|Title:||Latin America top 20 countries by wireless telephone market penetration in percentages for 2009|
Start of full article - but without data
Ranked by wireless penetration in 2009
Rank Country Penetration
X Panama XXX.X% X Argentina XXX.X% X Guatemala XXX.X% X El Salvador XXX.X% X Uruguay XXX.X% X Honduras XXX.X% X Ecuador XXX.X% X Venezuela XX.X% X Chile XX.X% XX Colombia XX.X% XX Brazil XX.X% XX Paraguay XX.X% XX Dom. Rep. XX.X% XX Peru XX.X% XX Mexico XX.X% XX Bolivia XX.X% XX Nicaragua XX.X% XX Costa Rica XX.X% XX Haiti XX.X% XXX Cuba X.X%
Sources: International Telecommunications Union,
Latin Business Chronicle.
SAN JOSE -- As Costa Rica's state telecom provider prepares to face competition for the first time in its XX-year history, the company known as ICE has amped up marketing and customer service like never before.
From January to March, customers who bought a new wireless phone, prepaid plan or service package were entered into a raffle for tickets to a Shakira concert or to an international soccer match at the new National Stadium in San Jose. ICE also recently offered free phone upgrades to the X,XXX subscribers across the country who were still relying on older models with outdated TDMA technology and it constructed service centers in rural areas.
Driving these promotional efforts is the looming arrival of two deep-pocketed multinationals who are Latin America's top panregional wireless operators. Although the passage of the Central American Free Trade Agreement (CAFTA) in September 2009 eliminated, at least on paper, ICE's monopoly over cellular service, the move to an open market was slowed by debate over industry guidelines and by bureaucratic delays.
In September of this year, two years after CAFTA was adopted, the last state-run wireless monopoly in Central America will finally come to an end when Mexico-based America Movil and Spain's Telefonica launch service in Costa Rica.
Market observers predict a radical transformation of the industry in this nation of X.X million people. Pyramid Research, the Cambridge, Massachusetts-based specialist in the telecommunications industry, estimates that ICE could lose as much as XX percent of its market share by 2015. An estimated X million Costa Ricans currently have cellular service from ICE.
"In soccer terms, this will be like a game between one of the world's best teams, like Brazil or Spain, against a high school team," says Juan Manual Campos, a lawyer with the telecommunications law firm Ciber-Regulacion Consultores. "ICE has never had to compete for users in its own market. Learning how to thrive in a competitive market Hill be an entirely new challenge for them. Telefonica and America Movil, on the other hand, are already competing--and dominating--markets in Latin America. They already have strategies in place for penetrating markets and know how to gain market share. They should have no problem doing so in Costa Rica."
America Movil has committed to invest $XX million in infrastructure and market development in Costa Rica; Telefonica has promised to spend $XX million. In early March, both companies had begun construction on customer-service centers throughout the capital.
But not everyone is convinced that ICE will suffer a dramatic fall from grace. Given its dominant market-share position, some people think ICE will be tough to topple. It also offers fixed-line and Internet services.
"Costa Rica is a small market, and about XX to XX percent of the people in the country already have service plans with ICE," says Carlos Gallegos, telecommunications director of the consulting firm Deloitte in Costa Rica. "The challenge for the incoming companies will be finding new users or taking current users from ICE. This market has already been penetrated, so I think getting users to switch to new providers will be a challenge, even for the big companies that are entering the market."
Yet some consumers are eager for options. Service from ICE has its flaws. Every few weeks, coverage will fail National text messaging sometimes is not available for three-hour stretches.
Costa Ricans will receive the "same high level of service that has resulted in ... [millions of] Latin American users," says Ricardo Taylor, executive director of America Movil in Costa Rica. As of December, 2010, America Movil boasted a total of XXX.X million wireless subscribers in Latin America.
ICE might serve a base that is just X percent the size of America Movil's panregional one, yet the company's president, Eduardo Doryan, says the company is up to the challenge.
"Our goal is to maintain as much market share as we can, and we have prepared a strategy that will allow us to do so," he says. "We have no fear of the competition. The market has space for one and for all. They have their clients, and we will have ours. ... But I can assure [you] that we will defend our revenue with all of our strength, and that we fully expect to remain the primary telecommunications company in Costa Rica."
Meanwhile, no one disputes that the companies that manufacture the wireless handsets will be big winners from the heated competition.
"We will enter Costa Rica strongly," says Teofilio Palacios, vice president for Latin American Telecom Operations at Korea-based Samsung Electronics, the world's second-largest wireless phone producer. Part of his optimism stems from the fact that the company has a strong brand name from other products.
"We already have a presence there with other Samsung products," Palacios says.
The competition in Costa Rica is expected to bring the country in tune with the rest of Latin America, which has seen a dramatic increase in wireless phone sales and subscriptions over the past decade. Thanks to the monopoly of ICE, Costa Rica has long been a regional laggard in wireless. Its penetration rate is higher than only Cuba and Haiti in Latin America, and it is lower than its poorer neighbor Nicaragua, according to the Latin Technology Index from Latin Business Chronicle.
In the 2005-XX period, Costa Rica posted the second-lowest growth in wireless subscriptions in Latin America. Only Chile--which has long been a highly competitive and saturated market--posted a smaller increase, according to a Latin Business Chronicle analysis of data from the International Telecommunications Union (ITU).
BRAZIL: RISING TIDE
Data services are driving top-fine growth in Brazil, where the leading providers are Telefonica subsidiary Vivo; Claro; TIM, a division of Telecom Italia; and locally owned Oi, in which PT Telecom owns a stake.
"All the companies indicate that the income from data will become more important," says Luis Fernando Azevedo, a telecom analyst with Bradesco. "Vivo currently has around XX percent in data. We think they surpass XX percent by 2013. TIM is at around XX percent and should go to XX percent over the next three years."
Although analyst Alex Padellas, who covers telecoms at Banifbank, agrees that demand for data services will grow, he cautions that it is starting from a low base.
"For demand for these things [data, music, videos and Internet] to increase significantly, you need to have a rise in incomes," he says.
The mobile providers are nonetheless investing in their XG coverage and capacity, which will support more consumer usage of smartphones, mini-models, notebooks and tablets, Bradesco's Azevedo says.
He also predicts that prices of voice services Hill come down.
"Minutes will be cheaper. Smartphones Hill be cheaper and more accessible," he says. "And as the companies invest, the services Hill get cheaper. SMS [texting] services are already growing, and you have more applications for that."
Renata Gammarano, a bank employee in Sao Paulo, exemplifies the trend. She uses an iPhone.
"I am totally addicted. It's like my child," she readily admits. "I wouldn't dream of getting any other kind of phone."
The iPhone design and iPod music function were determining factors in Gammarano's December 2009 purchase, but now she uses her smartphone for e-mail and to go online, principally to Facebook. She uses the Skype function and sends a lot of text messages. Gammarano upgraded to the latest model, an iPhone X, in December.
"It really is the best," she says.
Brazil had XXX million mobile lines at the end of 2010, representing an astonishing penetration rate of XXX percent, according to Padellas, who estimates that the number rise to XXX million by year-end 2011.
"There are more lines than people because one person has two or three or four lines," he says. "If he wants to talk to someone with a TIM, he puts a TIM chip in his phone, and TIM to TIM is free. And then if he wants to talk to someone with Vivo, then he'll put a Vivo chip in because it might have an offer on. That's why the penetration is so high. Otherwise, it would be XX to XX percent."
With Brazil's upper classes oversubscribed, new wireless customers are coming from the lower economic strata, and they favor prepaid services, which account for XX.X percent of all mobile accounts, Padellas says.