Research and Markets: Examine the Strategic Challenges and Choices Involved In Expanding Target Markets through Bundling For NET Serviços in Brazil and Claro in Central America

DUBLIN--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/research/6d4bf4/latin_america_tele) has
announced the addition of the "Latin America Telecom Insider / Vol. 1, No 4,
Edition 6 - Multiplay Services in Latin America: Operators Target the Mass
Market" report to their offering.

As operators continue to exhaust the high-income consumer segments in Latin
America, the bundling strategies with the best chance of success involve
broadened offerings that will attract lower-income households to broadband and
pay-TV, according to this latest report.

Multiplay Services in Latin America: Operators Target the Mass Market examines
the multiplay strategies of several leading operators in Latin America and the
rationale for engaging customers outside the higher-income population segments.
This 12-page report compares the cost of multiplay services across several
markets to demonstrate that there is potential for costs to come down in Latin
America, which would boost penetration. Case studies of two integrated operators
- NET Serviços in Brazil and Claro in Central America - examine the strategic
challenges and choices involved in expanding target markets through bundling.

In Latin America, bundling has gained traction in the last three years as fixed
operators expanded into the pay-TV market and cable operators pushed further
into traditional telco territory. So far, bundling has attracted mostly people
in high-end socioeconomic groups who can afford these services; however, the
value proposition of operators is being challenge, notes Jose Magana, analysts
at Pyramid Research and author of the report.

"Given that Latin America's GDP per capita was $7,856 in 2008, operators must
face the fact that to keep penetration of fixed services growing and meet
revenue expectations, they will soon exhaust the high-income consumer segments
in Latin America," says Magana. "Therefore they must start developing strategies
to attract lower-income households to broadband and pay-TV by offering an
assortment of bundles," he adds.

Although selling to lower-income consumers is a challenge, they also represent
an opportunity to reap considerable benefits because of the significant size of
the populations. "The challenge is to find the right mix of prices, and
differentiation, such as higher broadband connection speeds, pay-per-view
content, and specific pay-TV packages, will be crucial to increasing uptake of
packages and helping to contain the decline of ARPS," he explains. "The
addressable opportunity for operators is to gain access to the 70 percent of
households that remain underserved in Latin America - if operators can access at
least half of those households, they will easily be doubling their service base
in terms of customer relationships," Magana says.

Multiplay Services in Latin America: Operators Target the Mass Market is part of
our Latin America Telecom Insider report series. Telecom Insiders are packed
with trend analysis, industry best practices, market sizing and forecasting,
competitor analysis, and case studies, providing you information you can
leverage to make better business decisions.

Key findings

* Latin America suffers from high income inequality, and most of the population
is in the lowest socioeconomic groups. As penetration grows, fixed operators
will face the challenge of producing services suitable for these segments in
order to keep expanding.
* Multiplay services are currently too expensive to sell to low-income
households. Compared with GDP per capita levels, the average Latin American
multiplay package is about twice as expensive as the average packages in the US,
South Korea or Spain.
* Multiplay ARPS numbers in Latin America have started to decline thanks to
intensifying competition and greater uptake among lower-income consumers.
Operators will be better able to protect their ARPS if they offer entry-level
packages that let users add extras such as faster network access or special TV
packages according to their own preferences or incomes.

In Latin America, bundling has gained traction over the past three years as
fixed operators expanded into the pay-TV market and cable operators pushed
further into traditional telco territory (fixed voice and broadband). Pay-TV is
becoming a new growth engine for fixed telecom operators, which have seen
traditional voice revenue decline as a result of fixed-to-mobile substitution.
Increasing PC penetration, meanwhile, is helping broadband gain wider adoption,
which is attracting more competition to the broadband market from cable
operators, which see the service as a perfect companion to their pay-TV
offerings. So far, bundling has attracted mostly people in high-end
socioeconomic groups who can afford these services.

Given that Latin America's GDP per capita was $7,856 in 2008, operators must
face the fact that to keep penetration of fixed services growing and meet
revenue expectations, even saturating the highest-income strata won't be enough.
By the same token, incumbent operators must use creativity to shield their
current customers from growing competition while keeping their ARPS as high as
possible. Given Latin America's unequal income distribution, the still low
penetration levels of fixed services and the difficult global environment,
Pyramid Research believes that the bundling strategies with the best chance of
success for operators involve broadening their offerings to attract several
income segments and financing equipment to overcome device penetration barriers.

This report examines the multiplay strategies of several leading operators in
Latin America and the rationale for engaging customers outside the higher-income
population segments. It compares the cost of multiplay services across several
markets to demonstrate that there is potential in Latin America for costs to
come down, which would boost penetration. Finally, case studies of two
integrated operators - NET Serviços in Brazil and Claro in Central America -
examine the strategic challenges and choices involved in expanding target
markets through bundling.

Key Topics Covered:

* Introduction
* Multiplay strategy
* Income inequality requires a sophisticated bundling strategy
* Current penetration levels present an opportunity
* For operators, the challenge is to find the right mix of prices
* Market detail
* Case study: NET Serviços has a package for every Brazilian budget
* Case study: Claro goes for the lowest segment in Central America
* Conclusions
* Key findings
* Recommendations
* Related resources
* Table of exhibits

Companies Mentioned:

* Amnet
* Claro
* El Salvador
* Claro
* Guatemala
* Claro
* Nicaragua
* Embratel
* Globo
* Millicom International
* NET Serviços
* Telecom El Salvador
* Telefónica
* Telgua
* Telmex International
* Telmex Peru
* Tigo
* Turbonett

For more information visit
http://www.researchandmarkets.com/research/6d4bf4/latin_america_tele.

Source: Pyramid Research, Inc.

Research and Markets
Laura Wood
Senior Manager
press@researchandmarkets.com
Fax from USA: 646-607-1907
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