As mobile markets mature, operators look to address rural areas cost-effectively

In recent years, mobile operators across Latin America have enjoyed addressing markets hungry for their services. Mobile penetration in the Americas (not including the USA and Canada) stood at 69.35% as of March 2008, according to World Cellular Information Service, a product of Informa Telecoms & Media. 

Growth has been strong. The penetration rate stood at 56.86% a year earlier, and at just 45.81% a year before that. However, for most operators, much of this growth will have come from addressing urban areas with the highest levels of solvent demand. There are now a number of reasons why the region's mobile carriers need to turn their attention to potential subscribers in the rural areas that have been harder to address up to now.

One such driver is the imposition of Mobile Number Portability across a number of the region's markets. Operators can expect to see high levels of churn resulting from this development and, if the experience of service providers in other world regions is replicated here, an expensively waged
battle to identify and keep the most profitable subscribers here may ensue. This battle could be at its fiercest in the most mature metropolitan markets where savvy consumers could look for the best deal on offer.

However, working harder to offer services to under-served areas and population segments may not be entirely a matter of choice for operators. In Brazil, Latin America's most competitive wireless market, regulators auctioned 3G spectrum in the 1900MHz band in December. All of the country's existing operators, except iDEN company NII Holdings, won spectrum at what analysts considered fair prices, but they are required to roll out extensive networks to address the disparity in telecoms coverage between urban and rural areas.

While much of the value of the overall telecoms sector in this region has been in mobile networks and services for some time, mobile operators should perhaps also not take it for granted that they will come first in the race to offer connectivity to Latin America's rural areas. In April 2008, Informa
Telecoms & Media went on a mission to make contact with some of the fixed-line operators that have traditionally been less exposed to the analysis firm's telecoms industry conferences and exhibitions, especially those away from the Conosur countries that are usually well-represented at Informa's
annual Americas Com event (formerly named GSM Americas). Joe Willcox, Head of Region, Middle East, Eurasia and Americas for Informa TM's Com World Series team, met state and co-op owned telcos in Paraguay, Bolivian and Venezuela and was struck by how keen these companies are to address the needs of people beyond the major population centres. Hugo Sosa Ortiz, Commercial Director of Paraguay's state-owned telco COPACO told Willcox about his company's relatively unusual approach to offering basic services in small communities. COPACO has acquired licences which allow it to use GSM equipment to offer fixed-wireless telephony in less densely populated regions of the country. In Bolivia, Willcox visit telecoms co-ops in Santa Cruz and Cochabamba and learned out these organisations' services for subscribers away from those two cities.

These visits were carried out with a view towards widening the scope of the former GSM Americas event, now re-branded Americas Com and reaching out to every kind of fixed, mobile and integrated carrier in Latin America. This year's event takes place once again in Rio de Janeiro, this time in
September.

For more information please contact Caroline Wiezien:
Email: caroline.wiezien@informa.com
Tel: +44 (0)20 7017 5605

Contact: Caroline Wiezien

Phone: 0044 207 017 5605