WASHINGTON-Prepaid cellular plans, increased licensing and expanded competition throughout the region will drive future wireless growth in Latin America, according to a report by the Strategis Group.
“Latin America Cellular/PCS Markets,” showed the region recorded a 47-percent penetration growth rate in 1999 compared with 1998, reaching more than 7-percent penetration. The report expects penetration figures to approach 25 percent by 2007.
While most countries in Latin America have at least two wireless operators, the report noted that those with at least three wireless providers are experiencing the biggest reduction in consumer cost.
“Duopolies do not really have an impact on prices in the markets,” explained Stuart Adler, senior analyst with the Strategis Group. “It is not until a third provider enters the market that the prices drop at the consumer level. Full competition results in huge price drops.”
The report also showed that while contract service plans will rise in most Latin American markets, prepaid plans will be the driving force behind increased use
Adler said most operators found that consumers who canceled service did so because of the upfront cost of contracts, but still kept their wireless devices. When operators began offering prepaid service, the subscriber base began to grow. “As high-end cellular/PCS|users increase in Latin America, operators look toward prepaid plans to expand their subscriber rolls.”
The report showed that of the 99.3 million net additions expected between 2000 and 2007, 73 percent will be from prepaid programs.
