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July 15, 2010
Fixed broadband penetration remains below 20% in a number of Latin American markets, with price points that are too high for most customers, thus creating an opportunity for alternative solutions. There is no solution less cumbersome and more flexible than the 3G access, which is why this type of access is taking the lead in Internet subscriptions in the region.
However, as 3G becomes more popular and the market becomes saturated, mobile operators will have to broaden their target market and rethink their offerings. By having an offering that is exclusively postpaid, mobile operators are leaving out 4/5 of potential mobile Internet subscribers.
As the Internet becomes an essential service to mobile operators, prepaid users will have to be reached, which will soon open the large market of prepaid mobile broadband in Latin America. Read more about it in my Insider, Prepaid Mobile Broadband Presents a Big Opportunity for Latin American Operators.
First characterized as a solution for low-income or poor customers, prepaid billing model has enjoyed resounding success in Latin America becoming the leading type of mobile account in the region. Therefore it is natural that mobile Internet service will follow the same path, becoming a must-have offering in all operators’ portfolios.
It is important to mention that customers are not the only ones to benefit from this movement towards prepaid. Mobile operators can increase their ARPU as they offer a solution with very little client acquisition cost, and they can also make occasional users loyal to their company, therefore reducing churn, among other benefits.
— Vinicius Caetano, Senior Analyst
Related resources:
Market Factors Indicate Stronger Growth for Multi-SIM Handsets
Global Telecom Insider published June 2010
Multi-SIM handsets will enjoy increasing popularity and adoption, particularly in low-income, competitive and highly prepaid markets. Low-cost handset vendors are being joined by global handset brands now that the multi-SIM segment has reached a size and level of importance that no longer can be ignored, increasing the variety available and spurring innovation.
Mobile Data Pricing Plans: How Operators Can Escape the “All You Can Eat” Trap
Global Telecom Insider published June 2010
This Global Telecom Insider analyzes the evolution of pricing for mobile data plans and the impact on subscriber adoption and usage levels. It begins by reviewing the evolution of data plans to date and highlighting the limitations of existing plans, particularly the “all you can eat” model. We then provide examples of how data plans must evolve in order to address two key objectives of operators: increasing spending from existing users and attracting new users. The report includes case studies of three operators: Orange France, NetCom Norway and Oi Brazil.
WiMAX and LTE: The Case for 4G Coexistence
Research Report published January 2010
The hype around WiMAX is dissipating, but we believe there remain decisions to be made WiMAX around the wireless standard. This report analyzes the existing WiMAX operations worldwide, evaluating operator business models, WiMAX economics, services, the value proposition and the overall market opportunity relative to HSPA and LTE. The objective is to assess which technology deliver the most profitable and popular mobile voice, broadband and video services in the context of specific market conditions: case studies examine UQ Communications (in Japan), Clearwire (the US), Mobily (Saudi Arabia), Digicel (Caribbean), Tata (India), Umniah (Jordan) and Yota (Russia).
Smartphone Forecast: Operator Strategies Will Fuel Growth in Emerging Markets
Research Report published December 2009
Emerging markets will become the leading growth engine for smartphone sales over the next five years, with China becoming the biggest smartphone market in 2010. Understanding local conditions will be vital for operators, smartphone vendors and OS developers. This report examines the state of the global smartphone market today, focusing on operator and vendor strategies. It also looks at the intense struggle for market dominance among the various software platforms. The report investigates in detail and forecasts the smartphone business in eight crucial markets: Brazil, China, India, Nigeria, Russia, Turkey, the UK and the US.
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