Operators turn to next-generation networks and mobile data as markets mature

Mobile markets in Latin America and North America are becoming increasingly saturated, but most operators are continuing to expand their subscription bases and build new revenue streams based on data-centric offerings.

The Latin America mobile market is expected to reach 88% penetration by end-2009, according to Informa Telecoms & Media. Some of the most mature markets, including many in the Caribbean, are already at or beyond 100% penetration, largely due to ownership of multiple SIMs by customers and the sale of SIMs to tourists. Yet even the largest markets on the continent are becoming saturated. For instance, Argentina is expected to reach 119% mobile penetration
by end-2009.

In order to drive growth, Latin America's mobile operators are increasingly turning to new data-centric revenue streams. During 2008, virtually every major Latin American mobile operator launched 3G services. Further investment in 3G networks will accelerate as network operators look to mobile broadband offerings to offset falling voice revenues and satisfy the growing hunger for data services.

Informa expects that WCDMA will dominate net adds in Latin America during 2011, when it will finally surpass GSM's net additions in the region. By end-2012,GSM will show negative net adds while WCDMA will continue to gain new subscriptions. Several markets in Latin America, including Argentina, Chile and Mexico, could soon welcome new competitors, thanks to planned spectrum auctions.

Privatization and liberalization will also change the competitive landscape in some areas. For instance, the Bahamas is moving to privatize its incumbent state owned telco, and Costa Rica is expected to introduce competition by issuing licenses to new market entrants that will compete against its incumbent state owned operator.

The North American mobile market also continues to grow despite increasing saturation. Informa Telecoms & Media forecasts that Canada's mobile market will near 70% penetration at end-2009 while the US market will surpass 90% penetration.

Mobile data is a success in North America. Thanks to the growing adoption of smartphones and wider availability of mobile content and applications, North America leads the world in data ARPU, which is nearing US$13 per month.

Further, in order to create new revenue streams, North American mobile operators are increasingly delving into consumer electronics and machine-to-machine (M2M) communications. Wireless-enabled netbooks and laptop computers, electronic readers, healthcare products and utilities-monitoring devices are all expected to contribute to new mobile data revenue streams.

Both Canada and the US conducted major spectrum auctions during 2008,setting the stage for the deployment of next-generation mobile networks by incumbent mobile players and the launch of mobile networks by new market entrants. These will potentially foster more innovation as rivals strive to survive in the increasingly crowded mobile marketplace.