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Fixed to Mobile Substitution in Latin America
Pyramid Research, Inc, Jan 2003, Pages: 35
Fixed-Line Voice Traffic Offers a $38 Billion Opportunity
Fostering the migration of voice minutes from fixed to mobile networks represents an important opportunity for mobile operators as they seek to address declining MOU and ARPU and more moderate subscriber (and revenue) growth. we estimate that if mobile operators captured 10% of fixed-line voice traffic each year between 2003 and 2008, this could cumulatively be worth an additional $35 billion in revenues.
Economics will continue to serve as both a key driver and an inhibitor for all types of substitution. Mobile operators that offer more flexible tariff plans and are willing to adjust their tariffs to slowly bring the effective per minute cost of a call closer to the lower fixed-line rates will lead the charge for usage substitution. Similarly, as handset costs continueto decline, connectivity will be more affordable to new users, thus helping to further stimulate fixed-line displacement.
While we expect that mobile’s share of wallet for per capita telecommunications spending will continue to grow at the expense of fixed voice, the amount of spending will certainly be impacted by broader economic conditions.
Case Studies
-Digicel
-Grameen Phone
-Kiwi PCS
-Nicaragua
-Vésper
-Hutchison Argentina
Who This Report is For:
-Mobile Operators looking for specific recommendations on how to target new sources of revenue.
-Fixed Operators looking for specific recommendations on how to retain revenues.
-Vendors who want to know what some operators have begun to do to encourage substitution.
-Investment Banks who want to know where the different types of substitution will take hold and how much is at stake for wireline and wireless carriers.
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