This won’t be the year that near field communication (NFC) takes off in Latin America, since short message service (SMS) solutions are likely to see increased adoption. Although Frost & Sullivan chose mobile payments as one of the region’s telecom trends for 2013, Renato Pasquini, team leader for telecommunications, said in a webinar this week that low penetration of high-end devices limits the potential for NFC at the moment, although some Point of Sale (PoS) terminals are already compatible. However, he said, NFC trials are expected in 2013, such as during the FIFA Confederations Cup in Brazil.
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Last year, during the GSMA’s Mobile NFC event in January in São Paulo, Mustafa Almansur, NFC program leader for the Brazilian market at GSMA, said NFC was on its way to being launched in Brazil, the largest country in Latin America, and could become a reality by the end of 2012. In the same line, some carriers and other telecom players said that they expected some NFC applications to launch in 2012.
However, just a few trials and isolated initiatives are in the market today. Claro Brazil in partnership with Bradesco, one of the largest banks in Latin America, have stated plans to launch a mobile payment service based on an NFC solution by the second half of 2013. Without disclosing further details, they noted the focus will be on clients with greater purchasing power—those who are able to purchase an NFC-enabled smartphone.
Juniper Research estimates that the NFC retail payment market is expected to exceed $180 billion globally by 2017, more than a seven-fold increase over 2012, boosted by North America, Western Europe, the Far East and China.
2013 trends
According to Frost & Sullivan, 2013 will be the year of new business models; TV/Internet convergence; small cells and heterogeneous networks; ultra-broadband; machine-to-machine and advanced value added services (VAS).
During the Frost & Sullivan webinar, Pasquini said that companies are searching for new business models aimed at launching affordable services for the middle class and designing M2M services that focus on both consumers and enterprises.
“Regulation and legislation will be key to fostering M2M adoption. However, the M2M ecosystem will become increasingly more complex, and the success of M2M will depend on the ability to establish good business models and partner with the right stakeholders,” he said.
Commenting on the small cell and heterogeneous network trend, the Frost & Sullivan analyst said that micro cells and Wi-Fi are at the top of telecom operators’ lists since operators are developing relevant Wi-Fi infrastructures, both indoors and outdoors, aimed at bundling Wi-Fi with fixed and mobile service plans, and automatic authentication via SIM card or mobile app 3G/4G.
Pasquini also commented on LTE deployment in Brazil. From his perspective, initially the new services will be focused on mobile broadband and high-end subscribers. “It will be the year to experiment with services, network deployments, trials and quality service assurance measures. From 2014 on, I expect a higher demand and penetration,” he said.
The migration from 2G to 3G is also accelerating throughout Latin America. Frost & Sullivan forecasts that by 2017, LTE will represent 6% of total lines, while 66.2% will be 3G, and 27.8% of all lines will be 2G.
As for the convergence of TV and Internet, Pasquini said there will be a move from linear programing to on-demand content and interactive applications, such as social TV, second screen, TV everywhere, niche video on-demand subscriptions, cloud services and catch-up TV. “Leading pay-TV service providers, backed by broadband offers, will expand advanced cable TV and IPTV services with innovative services and applications for clients.”
