13-08-20 pesquisa mvno cenário latam - informa - ari lopes

MVNO Latin America 2013

Sao Paulo

August 2013

GUGST

Ari Lopes

Principal Analyst, LATAM

Informa Telecoms & Media

[email protected]

04/08/2023

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Agenda

1. MVNO landscape in LATAM

2. Case study: Colombia

3. Conclusions

www.informatandm.com © 2013 Not for reproduction without permission

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MVNO Landscape in Latin America


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Colombian market


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Telecom market statistics


Tigo Claro Movistar5.06.07.08.09.010.011.012.013.014.0

0%

10%

20%

30%

40%

50%

60%

70%

12%

64%

24%

13.112.4

9.1

Market share and ARPU Q1'13 - Top 3

Market Share ARPU

80%

20%

PrepaidPostpaid

11%

66%

23%

MVNO Market Share

ETB Uff! Movil UNE

• Colombia has a penetration rate of 105%,

Claro has been the leading operator for

more than 10 years, this is reflected at its

high EBITDA margin, 42% in Q1’13.

• As most countries in LATAM, the country

shows predominance of prepaid subs (80%)

and low ARPUs (no more than USD13.1.

• MVNO market has around 535,000 subs in

Q1’13, Uff Móvil is the leader in this marketTigo Claro

EBITDA Margin 37% 42%

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Diversified MVNO landscape


MVNO Colombia

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Uff Móvil


• Of all MVNO launches tracked by Informa Telecoms & Media since the start of 2008, Uff has experienced the strongest growth in its first three quarters.

Latin America, subscriptions for selected MVNOs, 4Q10 – 4Q11

Entrepreneur

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Uff Móvil


Favourable Regulation

Network Capacity

Market Concentration

• Informa estimates that since Nov’10 Uff Móvil has

grown to 350k subs.

• Market segment: Its main target was cheap

international calls for prepaid market. The target

was relatives of Colombians living abroad; the high

prices MNOs charged for this traffic also posed as

an opportunity to have a competitive and economic

viable pricing.

• Lean organization: Uff Móvil has 12 employees,

and outsources almost all processes.

• In Aug’12 Bancolombia has acquired 70% of Uff

Móvil.

Entrepreneur

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Uff Móvil & Bancolombia

Services offered by “ahorro a la mano”:

• International money transfer

• Money transfer to other accounts

• Receive payments

• Money deposit/withdrawal (ATMs&branchs)

• Prepaid top-up

• Pay utility bills

• No monthly maintenance fee, plus a basic health

insurance if certain balance is kept

• Savings account – pay interest


• Bancolombia has two goals with this acquisition:

Innovation and Inclusion.

• 1/3 of 48M Colombians do not have access to the

banking system

• Offer more and better services to Bancolombia

customers

• ‘Plan Fácil’ – Bancolombia customers have free

internet (2GB) and 300mins (local+North America)

• ‘Ahorro a la mano’ - launched in March, 19th – an

innovative m-banking solution

• Tigo and Claro also offers “ahorro...”, but UFF Móvil

customers have more benefits, like access to contact

center

Entrepreneur/Bank

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ETB and UNE


• Fixed operators are among the most active companies launching MVNOs

worldwide, it offers a quick and relatively cheap way of adding mobility to its

portfolio at a relatively low CAPEX and without depending on spectrum

auction. Additionally, operators can use existing distribution channels.

• ETB and UNE are building its multiplay strategy.

• Main target is the existing customer base, mobile service is an add-on that

increases customer ARPU and positively impacts churn rates.

• UNE has launched its own LTE network (~52k subs), but keeps a MVNO on

Tigo 3G network.

• UNE and Tigo are merging, but in parallel UNE and ETB are bidding

together for 4G spectrum

Fixed Telephony Broadband TV

ETB 32% 14% 0%UNE 24% 28% 23%

Colombia, market share for selected services, Q4’12

Fixed operators

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Virgin and Exito


• Leading retailer in Colombia• 484 stores • 36,000 employees• USD 4.8B in revenues (2011)• MVNO launched in May, 15th • SIM cards and top-ups in Exito stores (+80 cities)

and licenced distributors, but nation wide coverage• Loyalty cards points redeemed for minutes

• International group focused on youth segment, large experience with the MVNO model, present in 10 countries, ambition is to build a regional presence in Latin America

• MVNO will introduce Virgin’s brand in Latin America

• Already has around 150,000 customers in Chile, launched in Colombia in March, Brazil is expected to be the next country

Retailers / Youth

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2.Conclusions


Conclusions

• Chile and Colombia are ahead of its neighbours• The 3 biggest countries: Brazil, Mexico and Argentina are still lagging behind

LATAM MVNO market has evolved at different speeds

…

• Uff “validated” the business model by having an aggressive growth rate crowned by its acquisition by Bancolombia

• It is likely that smaller companies will look to launch its own MVNOs

…Colombia has already proved the feasibility of

the business model…

• Market concentration and regulation alone does not explain MVNO success – Colombia and Chile have completely different market and regulatory landscape

• Vast majority of MVNOs have a lean cost structure – they outsource, they leverage existing brand, customer base and distribution channels

• Strong partnership between MVNO-MNO is key

…Lessons so far.

Thank you!

13-08-20 pesquisa mvno cenário latam - informa - ari lopes

Technology

latam mvno market

mvno market share etb

mvno latin america

latin america mvno

prepaid market

permission bancolombia

uff mvil customers

mvno model