What is really driving mobile revenue growth in Latin America?
Our latest release of Mobile Subscriber Usage and Traffic Market Data and Mobile Carrier and Revenue Market Data has shown that Latin America out grew other regions in terms of mobile revenues. This leads us to this question: what is causing all these increases?
One of the main factors was the migration from CDMA/TDMA to GSM/WCDMA networks. This brought about cheaper handsets and services which greatly boosted the 2G and 3G adoption rate as well as led to a strong year on year MOU growth of 14.4%. Putting these factors together, the operators benefitted from growth in ARPU . Other regions experienced ARPU decline or only meager gains.
Another factor that led to this growth was the increasing affluence in Latin America, achieving a GDP CAGR of 4% from 2006-2010. With higher disposable income, consumer are becoming more willing to spend on better mobile devices and value added services pushing ARPU and subscription rates higher.
The final factor would be due to the massive smart phone subsidies by operators in the region to accelerate the uptake of mobile internet services, a new engine of growth for many telecommunication operators in the world. One of such operator is America Movil who employed this tactic in the Mexico and Brazil markets.