69% of LatAm Customers GSM As CDMA Champions Shift Strategy
The number of GSM customers in the CALA (Caribbean & Latin America.) region climbed to more than 200m in Q4 2006, registering an annual growth rate of 61.6% for the full year - more than double the region's overall 27.7% annual increase in customer numbers. In Q4 2006 alone, 22.39m new GSM customers were added, very nearly matching the record of 22.42m set in Q4 2005.
The record might well have been broken had it not been for a resurgence in CDMA numbers in the fourth quarter, after a marginal drop in the third, due to GSM conversions in the major markets of Argentina, Chile, Colombia, Mexico and Peru.
In the three months to 31st December, conversions to GSM slowed slightly, most notably in Peru, although the improvement at the continental level was due almost solely to the acceleration of the adoption rate in the continent's second largest CDMA market, Venezuela. The net effect was an increase of 2.2m customers in the quarter, taking the annual increase just over 10%.
GSM customers made up 69% of the total CALA base of 308.5m at the end of December 2006, up from 55% at the end of 2005 and 35% at the end of 2004. The importance of CDMA in the mix declined by one percentage point per quarter in 2006, from 25% of the total at the end of 2005 to 21% a year later. The biggest decline, however, was in the number of customers on the regions' legacy AMPS and TDMA networks, which fell from 48.5m to 27.4m during the year. At the continental net additions level, it would appear to be the demise of the original analogue networks which is feeding the GSM boom, and not a reversal of fortunes for the CDMA industry. However, as we have already seen, with 63% of the region's CDMA customers in Brazil and Venezuela alone, the underlying trends in many of the smaller markets can be masked by relatively small percentage movements in the base in these two countries.
This situation may not persist in 2007, however.
Brazilian CDMA customer numbers fell for the second month running in February, which may be the direct result of the launch of a GSM network by the country's main exponent of CDMA technology, Vivo. Meanwhile in Venezuela, the last of the group of businesses acquired by Telefonica from BellSouth has gone GSM, launching a network in the last week of January. This event was then followed by an announcement from its arch rival CANTV three weeks later that it too would be launching a network on the European standard.
In the space of three months then, CALA went from having three substantial champions of CDMA to just one - with that one also announcing its intention to defect. And whilst plans for migration may be modest, the demand of the consumer will be the telling factor, and will surely in the end be the driver of strategic planning regarding the technology duality.
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 4th April 2007
