having the lowest SMS usage. These countries also have a higher data ARPU; this is not surprising as in Latin America 70% to 90% of data revenue comes from SMS. What's relevant here is subscriber SMS usage, surpassing 100 messages per user per month as in the case of Venezuela and more recently Argentina; this tells us that heavy users are actually having live conversations using SMS; in other words, a segment of subscribers uses SMS as Instant Messaging, with a higher number of messages going back and forth per conversa...

The time has come for SMS 2.0? In the last three years, we have seen vendors introduce new messaging solutions, all claiming to be the next step in SMS evolution. Presence enabled services have received a lot of attention but have limited traction in the mobile market. IM, by no means a new service, has been one of the most successful services but still far behind the penetration SMS has. SMS reached a mature stage years ago, its growth rate has flattened and it has kept the same form and functionality since it was first introduced. However, it remains one the top revenue generator for mobile operators. So what do you do for an encore? Cellular News published an interesting note on February 2nd: "­Acision has announced that Russian mobile operator, MTS is using its Instant Messaging solution to offer an enhanced messaging experience to its subscribers. Combining the Acision Person to Person Gateway with core elements from Colibria's product portfolio - including the Instant M...

"Measure what is measurable, and make measurable what is not so.” -Galileo Galilei The intersection of the mobile space and the Internet continues to be a challenge for mobile operators. Mobile advertising, for example, is getting a lot of attention in the mobile industry but it has yet to consolidate as a significant revenue generator (see Mobile Advertising - Learning to play by the rules ). Internet marketing and Web analytics have come a long way in the last five years, but there is still a long way to go in the mobile space. Interestingly, mobile operators are actually very good with metrics, when it comes to voice. They have precise indicators to evaluate network productivity, performance and utilization as well as detailed demographic and psychographic user data. However, when it comes to Web analytics, mobile operators have not even started exploring its potential. Even in the USA, operators lag behind other industries such as finance and retail. Other regions such as La...

"Nothing is more expensive than a missed opportunity." -H. Jackson Brown Jr. This is a follow up to my two previous posts where I discussed opportunities and my top five predictions for the Latin America mobile market in 2009. The global economic downturn has forced operators to take a second look at new investments for 2009; however, this can be a good opportunity to look at things differently. Operators can rethink their VAS strategy and Repackage, Reposition, and Reinvent services and adapt to succed in the new economic environment. What follows is a list of services that, based on my experience, have a higher probability for success in 2009-2010: Reinvent voice .... Operators will be watching CAPEX spending closely and looking for ways to reduce OPEX. In addition, voice will continue to be the greatest cash generator in the region through 2013; it therefore makes sense to think about services that will help them offer voice services as cost-effectively as possible. ... ...

During the last quarter of 2008, as they finalized budgets and CAPEX allocation for the coming year, operators around the world were forced to take a second look at their growth expectations and make drastic changes to their 2009 plans. Operators are preparing to face the economic downturn with layoffs and by reducing CAPEX and OPEX and vendors are reacting to these measures and to the economic environment in a similar way. The question that needs to be asked, however, is how will operators and vendors rethink opportunities for 2009? The economic downturn will force operators to be even more cautious with service rollouts and new investments (see Millicom , Telefonica ). There is no question that their priorities this year will focus on: Improving productivity Reducing OPEX Rollout of new services with minimal CAPEX and faster ROI. These guidelines provide a framework for rethinking VAS strategies and opportunities for 2009: Increasing voice revenues - Even if the economic downturn af...

"Profits are an opinion, cash is a fact." For my first post of the year, I will share my thoughts on what to expect for 2009, based on the economic outlook, industry trends and user behavior. So without further ado, here are my top five predictions for 2009 for the Latin America Mobile market: Growth will continue but at a slower rate than previously expected: Mr. José María Álvarez Pallete, General Manager of Telefónica Latinoamérica, stated last year that the region will continue to grow in subscribers and revenues, but given the economic crisis, it will be at a slower growth rate than previously expected. The 2008 economic downturn will very likely be the main factor affecting operator decisions. Mobile operators will be watching CAPEX spending closely and will be looking for ways to reduce OPEX spending in every way possible. They will be more interested in Value Added Services that can be deployed to the mass market, across a broad range of devices and that can be offe...