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Mexico Q2 2008 - Telcel maintains unparalleled dominance

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Mexico has the second largest customer base in South America behind Brazil with 73.45m customers at the end of Q2 08. This is approximately the same size as the UK customer base, although the population of Mexico is almost twice that of the UK, with a figure of just under 110m. This yields a penetration figure of 66.8% at the end of the quarter, up from 57.1% a year earlier. Penetration has been increasing at a steady rate, and if there is no significant slowdown then the 75% mark should be reached during Q2 09.

Mexico is America Movil's home market and its Telcel brand is utterly dominant, with 72.0% market share at the end of Q2 08. This level of market share is unparalleled in any other major multi-player market; even Telecommunications Company of Iran, which held an effective monopoly until two years ago, had a lower market share at the end of the quarter. In real terms it finished Q2 with 52.85m customers, compared to 14.11m for Telefonica's Movistar, 4.05m for Iusacell and 2.44m for Nextel.

Unsurprisingly, Telcel was also completely dominant in terms of the figures for net additions. It added a total of 6.74m in the twelve months ending 30th June 2008, more than the other three operators combined: Movistar gained 3.88m, Iusacell 0.13m and Nextel 0.59m. The proportionate figures yield a different picture, however. On this basis, Movistar led the market with a 38.0% uplift, compared to 31.8% for Nextel and just 3.3% for Iusacell, which has performed poorly since its merger with Unefon.

However, Iusacell does have the highest quality customer base of the three major operators, with 26.6% of its total number on contracts at the end of Q2 08, compared to 7.2% for Telcel and 5.8% for Movistar. Iusacell does not release ARPU figures though, so we are unable to judge whether or not its superior customer quality translates into higher average revenue. Nextel has by far the highest ARPU of the companies which do report, with a Q2 08 average of USD 69 per month - approximately MXN 711. This compares to MXN 178 for Telcel and around MXN 134 for Movistar.

Quarterly Net Additions by Operator, Q1 07 – Q2 08

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Tags: arpu  telefonica  movistar  telcel  iusacell  nextel  Mexico