MARKET INSIGHT: KEY MARKET DATA,
STATISTICS AND GROWTH PATTERNS
                             Marco Pangos
                ...
Regulatory status – Argentina
                                                   Page   2



 New Regulation for Universal...
Regulatory status – Brazil
                                                        Page   3



 Voice
 – Number Portabilit...
Regulatory status – Chile
                                                                            Page   4



 Univers...
Regulatory status – Colombia
                                                                      Page   5



 Definition...
Regulatory status – Ecuador
                                                                 Page   6



 Identification o...
Regulatory status – Peru
                                                                           Page   7



 Number Po...
Regulatory status – Mexico
                                                                      Page   8



 Cofetel auct...
M&A activity in Latin America
                                                                                            ...
Argentina - 2009
                                                                 Page   10



                           ...
Brazil - 2009
                                                                    Page   11



                           ...
Central America - 2009
                                                                                     Page   12



 ...
Chile - 2009
                                                                    Page   13



                            ...
Colombia - 2009
                                                                   Page   14



                          ...
Ecuador - 2009
                                                                   Page   15



                           ...
Mexico - 2009
                                                                    Page   16



                           ...
Peru - 2009
                                                                    Page   17



                             ...
Venezuela - 2009
                                                                    Page   18



                        ...
Key drivers for voice and data in Latin America
                                                                          ...
Key drivers for voice and data in Latin America
                                                                          ...
Regional connectivity and capacity
                                                        Page   21



 Limited capacity ...
Regional connectivity and capacity
                                            Page   22



 Latin America is increasing I...
Regional connectivity and capacity
                                     Page   23
Regional connectivity and capacity

                                     Page   24



 Cisco Forecasts 44 Exabytes per
 Mo...
Regional connectivity and capacity - Conclusion
                                                                          ...
Obrigado - Gracias - Thank you
Marco Pangos
marco.pangos@ieee.org
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Market Insight Marco Pangos 16mar09

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Status of the Latin American Market 2009

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Market Insight Marco Pangos 16mar09

  1. 1. MARKET INSIGHT: KEY MARKET DATA, STATISTICS AND GROWTH PATTERNS Marco Pangos marco.pangos@ieee.org
  2. 2. Regulatory status – Argentina Page 2 New Regulation for Universal Service Radio electrical Spectrum – Cooperative Mobile Services VoIP services Triple Play – Cable TV vs. Telcos Define new Tariff policy to promote growth Define Present & Future Investments Financing Risk of Nationalization of Carriers TASA - TECO
  3. 3. Regulatory status – Brazil Page 3 Voice – Number Portability ( approved Mar’07 - < Mar’09) – VoIP services – Efficient use of the spectrum Data – Auction of 3G (Band H) & WiMax frequencies Video – Bill 29 – Pay TV Law Tariffs – Cost Modeling for Interconnect Network Use – Weighted Average Cost Of Capital (WACC) Regulation
  4. 4. Regulatory status – Chile Page 4 Universal Access to Telephony VoIP service regulation whenever it involves need of a PSTN Number Portability – Fixed and Mobile New Law to allow to subsidize telecommunication projects of interest to the demand (today’s Chilean Law only allows to subsidize the offer) Law declaring Internet neutral from the flow of the services it carries. Generation of indicators of quality of service for Internet access operators.
  5. 5. Regulatory status – Colombia Page 5 Definition of relevant markets and dominant position in convergent markets of telecommunications Regulation measures for generation of wholesale telecom supply Number Portability (approved May’08 – until 2012) Regulation of convergent networks Regulation on cyber-security Numbering plan for nomadic telephony
  6. 6. Regulatory status – Ecuador Page 6 Identification of prepaid mobile subscribers Number portability (approved May’08) Regulation for Infrastructure sharing Technical Regulation on Access to Emergency Services Regulation of the Centers of Internet Access and Cyber Cafes.
  7. 7. Regulatory status – Peru Page 7 Number Portability (approved Apr’07 - > Jan’10) New Regulatory framework for Digital TV Approval of a bill for the development of telecommunication services in rural areas New Classification of Services Regulation for Infrastructure Sharing
  8. 8. Regulatory status – Mexico Page 8 Cofetel auction of 1900 MHz band for fixed wireless or mobile telephony Cofetel auction of WiMax frequency band (3.4 GHz – 3.7 GHz) Cofetel auction of 3G frequency band (1.7 GHz – 2.1 GHz) Obligation to register PrePay mobile phone users Number Portability (> Jul’08) Fundamental Technical Plan of Interconnection and Interoperability The Regulator does not exist
  9. 9. M&A activity in Latin America Page 9 Argentina – Telmex – Ertach Brazil – Oi – Brasil Telecom – TIM - Intelig – NET - Big TV – Vivo - TIM Chile – Telmex - ZAP TV Colombia – Telmex – TV Cable – Cable Centro – Cable Pacifico – Superview- SatelCaribe Mexico – Telmex – MVS alliance – Telefonica – Televisa alliance – Telefonica – Axtel alliance Venezuela – Telmex – CANTV – Risk of nationalization of other carriers Conclusion – Search for quadruple play offer, lower cost for subscriber, fidelize voice & data users adding video/TV services. – May become monopoly if not regulated
  10. 10. Argentina - 2009 Page 10 BASE BROADBAND MOBILE PAY TV TELEPHONY 31.0% 48.0% 34.2% 30.0% 42.0% 28.7% 27.0% 52.0% 34.8% Cooperatives 5.3% Rest of mkt 12.0% 4.7% 2.3% 48.0% Total (‘000) 3.348 9.345 43.369 6.022
  11. 11. Brazil - 2009 Page 11 BASE BROADBAND MOBILE PAY TV TELEPHONY 25.2% 26.5% 29.8% 8.5% 18.6% 19.1% 3.7% 20.7% 34.5% 16.2% 22.7% 15.0% 25.7% 50.4% 30.1% 24.2% 1.9% 0.7% 2.9% Rest of mkt 12.1% 4.8% 0.4% 6.2% Total (‘000) 9.862 41.563 150.641 6.162
  12. 12. Central America - 2009 Page 12 EL GUATEMALA NICARAGUA PANAMA COSTA RICA HONDURAS SALVADOR 22.2% 16.7% 31.1% 49.5% 35.0% 25.6% 68.9% 42.2% 42.8% 42.6% 57.8% 14.8% 0.3% 50.5% 100.0% Total Mobile 10.079 5.858 3.123 3.053 1.714 4.954 lines -2009 (‘000) Total Fixed lines 1.355 1.080 248 447 1.437 822 (2007)
  13. 13. Chile - 2009 Page 13 BASE BROADBAND MOBILE PAY TV TELEPHONY 10.0% 63.5% 43.4% 17.5% 38.5% 40.9% 18.1% 59.6% 0.8% 1.6% 18.2% 12.2% 2.3% 4.0% 38.4% 2.1% 4.4% 4.7% 5.9% 0.4% 7.2% Rest of mkt 0.3% 2.5% 3.5% Total (‘000) 1.430 3.333 15.491 1.475
  14. 14. Colombia - 2009 Page 14 BASE BROADBAND MOBILE PAY TV TELEPHONY 20.6% 29.2% 24.5% 4.5% 21.2% 18.1% 16.4% 19.9% 3.9% 66.3% 57.5% 20.7% 26.2% 9.2% 6.7% 5.5% Rest of mkt 17.6% 22.6% 9.4% Total (‘000) 1.920 7.817 40.740 3.189
  15. 15. Ecuador - 2009 Page 15 BASE BROADBAND MOBILE PAY TV TELEPHONY 3.3% 26.4% 18.6% 53.3% 38.3% 6.6% 54.2% 69.5% 3.2% 0.1% 2.2% 70.1% 4.4% 3.5% 10.7% Rest of mkt 14.1% 1.7% 19.8% Total (‘000) 119 1.859 11.163 244
  16. 16. Mexico - 2009 Page 16 BASE BROADBAND MOBILE PAY TV TELEPHONY 0.3% 19.8% 76.1% 88.0% 71.5% 5.2% 3.5% 0.5% 2.0% 0.3% 3.6% 0.5% 11.9% 3.1% 0.3% 8.4% 23.6% 6.5% 1.5% 21.7% 1.6% 4.8% 0.3% 0.3% Rest of mkt 8.3% 2.3% 34.1% Total (‘000) 6.550 20.023 78.192 7.056
  17. 17. Peru - 2009 Page 17 BASE BROADBAND MOBILE PAY TV TELEPHONY 90.6% 96.1% 62.4% 73.4% 4.1% 1.1% 0.6% 3.1% 2.8% 34.5% 5.2% 0.1% 3.1% 6.2% Rest of mkt 1.0% 0.5% 15.2% Total (‘000) 732 2.900 17.000 891
  18. 18. Venezuela - 2009 Page 18 BASE BROADBAND MOBILE PAY TV TELEPHONY 0.3% 20.9% 37.3% 79.5% 77.9% 43.0% 19.7% 13.0% 20.2% 40.2% 33.4% 5.8% Rest of mkt 1.2% 7.6% Total (‘000) 1.312 5.896 28.232 1.800
  19. 19. Key drivers for voice and data in Latin America Page 19 Substitution Fixed – Mobile – The fixed-mobile substitution keeps growing – The substitution effect is more accentuated in the base of the pyramid and in the young segment – UMTS vs ADSL Broadband Growth – Economic expansion, credit, incentives, etc. – Diffusion of computers is a fundamental requisite for universal use – Governmental actions might speed up the process of universalization New Technologies – 3G/LTE (4G) – WiMax – FTTx
  20. 20. Key drivers for voice and data in Latin America Page 20 VoIP – VoIP poses a threat to the fixed voice market, and tends to increase with the broadband expansion – Phone-to-phone model via cable operators is clearly the largest threat among the VoIP players – Broadband penetration and price are the key drivers of VoIP adoption Erosion of the Business frontiers – Bundles play a key role in the market and make sense to operators and clients – Triple play will be the most expressive bundle and TV will play a core role Content and aggregation – SMS Corporate Business Applications – Require increased bandwidth and QoS – For National/International traffic, private VPN and QoS are key requirements The crisis boosts use of “free” products (Skype, You Tube)
  21. 21. Regional connectivity and capacity Page 21 Limited capacity in Mexico and Central America. Project Puebla – Panama Very limited network flexibility Lack of good connectivity at country level Submarine Cables with good capacity and with possibility to further expand its performance using DWMD at access line Incoming platforms present too high latency in nodes Corporate demand requires for a technology upgrade: – FR to VPN – MTLS protocol Capacity is measurable … what about demand?
  22. 22. Regional connectivity and capacity Page 22 Latin America is increasing Internet use The region needs to communicate with the world Market penetration is higher than the worldwide average Current trend is of fast growth
  23. 23. Regional connectivity and capacity Page 23
  24. 24. Regional connectivity and capacity Page 24 Cisco Forecasts 44 Exabytes per Month of IP Traffic in 2012 Cisco’s Global Consumer Internet Traffic Forecast
  25. 25. Regional connectivity and capacity - Conclusion Page 25 2008 Latin American Capacity & Demand projections show: Capacity is growing in a linear mode Demand is growing in an exponential mode Result: capacity reaching saturation much quicker than expected Brazil may reach saturation by year 2011 at actual growth rates Need for further network upgrades and new investments Important : Need to negotiate as a Latin America economic block not individually. Emergent markets in strong need for communication and connectivity Business will exist and grow as much as we can communicate regionally and to the world
  26. 26. Obrigado - Gracias - Thank you Marco Pangos marco.pangos@ieee.org

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