Price War Fueling Guatemala's Mobile Growth Rate

The main motor of growth behind Guatemala's 59% increase of mobile subscribers in 2006 were handset subsidies and the price war between mobile operators Comcel and Claro, Elías Vicente, analyst with consultancy Signals Telecoms Consulting, told BNamericas.

Guatemala's telecoms regulator SIT said in a recent statement that the number of mobile lines increased 59.2% in 2006 to end the year at 7.18mn compared to 4.51mn at end-2005.

According to the analyst, Claro, of Mexico's América Móvil, and Comcel, of Luxembourg's Millicom International Cellular and operating under the brand name Tigo, have been aggressively targeting the prepaid market, mostly the lower income segments.

The two companies have also both switched to per second billing, which has furthered encouraged mobile phone usage, Vicente said in an emailed response to questions.

In 2006 there was little difference between the operators as regards the actual services they offered. However, Tigo is currently targeting the high growth youth market, while Claro has launched promotions in conjunction with the country's incumbent Telgua, also owned by AMX.

Leading the sector was Claro Guatemala, with a 41% market share, Tigo had a 32% market share and Movistar Guatemala, of Spain's Telefónica, had 27%.

Looking forward, the market should continue to grow at similar rates in 2007 mainly driven by continued rates wars, per second billing and the possible entry of Caribbean mobile operator Digicel.

Digicel acquired a mobile concession in October 2006 through the purchase of an unrelated company with the same name in El Salvador, which had a license for both countries.

For advanced 3G data services, Vicente said that although Millicom has said it is planning to deploy UMTS services in Central America, it would not likely happen until sometime during 2008.

Posted to the site on 13th August 2007