Top 10 LatAm Operators in Q3 2006
Two multinational groups dominate the Caribbean and Latin America region, América Móvil, the Mexican company controlled by Carlos Slim and Telefónica, the fourth largest operator in the world. Until very recently, the two were growing at approximately the same rate, but in the last couple of quarters, América Móvil has pulled away from Telefónica, thanks in large part to the slowing of growth in the latter's Brazilian associate, Vivo Participacoes.
América Móvil owns four of the ten largest operators in the region and Telefónica three, while Telecom Italia controls one and has a significant investment in another. The tenth is independent.
During the June quarter, América Móvil became the fifth company in the world to pass the 100m customer mark and it has continued this progress in the September period. Overall, its total customer base rose by nearly 6% to 106.7m. It owns the largest mobile business in the region - Telcel in Mexico - and also the fourth, fifth and eighth largest. In aggregate, these four account for 31.4% of all mobile customers in the region, this share rising to 37% if all of its subsidiaries are included.
Telcel is a phenomenon - it has a larger share of its home market than any other company operating in a competitive environment (76.9% at the end of the quarter) and is still adding customers at a rate of more than 500k per month. It closed the period with just over 40.7m customers, up from 33.6m one year earlier. However, the last three quarters have seen declining proportionate growth rates - the last quarter's 4% was a small reduction on the prior quarter's 4.2%, which in turn was down from Q1's 4.6% - but a glance at the longer term trend below shows that this could be explained by seasonality rather than being an indication that the market as a whole is slowing as it approached 50% penetration.
That said, Telcel is not quite so dominant within the context of América Móvil as once it was. It now accounts for just over 38% of the group's customers, as against more than 40% in March, while its share of the region's total subscribers has dropped over the same period from 14.6% to 14.1%. This however, compares more than favourably with the experience of Vivo in Brazil, the region's second largest operator.
The well-publicised decision to move towards GSM, from CDMA, has taken a lot of the wind out of Vivo's sales (if you will pardon this rather appalling pun) and its share of the total market is down from 11.7% in March to below 10% in September. This, as we noted above, is the main reason behind Telefónica's loss of market share in the region. In absolute terms, Vivo now has 28.7m customers, up from 28.5m three months earlier, but down on the same quarter of the prior year (28.8m) and well down on its peak of 30.1m at the end of March.
TIM Brasil remains in third place within the region, with 24.1m customers and an improved market share - up from 8.18% of the total in June to 8.36% in September. The gap between TIM and Vivo continues to narrow, both relatively and absolutely, and is now down below 5m for the first time since the first quarter of the century, when the total subscriber base in Brazil was just 14m.
In prior issues of The Mobile World Briefing, we commented upon suggestions that this business was up for sale, as a part of Telecom Italia's de-gearing. It is obviously a very attractive property, but it seems that TI may have decided not to part with it just yet. América Móvil's Brazilian subsidiary, Telecom Americas, is the fourth largest operator in the region, as it was one year ago. It closed the quarter with 22.2m customers, up from 17.4m one year earlier. This company has also gained market share from Vivo, though rather less markedly than TIM, and it currently lags its Italian rival by nearly two million customers - the largest gap between the two to date.
In fact, there have been no changes in the positions amongst any of the current top seven over the last year, Telecom Americas being followed by its sister company, Comcel in Colombia, which is closing in on the 20m customer mark, having added the best part of 0.8m new connections in the quarter, to leave it with a total of 18.8m. A fourth Brazilian company - TNL PCS - is sixth, with 12.6m customers. Telefónica's second entry - Telefónica Comunicaciones Personales - is seventh with just under 10m mobile customers. This is the market leader in Argentina, but has seen its lead slowly eroded by eighth placed CTI, an América Móvil subsidiary, which now has just over 9.0m subscribers. The same process appears to be occurring in Colombia too - despite the fact that América Móvil is the market leader with nearly two thirds of the market and Telefónica Moviles, a distant number two, with little more than one quarter. TM Colombia closed the quarter with 7.7m connections, marginally up for the 7.5m it had in June. The final place in the table is taken by a third Argentinean business, Telecom Personal, the subsidiary of Telecom Argentina, an associate of Telecom Italia.
Telefónica's other main businesses in the region include TM Mexico, which has dropped from eighth place last year to eleventh this (despite annual growth of 25% to 7.4m) Telefónica Movil Chile, which is 14th, with 5.6m customers and Telefónica Peru, 18th, with 4.4m customers. The only other América Móvil business in the top twenty is Consorcio Ecuatoriano de Telecomunicaciones in Ecuador. For a full list, please see the accompanying piece on the region's multinational operators.
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World. To download a sample issue of the Briefing in PDF format, please click here. For more information including full subscription pricing, please visit The Mobile World"
Posted to the site on 18th January 2007