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LatAm: AT&T looks to dominate mobile in Mexico

AT&T aims for top spot in Mexico’s telecom market

AT&T is preparing to become the leader in the Mexican telecom market over the next 10 years. Citing AT&T Mexico CMO Víctor Tiburcio, local paper Dinero reported AT&T plans to take the top spot from América Móvil. AT&T earlier this year bought both Nextel Mexico and Iusacell and has released a marketing campaign tagged, “When we come together, good things happen,” along with, “Iusacell and Nextel, together we are AT&T.”

In addition, Bloomberg reported that Telefónica would be willing to make agreements with rivals, including AT&T, in order to grow in Latin America. Currently, the Spanish group is No.2 in the region behind Carlos Slim’s América Móvil operations.

M-payment moment
The Latin American region has attracted mobile payment projects due to the vast population still underserved by formal financial services, high penetration rates of mobile subscriptions and an increasing m-commerce market. According to a recent report by Pyramid Research, this combination has been attracting financial institutions, handset manufacturers, online companies and mobile operators to participate in the m-payment value chain in Latin America. Pyramid stated that mobile operators are key to fostering financial inclusion in countries with underdeveloped financial systems.

The consulting firm released a report analyzing the market pointing out that Latin America can be divided into three groups: countries with a developed financial system and mobile telecom services market; countries with an emerging financial system and a developed mobile telecom services market; and countries with an underdeveloped financial system and developed mobile telecom services market. To better understand exactly what’s moving forward in this market, RCR Wireless News interviewed Marcelo Kawanami of Pyramid Research.

RCR Wireless News: How do the high mobile subscription rates contribute to make m-payments more attractive in the region?
Marcelo Kawanami: The mobile subscription rate is one of the key components to drive m-payment in the region once it serves as the basic platform to run the solutions. Nevertheless, as we observed, the mobile subscription rate cannot be assessed alone in order to identify the most appropriate business model for m-payment implementations. Other attributes such as the unbanked rate, the development of the banking system and the regulatory framework of a country are also key factors that has direct impact over the m-payment market in the region.

RCRWN: When discussing m-payments, the question that remains open is who will lead the process: telcos, financial institution or other players?
Kawanami: As we observed, this will vary from country to country. In countries with a high rate of people underserved by banking services we are observing that mobile operators play a key role to foster financial inclusion. In other countries with a more developed financial system, mobile operators are facing some difficulties to implement m-money solutions, for instance, and in some others, mobile operators are partnering with financial institutions to develop m-payment solutions. This scenario showcases that we will not have one stakeholder leading the process.

RCRWN: How is the regulation advancing to drive more adoptions of m-payments in Latin America? Is legislation still a problem?
Kawanami: Regulation is key within the m-payments markets. It can work as a driver or a challenge. From my perspective, in general, the regulatory framework in Latin America cannot be perceived as a “problem” anymore. In countries such as Paraguay, the government has worked with development organizations such as the Inter-American Development Bank, to identify alternatives to foster the financial inclusion in the country and m-payment solutions such as m-money appeared as a key pillar due to the high penetration rate of mobile subscribers. In Brazil, the country has made advancements in terms of m-payments’ regulation through a publication released by the Central Bank in 2014 where it describes a standardized legislation that has broadened the definition regarding payment institutions, allowing national and international m-payment players to enter the market.

RCRWN: The report divides Latin America into three groups. In which one do you think there’s more opportunities in m-payment and why?
Kawanami: As identified in the report, each group has a different business model. It is hard to say which one has more opportunities for m-payment solutions. I believe that each group has more opportunities for a determined stakeholder. While some countries (Brazil and Chile) are prepared for emerging mobile payment solutions from device makers and online companies, others (Paraguay and Bolivia) rely on mobile operators to drive financial inclusion.

More Latin American news:
Brazil – While gathered at the 59º Painel Telebrasil event held this week in Brazil’s capital Brasilia, telecom operators asked the government for tax relief and a revision of the regulatory environment for telecommunication in order to expand their services throughout Brazil.

Wondering what’s going on in Latin America? Why don’t you follow me on Twitter? Also check out all of RCR Wireless News’ Latin American content.

ABOUT AUTHOR

Roberta Prescott
Roberta Prescott
Editor, [email protected] Roberta Prescott is responsible for Latin America reporting news and analysis, interviewing key stakeholders. Roberta has worked as an IT and telecommunication journalist since March 2005, when she started as a reporter with InformationWeek Brasil magazine and its website IT Web. In July 2006, Prescott was promoted to be the editor-in-chief, and, beyond the magazine and website, was in charge for all ICT products, such as IT events and CIO awards. In mid-2010, she was promoted to the position of executive editor, with responsibility for all the editorial products and content of IT Mídia. Prescott has worked as a journalist since 1998 and has three journalism prizes. In 2009, she won, along with InformationWeek Brasil team, the press prize 11th Prêmio Imprensa Embratel. In 2008, she won the 7th Unisys Journalism Prize and in 2006 was the editor-in-chief when InformationWeek Brasil won the 20th media award Prêmio Veículos de Comunicação. She graduated in Journalism by the Pontifícia Universidade Católica de Campinas, has done specialization in journalism at the Universidad de Navarra (Spain, 2003) and Master in Journalism at IICS – Universidad de Navarra (Brazil, 2010) and MBA – Executive Education at the Getulio Vargas Foundation.