The Mobile Industry
Between April 24 and April 26, the GSMA LA Plenary Meeting No. 39 was held in Bogota, Colombia, with more than 400 attendees from 19 countries including representatives from mobile operators, telecommunications suppliers, regulators, Colombian government officials, media and international analysts and experts.
The hottest topics related to the industry were discussed, including health and privacy issues, infrastructure deployment, quality of service, mobile youth, rich communication services, and machine-to-machine connectivity and its vital correlations with each and every industry vertical from automobile to public services.
One of the recurring messages heard during the conference was the necessity for incentives in order to make the best out of investments and to overcome the challenges that emerge while the industry develops. This highlights the impact of regulations in the advance of the industry and the need for both regulators and operators to collaborate and reach agreements, particularly in the upcoming “4G” spectrum auction.
The GSMA Latin American Plenary also served as an arena to bring together the top executives of Colombia’s operators (Claro, Movistar and Tigo) who concurred on the main challenges for industry participants nowadays. One of the most important ones being the necessity to deploy networks more quickly in order to provide the whole population with mobile services and work together with the government in order to achieve ROI.
As operators expand their GSM and 3G coverage to distant geographical areas and increase investments to improve quality of services with competitive prices, new consumers will adopt mobile services and spur the fixed-mobile migration. Due to the economic recovery and forecasted growth, the population in Colombia is gaining access to services that were previously unaffordable, including mobile telephony.
Frost & Sullivan expects the Colombian mobile services market to grow at an 8.5% compound annual growth rate in a number of lines and 8% in revenue until 2017. Although the prepaid market is likely to remain the most important in terms of the number of lines, the postpaid market is expected to grow more as the competition among mobile operators fosters plan prices, and tariff reductions for postpaid plans. The market is expected to grow as it is stimulated by the country’s economic development and the increasing penetration of smartphones and mobile broadband, which, in turn, will leverage the demand for mobile data and content services.
Third-generation services and particularly mobile broadband will witness remarkable growth in the Colombian mobile services market; LTE’s first commercial launches further boost the penetration of mobile broadband and increase the usage of mobile applications such as M2M. In fact, M2M is one of the main drivers of mobile Internet connectivity. In a short period of time, the number of machines connected to the Internet is expected to surpass the number of people who are connected. Smart grids and smart meters can also contribute to leverage mobile connectivity in distant regions. Telemetry will also be important, as well as m-health, m-education and m-banking initiatives expected for the coming years in Colombia.
Lastly, the telecommunications market consolidation will drive a new competitive scenario in which mobile services will be key part of a bundling strategy by combining fixed-mobile telephony, broadband and pay-TV. The main telecom groups are already integrating their networks in order to create synergies, develop new services and unique plans and increment revenue. This includes the merger of America Movil’s companies Comcel and Telemex that now operate as a single brand Claro; The merger of Colombia Telecomunicaciones and Telefonica Movil under the brand Movistar; and the expected merger between UNE and Millicom, very recently approved by the city’s council.
Mobile operators participating in the governments’ Vive Digital Broadband Plan, which provides popular mobile broadband access, enables revenue growth for them and largely adds to the development of the country. Therefore the role of the mobile industry is crucial. As Diego Molano Vega, the Colombian Minister of Information and Communications Technology said during his presentation in the GSMA LA Plenary, “Internet access is closely related to reducing poverty and the mobile industry plays a fundamental role in developing our economies and reducing poverty.”
Gina Sanchez is ICT Industry Analyst at Frost & Sullivan
Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
