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Frost & Sullivan: Explosive Growth in Latin American
Cellular and PCS Services Markets Set to Soar Even
More
PR Newswire - August 03, 1998 08:19
MOUNTAIN VIEW, Calif., Aug. 3 /PRNewswire/ -- Most North Americans cannot imagine the
meaning of wireless technology to Latin America, where many people wait years before getting a
telephone. Low wireline teledensity rates and high unmet demand are some of the factors that define
and expand the roles of PCS and cellular services in Latin America in comparison to other regions.
This expanded role has driven wireless telecommunications services have become the most dynamic
segment in the telecommunications sector throughout Latin America, with a stunning growth that is
expected to continue over the coming years.
According to new strategic research by Frost & Sullivan (www.frost.com), Latin American Cellular
and PCS Service Markets, this $7.1 billion market will more than triple by 2004. The study
presents data, forecasts and analysis of the largest wireless telecommunications services markets in
the region Argentina, Brazil, Chile, Colombia, Mexico and Venezuela, and illustrates how the arrival
of PCS will impact not only the wireless sector but the whole telecommunications industry
throughout Latin America.
PCS and cellular services markets have yet to reach their peak, indicating that profits are going to
soar even higher. High growth rates are taxing the capacity of the infrastructure, leading to heavy
investments at a time in which competition will increase significantly. Opportunities exist, as all the
markets have experienced significant growth over the 1996-1997 period, and the compound annual
growth rate for each country is projected to grow steadily at least until 2004.
All six countries covered in this study are experiencing significant growth, yet some have progressed
faster than others. Some countries are emphasizing the pre-paid services as their main strategy for
penetrating the market, and currently, PCS services are expected in four out of the six countries by
the end of 1999.
Changes are ongoing. Currently all markets either utilize Calling Party Pays or are expecting to do
so. Additionally, all markets have introduced or are in the process of offering digital services,
improving service and capacity.
Deregulation of basic telephony throughout the industry will create unexpected synergies. "The
market is extremely competitive, forcing providers to be creative and flexible in designing strategies
to tap many market niches and revenues," according to Frost & Sullivan's Telecommunications
Industry Analyst Juan Fernandez. It is also expected that the business sector will drive up revenues
by demanding value-added services such as e-mail, fax, data and paging.
Wireless telecommunications services are one of the few competitive market segments in most of
the countries in the region. Only two wireline markets in the region will be deregulating in 1998,
while all wireless services markets are competitive.
The major Post, Telephone, and Telegraph administrations (PTTs) are present in the majority of the
markets. In some of these markets, they are also the dominant wireless player. In Mexico and Chile,
Telcel and CTC have leveraged their presence in the wireline market to dominate the wireless
market as well.
"Carriers that have nationwide coverage and compete in markets that are divided into regions have
gained a distinct advantage from this situation," says Fernandez. "This has been exploited by
eliminating roaming charges, pressuring the competition to follow suit, lowering their earnings and
power in the market."
While this is a flourishing market, this research also accounts for developing threats in the
marketplace. The entrance of PCS services in all markets will double the number of competitors in
each area, forcing existing companies to increase marketing efforts and to develop strategies to help
prevent product differentiation. These are just some of the threats analyzed in Latin American
Cellular and PCS Service Markets.
Some of the current trends sweeping the industry include: digitalization of cellular networks,
evolution towards third-generation systems (which will allow broadband wireless data for
applications such as Internet access), access to Intranets and file transfers, as well as the use of
pre-paid cards and smart cards for the mass consumer market. This study from Frost & Sullivan is
an excellent reference for the crucial information you need to be ahead in this market.
Frost & Sullivan bestows Market Engineering awards upon the members of the Latin American
Cellular and PCS Service Markets that have worked to demonstrate excellence in marketing
strategy design and implementation. In 1997 the Medellin, Columbia-based company Occidente y
Caribe S.A. (Occel) has been selected as the winner of the Market Engineering Marketing Strategy
Award.
"Occel possesses a well-developed and well-integrated marketing program that is based on
performance measurements and encourages marketing efficiency. The marketing strategy has
contributed greatly to the company's image in the marketplace, market share and profitability," says
Fernandez.
The technologies reviewed include digital cellular, CDMA, TDMA, Analog cellular, AMPS, PCS,
GSM, TDMA, GSM and wireless local loop (WLL).
Market participants for Argentina include: CCPI, Compania de Telefonos del Interior-CTI,
Movicom, Movistar Miniphone, Telecom Argentina, Telefonica de Argentina, and Telefonica
Comunicaciones Personales. Market participants for Brazil include: Americel, Ceterp, CRT,
CTBC, Telebras, and Telesp. Market participants for Chile include: BellSouth, Inc., Chilesat
Comunicaciones Personales, Entel PCS, and Startel. Market participants for Colombia include:
Celcaribe (Empresa Regional de Comunicaciones del Caribe), Celumovil de Colombia, Cocelco
(Compania Celular de Colombia), Comcel, and Occel (Occidente Celular). Market participants for
Mexico include: Baja Celular Mexicana, Cedetel, Grupo Iusacell, S.A. DE C.V., Movitel, Norcel,
Portatel del Sureste, and Radiomovil Dipsa (Telcel). Market participants for Venezuela include:
Movilnet, and TelCel Celular CA.
This Telecommunications Industry research has integrated the Market Engineering consulting
philosophy into the entire research process. Critical phases of this research included: Identification
of industry challenges, market engineering measurements, strategic recommendations, planning and
market monitoring. All of the vital elements of this system help the market participants navigate
successfully through the telecommunications market.
Frost & Sullivan is an international marketing consulting company that monitors the
telecommunications industry for market trends, market measurements and strategies. This ongoing
research is utilized to update a series of research publications such as #2677-62, U.S.
Telecommunications CPE Overview Distribution Channel Analysis, and to support industry
participants with customized consulting needs.
Visit Frost & Sullivan's web site at: frost.com.
Report: 5337-65 Date: July 1998 Price: $3450
SOURCE Frost & Sullivan
/NOTE TO EDITORS: Free executive summaries of all Frost & Sullivan
reports are available to the press./
/CONTACT: Kimberly Barney of Frost & Sullivan, 650-237-4383, fax,
650-903-0915, or kbarney@frost.com/
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ext. 573125/
/Web site: frost.com |
