Digicels Main Challenge in Central America - Report
Signals Telecom Consulting has released a report which analyses the strategies that Digicel has to implement in order to be successful in these Spanish speaking markets. Central America presents new challenges to Digicel as the operator's strategy in the Caribbean centered in aggressive marketing against the incumbent mobile player, which in many instances turned to be the slow-reacting Cable & Wireless.
On the other hand, El Salvador provides a different scenario as Digicel will be the smallest of four cellular/PCS operators offering mobile service in the market. In addition, El Salvador also has an iDEN operator.
Jose Otero, author of the report, affirms "Digicel had an incredible growth in the Caribbean. Nevertheless, El Salvador is a completely different market and posses new challenges to Digicel as for the first time, it will have to compete against large scale operators with years of experience offering mobile service in competitive markets and with much larger economies of scale and financial backup."
Otero adds that "in El Salvador several pan-regional mobile players already offer services: America Movil, Telefonica Moviles and Millicom. All these players have operation in several Central American countries making it easier for them to implement common strategies throughout the region. If Digicel wants to be successful in Central America it would have to implement a completely different market strategy to the one it uses in the Caribbean. Although the introduction of new services like per-second billing and a superb point of sales network allowed Digicel to become the main player in the non-hispanic Caribbean, its important to note that all the new services launched by Digicel in the Caribbean are already offer by at least one of El Salvador's mobile operators if not all. In other words, if Digicel emulates in El Salvador its Caribbean strategy it wont offer a different proposition to what's already in the market to potential subscribers and would have to resort to competing in price if the operator's main strategy is rapid subscriber growth."
Finally, Otero foresees great difficulties for the launch of a greenfield mobile operation in Guatemala "There they will have to build the network from scratch, and would face the same three pan-regional operators present in El Salvador. If Digicel start building network and subsequently launches mobile services, the operator will have to be extremely aggressive in its service offering and price making it difficult to obtain a positive ROI on the short term."
Posted to the site on 17th November 2006
