Sagem on Target for 100% LatAm Growth in 2007

French mobile handset manufacturer Sagem expects its sales in Latin America to double in 2007, continuing a trend of 100% growth registered since 2004, Sagem's Latin America operations VP and general manager Victor Díaz told BNamericas at a product launch.

Díaz expects growth to be particularly strong in markets like Chile and Venezuela, which are strategically important to Sagem. "Other markets with strong growth are Jamaica, Puerto Rico, Colombia, Peru, and we hope that with this launch we will continue with the same growth rates," he said.

Díaz also expects Sagem to become the mobile handset sales leader in Peru and Colombia.

"In Peru we hold a leading position, not all year round but for some months of the year, with Claro. In Colombia, depending on the month, we're also in a position of leadership. So there are some markets where we are fighting to be number one," Díaz said.

Sagem's main strength in the region is as an alternative to the overall market leaders, Nokia and Motorola, Díaz said.

"Operators like América Móvil and Telefónica will find it much more difficult to negotiate and run their business efficiently if they're only tied to the two big handset providers, so they want [other] companies that can serve niche markets and offer a different kind of value from the two giants," he said.

NICHE MARKETS

In this respect Sagem has phones designed specifically for executives and children, in addition to the mass-market consumer.

To take advantage of the current trend for phones that incorporate MP3 players, the company is preparing to launch its myMusicbox package in Chile, Peru, Colombia, Venezuela and the Caribbean over the next few days. The package includes the high-end my700 handset, with 1GB of memory and a bluetooth stereo headset.

In the first quarter of 2007 Sagem plans to launch the my215, which also offers multimedia services, but for the mid-range consumer, Díaz added.

The executive was particularly optimistic about Sagem's potential growth because of the region's overall movement towards GSM technology, especially Central America, which has fully converted to GSM, and Venezuela, which is migrating rapidly.

BLUETOOTH

Díaz also highlighted Sagem's emphasis on bluetooth, hinting that this is the next big trend, after camera phones.

"Studies have shown that users only use their basic camera phones for two or three weeks, because the resolution isn't very good. But we can offer cameras with 3Mb resolution. We believe that growth in bluetooth will surpass that of the camera phones and that in two to three years all phones will use bluetooth," said Díaz.

However, Díaz does not expect Sagem to encounter such growth in mobile television, because even though the company does offer such capabilities in Europe, operators in Latin America have not made the necessary infrastructure investments to launch it in the region.

Some 90% of Latin America's markets are just looking for basic phones to make calls, he said.

3G

However, Díaz did see possibilities for 3G to take off in countries where handset penetration is already high.

One such country is Argentina, where handset sales have significantly increased due to the country's economic recovery and customers are now looking at telephones with more accessories.

Díaz predicted that in Mexico, Colombia, Venezuela, Chile and Argentina, it could become profitable to offer 3G technology within the next year or two.

"In my very personal opinion, the country that could convert most quickly to 3G would be Chile, where penetration is over 70% and has been for the past couple of years," Díaz said.

"Argentina is also getting to that level, because in the last two years its market has completely exploded. So we hope that customers in Chile and Argentina with basic handsets will want to switch to phones with more accessories," Díaz said.

"All the studies I've seen have said it's [3G] going to take years, we're talking about possibly 2008," he added.

In Díaz's view, many companies currently offering only 2G services will migrate directly to 3G, completely skipping the intermediate 2.5G, or EDGE, technology.

While Sagem currently has important partnerships with independent operators such as Chile's Entel PCS, Jamaica's Digicel and Venezuela's Digitel, Díaz predicts that most future business will come from Telefónica and América Móvil, which currently control 85-90% of the regional market.

BNAmericas.com"

Posted to the site on 4th December 2006