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TITULO: Market structure and penetration in the Latin American mobile sector

AÑO: 2007
ETIQUETAS: market structure, market penetration, mobile telephony, pro-poor accessibility

As in other regions of the world, the use of mobile telephony in Latin America increased dramatically during the last decade surpassing all expectations for the industry. Mobile telephony was initiated as a premium service used mostly by professionals and during the mid-1990s it became a device used by very low income groups. In Latin America, mobile telephony provides the only source of access to some of the poorest segments of the population and it has become the central mode of communications. Mobile networks will provide coverage to 90% of the world's population by 2010, compared with 80% in 2005. In the region, despite several economic slumps, the number of mobile subscribers increased from 4 million in 1995 to close to 300 million in 2005. The pro-poor accessibility of mobile services makes this industry’s expansion an interesting area of study as a possible channel towards development.

This study is intended to evolve as a foundational piece of background research which will inform the Regional Dialogue on the Information Society (DIRSI) larger project on the mobile sector in Latin America. The objective in this paper is twofold. On the one hand, it seeks to analyse the process of consolidation that the region experiences today in the mobile market and on the other, identify the impact this market concentration has had on mobile penetration. The ultimate objective behind this analysis is to understand how the trend in market structure may impact the use of mobiles by low income sectors of the population in Latin America.

The findings in this paper are mixed. They do not identify a clear association between market concentration and mobile penetration. It suggests firms in the mobile market are competing for a regional position and not colluding; for example, the ARPUS in the mobile industry are decreasing. In accordance to results in other studies it finds that the most significant variables that have had an impact on mobile penetration are pricing strategies.