Latin and North America - Rapid mobile growth to continue
Isabelle Paradis
April 2007
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Latin America's mobile market* has undergone significant growth in the last 5 years with a subscriber CAGR of 30.4% and a mobile penetration growing from 10.7% at the end of 2001 to 27.3% at the end of 2005. In 2005 alone, the number of Latin American mobile subscribers increased by 43.0% and is forecasted to have increased by an additional 32.6% in 2006, to reach 173 million, representing a penetration rate of 32.6%. The dynamic mobile expansion of the past 5 years has brought penetration to levels found in many developed countries; however there are still significant opportunities for growth.

Latin America's mobile operators should therefore continue to benefit from double-digit growth in customer numbers until 2009 and HOT TELECOM expects the sector to continue expanding with a forecasted CAGR of 11.1%. The number of mobile customers should consequently increase to 263 million by 2011. At that time, Latin America will have become the world's third largest mobile market behind Asia and Middle East and Africa (MEA).

Brazil is by far Latin America 's largest mobile market with 102 million customers, representing 37.5% of the region's mobile customers at the end lf 2006. It is also the world's 5th largest mobile market and generated 4.0% of the world's mobile customers at the end of 2005. Mexico follows with 55 million subscribers and 20.5% of the region's mobile market. Argentina and Colombia come in 3 rd and 4 th position with 32 and 31 million customers respectively.

The countries enjoying the most significant growth however were the smaller markets, such as Paraguay , Uruguay and Venezuela , where the number of mobile customers grew by an estimated 58.7%, 51.2% and 50.4% respectively in 2006.

Predictably, the two countries boasting the highest mobile penetration are also two of Latin America's most liberalised telecom markets: Argentina , which has a mobile penetration of 79.6%, and Chile with a penetration of 78.7%.

Mobile services provision should also be one of the driving forces behind North America 's growth in the next 4 years, with a forecasted subscriber CAGR of 6.1%.

At the end of 2005, North America 's mobile subscribers had reached 224 million, representing a growth of 14.4% over 2004. This number is forecasted to have increased by 10.4% in 2006 to reach 248 million and representing a penetration rate of 74.5%. Even though the region's mobile dispersion is well below levels found in Western Europe, where penetration stands at over 100% in many countries, North America 's mobile subscriber growth should fall below the double-digit level starting in 2007, and should reach 314 million by the end of 2010, representing a penetration of 90.9%.

Despite significant growth over the last few years, the region's mobile market has fallen to last position in terms of subscriber numbers, behind MEA and Latin America , and this should remain so for the foreseeable future, as developing countries' mobile growth rates are close to 50%. At the end of 2005, North America 's mobile sector represented 10.3% of the world's mobile subscribers and this ratio should decrease even further to 8.5% in 2010.

The United States is the world's second largest mobile market, behind China , with an estimated 229 million subscribers and a penetration of 76.5% at the end of 2006. Canada on the other hand have a much lower mobile penetration rate than its neighbour, with 56.0% of the population subscribing to mobile services, translating into 18 million customers at the end of 2006. The United States therefore generates the bulk of the region's mobile customers with 92.6% regional market share.

All in all, both Latin and North America's mobile markets should be a source of significant opportunities in the next 5 years, with growth being generated by new subscribers as well as a migration from 2G to 3G services, as 3G services are forecasted to enter the mass market stage in those two regions in the next 2-3 years.

* For the purpose of this article, the Latin America market consists of the following countries: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, Venezuela, Mexico.

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