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April 15, 2009
The mobile market in Honduras, currently dominated by Tigo with a 73% share, has become more competitive over the past six months with the arrival of Digicel. The Caribbean operator, which launched operations in the last quarter of 2008, is trying to attract new clients with an aggressive campaign that encourages subscribers to increase usage of its services. For local calls, Digicel is running a promotion where users pay only for the first minute of a 15-minute call (see graphic). To get unlimited minutes for the whole day, users pay 10 lempiras (US$0.50). In addition, to tap into the outgoing international calls market, Digicel is charging only for the first minute of a 10-minute call to the US and Canada. The company is now expanding its strategy into SMS, charging lower tariffs after the first billed message.
Marketing from Digicel promoting its “pay one minute, talk for 15” campaign

Source: Digicel
The strategy aims to increase the usage of its networks while not affecting ARPS. As we described in our recently published Communications Markets in Honduras, the mobile minutes of usage in Honduras closed around 43 in 2008, well below the Central American average of 88. Digicel will protect its ARPS by encouraging users to make more frequent and longer calls, thereby collecting more revenue on the aggregate, despite a decrease in its revenue per minute. We expect to see other versions of this strategy coming from Claro and Tigo, as well, such as a fee for making unlimited local calls for one day or calls to the US being considered local. Currently, Tigo leverages its presence in Honduras by charging a reduced tariff to a group of numbers picked by the subscriber; Claro has similarly started to offer free calls to three mobile users within a subscriber’s network.
We anticipate that Digicel’s efforts to gain ground will be successful and that the operator will grab one-fifth of the market over the next five years at the expense of Tigo and Claro.
— Jose Magana, Analyst
Related content:
Communications Markets in Honduras
Country Intelligence Report published March 2009
The telecom market in Honduras generated $863m in 2008. With low penetration in both fixed and mobile services, compared with larger markets such as Guatemala and El Salvador, Pyramid Research expects a 4.6% CAGR expansion driven by mobile data services and broadband Internet, which will offset declines in fixed circuit voice and dial-up Internet. Tigo will remain the leader while Digicel starts gaining position in the market. This Country Intelligence Report analyzes Honduras’ communications, media and technology industries, including key trends, regulatory pressures and the competitive landscape, making it an excellent complement to our Forecast products.
Latin America Mobile Demand Forecast, Q1 2009
Forecasts published March 2009
Updated on a quarterly basis, our Mobile Demand Forecast products provide complete pictures of demand trends for 19 geographical markets in Latin America. The Excel output includes five years of historical data and five years of market projections for metrics such as GDP, mobile penetration, subscriptions (by operator, type of package, technology), ARPS and total mobile service revenue (data and voice). The Forecasts are based on extensive field research and use a consistent methodology across all markets, aiming to capture the total spending, from an end-user perspective, on mobile communication services in each market.
Mobile Advertising in Emerging Markets: Market Trends and Strategies for the Third Screen
Research Report published February 2009
Leading operators are pushing a variety of advertising methods, from sponsored messaging and alert services to more sophisticated content over mobile portals, and mobile advertising will markedly boost mobile data service revenue. This report looks at mobile advertising initiatives and the revenue potential in emerging markets, with a particular emphasis on Brazil, China, India, Indonesia, Mexico, Romania, Russia, South Africa and Turkey. We also put our findings in context by making comparisons with global trends and developed markets, such as the US and UK.
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