With a population hungry for services, Latin America is challenging telecom and Internet companies to tap their imaginative resources to provide the devices, killer applications, high-speed networks and customized content, which will be the pathway to a robust wireless Internet industry there in the next decade.
So predicts The Strategis Group in a recent study in which it anticipates a leap in the number of Latin American users from 1.4 million to 47 million by 2007.
Carlos Guzman, who conducted the study, says the availability of devices, personalized content and billing in a third-generation environment will provide the time-sensitive information users desire and will serve as foils against the low speeds and limited applications offered by second-generation networks.
The study says progress will begin with Internet-enabling devices.
“Operators must provide a wide array of handsets to satisfy all market needs for wireless data, from basic affordable handsets to advanced, more expensive handsets with all the bells and whistles,” Guzman said.
He identified the shortage of chips for TDMA handsets as one of the major obstacles and said that companies are working toward providing them.
The study, which covers such major countries as Brazil, Argentina, Mexico, Venezuela, Colombia and Chile, shows that Brazil leads the pack in wireless Internet end users in 2000 with 68 percent and Mexico holds a distant second with 11 percent. Argentina is third with 10 percent, Chile is fourth with 2 percent and Colombia brings up the rear with 1 percent.
However, new initiatives and device availability may tweak the numbers by 2007, in which the study expects Mexico to grab 35 percent of the market, paring down Brazil’s share to 41. Argentina is expected to gobble up 8 percent, Venezuela 5 percent and Colombia 4 percent.
The study shows that while second generation technology dominates the market today, it will gradually give way to 2.5 generation between 2004 and 2006, and third-generation technology will serve about half the number of end users by 2007.
Telesp Celular and Telefonica Celular dominate the Brazilian market with a PCS auction due in January. Telcel, Pegaso and Iusacell bestride the Mexican space while Venezuela deals with Movilnet and Telcel.
Companies are developing strategies to exploit the potential of the market. Some operators are developing their portals while others are outsourcing.
Since WAP services are expected to migrate to 3G, companies are now adopting horizontal portals with WAP content like Starmedia, UOL and Terra networks. In view of the increasing importance of billing, several revenue models are emerging with charges based on minutes of use, a flat fee or prepaid WAP services.
