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Mexico - 75 million Mark Passed, 75% Penetration Beckons

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The Mexican mobile market surpassed the 75m mark during Q3 08 to finish the quarter with just under 75.7m customers. In proportionate terms, annual growth continued the decline that began in Q3 07, although the rate of 17.2% was still a reasonably strong figure. At the end of the quarter penetration stood at 68.6%, up 9.4pp annually, and it thus seems a near certainty that the 75% mark will be reached during 2009.

Mexico is the home of America Movil, and its network - Telcel - is utterly dominant here. At the end of Q3, it had 54.38m customers, equivalent to 71.8% of the total market. Although its market share was down 1.8pp year- on-year, its lead in real terms over nearest rival Movistar increased from 36.4m to 39.7m. In fact, both companies have been remarkably consistent in terms of actual growth: Telcel added 6.87m customers year on year, compared to 6.80m for the prior twelve months; while Movistar added 3.59m, down only slightly from the year-earlier figure of 3.63m. Movistar (a subsidiary of Telefonica) ended the quarter with 14.66m customers and market share of 19.4%, up 2.3pp annually.

In quarterly terms, Telcel was up 1.53m while Movistar gained 0.55m, compared to year-earlier figures of 1.40m and 0.84m respectively. Third- placed CDMA player Iusacell added just 21k, and it gained just 71k annually. Proportionate annual growth stood at a disappointing 1.8%. However, Iusacell has managed to improve its customer quality since its merger with Unefon, with 27.7% of its customers on contracts at the end of the quarter, up from 25.6% a year earlier; this is by far the highest figure in the market, with Telcel recording 7.2% contract and Movistar 6.0%. The fourth operator, Nextel, does not give a prepaid/ contract split, but its total customer base grew 30.0% to 2.58m and its market share was up 0.3pp to 3.4%.

Nextel also has by far the highest ARPU in the market with a quarterly average of US$68 per month in Q3 08. Although direct comparison is difficult as Telcel reports in Mexican pesos and Movistar in Euros, Telcel's ARPU was roughly US$16 in Q3 while Movistar's was around US$12. Iusacell does not report a figure, which may well mean it has nothing to shout about.

Mexico: Customers, Iusacell vs. Nextel

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Tags: arpu  cdma  telefonica  movistar  telcel  iusacell  Mexico