May, 2013

Latin America Deep Dive Erasmo Rojas

Director America Latina y El Caribe

4G Americas

Latin America & Caribbean Wireless Technology Evolution 2000-2012

0

100

200

300

400

500

600

700

800

Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec-12

Mill

ion

s o

f Su

bsc

rip

tio

ns

GSM Analogue CDMA iDEN TDMA HSPA/HSPA+

Source: Informa Telecoms & Media, WCIS+ 4Q 2012

12% 16%

19% 23%

31% 43%

54%

66%

78%

87%

96% 106

%

www.4gamericas.org

0

100

200

300

400

500

600

700

2010 2011 2012

3GPP

CDMA

iDEN

Wireless Technology Growth Latin America

Subscriptions By Technology

Source: Informa Telecoms & Media, WCIS+, December 2012 Estimates

650 M

603 M 532 M

93%

95% 96%

5% 3% 2%

Sub

scri

pti

on

s (M

illio

ns)

www.4gamericas.org

26%

Top Operators in Latin America at YE 2012

35%

13%

7%

4% 2%

13%

176 Million

239 Million

92 Million

Total Subscriptions: 680 million

Economies of scale are key in Latin America; low ARPU and high prepaid market

Source: Operator quarterly reports, Informa Telecom & Media, February 2013 www.4gamericas.org

0 20 40 60 80 100 120 140 160

Bolivia

Peru

Guatemala

Colombia

Mexico

Venezuela

Ecuador

Argentina

Brazil

Chile

Top 10 Wireless Data Markets in Latin America by 4Q 2012

113%

102%

118%

97%

91%

72%

92%

95%

93%

96%

35%

32%

26%

13%

13%

10%

9%

9%

5%

4%

26 M

266 M

59 M

16 M

31 M

96 M

48 M

16 M

29 M

10 M

% Data % Voice Penetration

Average Latin America penetration: 93% voice and 19% data

Subscriptions

Source: Bank of America Merrill Lynch, Global Wireless Matrix 3Q2012, January 2013

(Millions)

www.4gamericas.org

GSM

79%

HSPA

17% iDEN,

CDMA

4%

LTE 0%

HSPA &

HSPA+

61%

GSM

31%

LTE 7%

iDEN,

CDMA

1%

December 2012 December 2017

Total Subscriptions 680 Million 858 Million

Mobile Broadband 113 Million (17%) 581 Million (68%)

December 2012

Source: Informa Telecoms & Media WCIS+ Subscription Forecast, March 2013

December 2017

Mobile Broadband Forecast in

Latin America (HSPA-LTE)

LTE

www.4gamericas.org

HSPA+ in Latin America & Caribbean 131 Million HSPA/HSPA+ estimated subscriptions HSPA/HSPA+ as of 1Q 20131

42 Mbps Dual Carrier

Chile Dominican Republic

Paraguay Puerto Rico

96 commercial HSPA networks in 42 countries 65 commercial HSPA+ networks in 33 countries2

Argentina Bolivia Brazil Chile Colombia Ecuador Paraguay Peru Uruguay

2As of 5.10.13

Source: Public Announcements, Regulatory Bodies 1Informa Telecoms & Media, Mar 2013 Estimates

Antigua & Barbuda Aruba Bahamas Barbados Bermuda British Virgin Islands Cayman Islands Dominican Republic French West Indies Jamaica Netherlands Antilles Puerto Rico St Kitts & Nevis Trinidad & Tobago Turks & Caicos

Mexico Belize Costa Rica El Salvador Guatemala Honduras Nicaragua Panama

www.4gamericas.org

700 MHz 850 & 1900 MHz

1700/2100 MHz

1800 MHz

Antigua & Barbuda Digicel *

Bolivia Entel

Puerto Rico Claro

Open Mobile

Puerto Rico Sprint

Dominican Republic Tricom

Paraguay Personal Mexico Movistar

Telcel

Paraguay VOX

Puerto Rico AT&T

Uruguay Antel

Dominican Republic Orange Dominicana

1900 MHz

2500-2690 MHz

Colombia UNE

20 LTE Networks in Latin

America & the Caribbean

LTE

* Indicates TDD networks

All remaining networks are FDD

Data as of May 10, 2013

Claro Sky Telecom*

Oi TIM

On* Vivo

Brazil

www.4gamericas.org

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Typical data revenues by Q4 2012

Sources: Informa Telecoms & Media, Bank of America Merrill Lynch, Q3 2012

Average ARPU of US $ 12 by Q4 2012

Data contribution to service revenues. Latin America

average of 27% and 43% in North America

Voice

Data

41% 35% 35%

30% 25% 22% 21% 20%

www.4gamericas.org

Smartphone penetration Q4 2012

Latin America 14%

• Venezuela 20%

• Chile 18%

• Argentina 17%

• Brazil 16%

• Mexico 15%

• Peru 9%

• Colombia 8%

Source: Bank of America / Merrill Lynch, Inside Telecom, February 2013

USA smartphone penetration is 57% by February 2013

(comScore, Apr 2013)

www.4gamericas.org

Spectrum and Mobile Broadband Adoption Year End 2012

19% Average MBB penetration in Latin America

0 100 200 300 400 500 600

Chile

Peru

Colombia

Ecuador

Mexico

Brazil

Available market spectrum

524 MHz

210 MHz

110 MHz

215 MHz

170 MHz

380 MHz

MBB Penetration

32%

10%

13%

9%

5%

35%

Source: Regulatory announcements,

Informa Telecoms & Media, WCIS+, 2012 www.4gamericas.org

Dec 13 Dec 14 Dec 15 Dec 16 Dec 17

2 Million

7

Million

16 Million

30 Million

55 Million

Source: Informa Telecoms & Media, WCIS+ Forecast, February 2013

Subscriptions

LTE Growth Forecast In Latin America & Caribbean

LTE

www.4gamericas.org

Brazil Chile

Colombia

Argentina Chile

Colombia Ecuador Mexico

Peru Puerto Rico

Uruguay

Brazil

Recent Spectrum Allocations and Auctions in Latin America and the Caribbean

Source: Public Announcements, Regulatory Bodies

450 MHz

700 MHz

Antigua & Barbuda Bolivia

Brazil Chile

Colombia Ecuador Mexico

Puerto Rico

Dominican Republic Venezuela

1.8 GHz

2.6 GHz

1.7 / 2.1 GHz (AWS)

www.4gamericas.org

Under consideration in

some countries

2.3 GHz

450 MHz Brazil 14 MHz auctioned June 2012 for rural services

700 MHz

Chile 90 MHz to be auctioned mid 2013. Will use APT option

Brazil To be auctioned early 2014 after a public inquiry

Ecuador 30 MHz directed allocated to state operator. Will use APT option

Colombia 90 MHz to be auctioned in 2014. Will use APT option

Mexico Adopted APT option. No auction date yet

Bolivia LTE in service using USA option

Antigua & Barbuda

LTE in service (TDD) using USA option

Puerto Rico 4 LTE networks in service using USA option

Frequency Band Status February 2013

Low Bands

www.4gamericas.org

Frequency Band Status February 2013 High Bands

1.7/2.1 GHz (AWS)

Chile 90 MHz auctioned in 2009 to 2 new players

Colombia 90 MHz to be auctioned in 2013 Ecuador 40 MHz directed allocated to state operator

Peru 80 MHz to be auctioned in 2013 Mexico 60 MHz auctioned in 2010

Uruguay 40 MHz directed allocated to state operator. 50 MHz to be auctioned in 2013 Argentina 90 MHz to be auctioned in 2013 Uruguay LTE in service end 2011

Mexico LTE in service end 2012

1.8 GHz Dominican Republic LTE in service mid 2012

Venezuela Auctioned in 2012

2.6 GHz

Colombia 50 MHz auctioned in 2010. 90 MHz to be auctioned in 2013 Brazil 140 MHz FDD + 35 MHZ TDD auctioned in 2012

Chile 120 MHz FDD auctioned in 2012 Colombia LTE in service mid 2012 Brazil LTE TDD in service end 2011 and LTE FDD in service end 2012

www.4gamericas.org

Issues and Opportunities in Latin America & Caribbean

• Increasing use of Mobile Broadband for society solutions (i.e. healthcare, transportation, education)

• Spectrum cap policies still in place (new approach of caps per band)

• Increasingly restrictive wireless regulations in the region

www.4gamericas.org

Issues and Opportunities in Latin America & Caribbean

• Government initiatives and involvement in creating national broadband plans

• Average data contribution (VAS) to ARPU: 28% Vs. 41% in North America

• 17% HSPA/HSPA+ penetration : 113 million subscriptions

• Mobile Broadband penetration increasing and providing Internet access for the masses

www.4gamericas.org

Thank you!

www.4gamericas.org