Qualcomm and Teleepoch
Enter Into a 3G CDMA Subscriber Unit License Agreement, October
6, 2007
MTN chooses Cambridge Broadband
Networks for multi-service wireless network in Rwanda, October 6,
2007
Brazilian government to
publish 3G bidding rules soon, October 6, 2007
KTF 3G service suffers
from technical problems, October 6, 2007
Argentina’s Personal
lunches 3G service in Rosario, October 6, 2007
Russia has it's first 3G
network, October 6, 2007
AT&T could drop Alcatel-Lucent
as 3G mobile network supplier, October 6, 2007
Enea Extends License Agreement
with ZTE for 3G Handsets, October 2, 2007
LG to unveil premium handsets
in Brazil, October 2, 2007
KTF 3G subscribers doubled
in less than 3 months, October 2, 2007
3G policy in India will
be non-uniform, October 2, 2007
- previous news
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Chilean Mobile Market Forecast Shows US$1.3 Billion Market by 2007
December 7, 2003
According to the Yankee Group Chilean Mobile Market Forecast, by 2007,
mobile users will generate US$1.3 billion revenue for Chile’s mobile operators,
a compounded annual growth rate (CAGR) of 2.3 percent. Chile’s mobile
user penetration (41 percent) is higher than the 19 percent average penetration
of Latin America and one of the highest penetration rates in the region.
The limited buying power of the remaining population will be the major
barrier to further increases in the number of mobile users; by the end
of this year virtually everyone who can afford mobile service will have
it.
Chile’s Mobile User Forecast, 2003-2007
Source: The Yankee Group, 2003
Limited future growth rates will force operators to change their market
strategies from acquisition to retention and stealing share from competitors.
An effective retention strategy will improve relationships with current
customers and minimize churn. Share stealing will require using brand
and customer service to attract a competitor’s customers. Instead of looking
for new mobile users that provide low revenue, carriers should focus on
existing mobile users.
To do this, operators have to decrease cost per-user as much as possible
and increase their service portfolios. The result will be an increase
in the gross addition cost, as operators increase retention marketing
expenses, advertising and branding.
Vendor Recommendations
-- Application and content providers should add value and be flexible.
Chilean operators are looking for new sources of revenue (such as messaging
and data services) to compensate the voice revenue competition. However,
operators can’t do it all. Application and content providers should convince
operators to participate in the risk and rewards of new services, using
a revenue-sharing business model. Application providers should also start
offering regional solutions to Chilean operators that also have operations
in other Spanish speaking countries. Those operators include Entel (TIM),
Telefonica Moviles, BellSouth Chile and Nextel.
-- Network vendors should help operators offer enterprise services. Operators
created corporate plans based on voice rate discounts to improve their
relationships with Chilean enterprises. The next step will be the increasing
the sophistication of data services to improve enterprises’ productivity.
Network vendors should use their expertise to go directly to enterprises
or help carriers approach corporations.
-- For handset manufacturers, the increase in churn will be an opportunity
to sell more handsets. To attract a competitor’s customers and create
a long-term relationship, operators might want to offer new handsets.
New data services generally require next-generation handsets. Unless handset
manufacturers stay close to operators, the market for used handsets might
grow. From the operators’ point of view, activating a new user with an
existing handset is very attractive because those handsets don’t carry
a subsidy. Handset manufactures should negotiate deals involving countries
other than Chile (such as Brazil, Argentina, Paraguay and Uruguay) when
dealing with the considerable bargaining power of the operators.
Carrier Recommendations
-- BellSouth and Smartcom PCS should look for operating synergies. With
a minority market share, CDMA-based operators should look for ways to
cut operating costs. Although full network sharing is difficult, operators
can take advantage of coincident or complementary coverage to share sites
and civil infrastructure costs.
-- BellSouth should look at Smartcom as a potential merger or acquisition
target. Smartcom will find it hard to get any larger or more profitable.
Telecom is not a core business for its major shareholder, so it may listen
to interesting offers.
-- Look at applications already available in Spain and other Spanish
speaking countries. Although the majority of Chilean content is local
(such as traffic, news and weather), operators can easily replicate applications—especially
if the application is in the right language.
-- Reinforce the portfolio of corporate services. There is a big overlap
between early adopters and high-end corporate users. The largest bills
come from customers that use their mobile phones for business. Creating
loyalty in this segment demands continual new products and services.
-- Don’t ignore mid-level and low-end prepaid users. Although ARPUs are
normally low in these segments, they can help operators increase market
share and gain scale.
Forecast Methodology
The mobile user forecast model considers Chile’s income disparity and
varying age distribution. We begin by limiting the addressable market
of potential users of mobile services by age, excluding those younger
than 14 and older than 65. We use a socioeconomic stratum filter that
considers the average expenditure on communications services and the minimum
and maximum each household can afford. By analyzing the purchasing power
of each stratum and its average communications expenditure, we were able
to establish distinct spending parameters for each consumer class. By
cross-referencing these spending parameters with current and future spending
minimums for mobile services in the target country, we quantified the
addressable market for each country. To estimate the growth of the actual
market, we applied the Bass New Product Diffusion Model adjusted to Chile’s
historical mobile user growth. The result of these calculations is the
total number of users.
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3G Motorola A920
