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Frost: Growth of Mobile Content Services to Increase ARPUs for Latin American Mobile Operators

July 29, 2008 // Published as a news service by IHS

  
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Mobile content services have been catching on fast in Latin America and were responsible for 3.1% of the total mobile telephony revenues in 2007, according to Frost & Sullivan.

In the same year, the number of mobile content users reached 57.1 million or 31.1% of the total number of mobile subscribers.

Recent analysis from Frost & Sullivan of the Latin American mobile content markets found earned revenues of $1.15 billion in 2007, with estimates to reach $8.93 billion in 2014.

While mobile music continues to be the most in demand service among end-users, games and video will gradually gain in popularity.

With mobile voice revenues per user not growing at the impressive rates seen in the last few years, Latin American mobile operators have been investing their efforts in promoting data services, analysts said.

Although mobile messaging is still the dominant component of the region's mobile data service market, mobile content services are gaining traction.

Analysts said the two largest economies of the region, Brazil and Mexico, experienced outstanding growth in 2007, achieving $1.11 billion in revenues. This represents a 48.5% growth over 2006.

"In Brazil, about 37.7% of the total 122.8 million mobile subscribers used at least one of the mobile content services in 2007," said Frost & Sullivan research analyst Justina Trotta. "Mobile music represented 38.1% of the Brazilian mobile content services market revenues, generating $250.2 million in 2007."

Analysts said notwithstanding these favorable market indications, a significant proportion of mobile subscribers are still unaware of the capabilities of their handsets. Furthermore, many users find it difficult to search for the content they want, especially on wireless application protocol (WAP) portals.

"The Latin American mobile content market is still limited by the fact that not all the mobile handsets are capable of running all mobile content services, especially games and videos," said Frost & Sullivan research analyst Andrés Sciarrotta. "The impact of this restraint is, however, expected to diminish once handsets become more affordable and accessible, enlarging the addressable market size."

Given these challenges, analysts said operators should make concerted efforts toward educating end-users of the capabilities of their handsets and making their WAP portal friendlier. This way, some non-users may begin using content services, thereby increasing penetration.

Source: Frost & Sullivan.

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