mobiletelephony contribution

Mobile Telephony

ContributionLatin America

Caribbean Economies

toand the

This study was developed by Convergencia Research, from GSM Latin America Inc.’s request.

Neither GSM Latin America nor GSM Association nor their Members or Associate Members, are responsible for any use that might be made of this publication.

The views expressed in this publication are the sole responsibility of the author(s) and do not necessarily re� ect the views of GSM Latin America, GSM Association, their Members or Associate Members.

GSM Latin America Mobile Telephony Contribution to Latin America and The Caribbean Economies � 3

Contents

FIRST PART: “OBJECTIVES AND METHODOLOGICAL APPROACHES”

I. IntroductionII. ObjetivesIII. ScopeIV. Theoretical Frame IV.I. Model “A”. Macroeconomical Impact.IV.II. Model “B”. Productive Structure and Value Chain.IV.III. Model “C”. Contribution to connectivity.

SECOND PART: “GLOBAL CONTRIBUTION OF MOBILE TELEPHONYTO LATIN AMERICA AND THE CARIBBEAN ECONOMIES”

1. Mobile Telephony Contribution to Gross Domestic Product2. Mobile Telephony Contribution to National investment 3. Mobile Telephony Contribution to combat In� ation 4. Mobile Telephony Contribution to Employment 5. Mobile Telephony Contribution to Connectivity

THIRD PART: “MOBILE TELEPHONY CONTRIBUTION TOLATIN AMERICA AND THE CARIBBEAN ECONOMIES BY COUNTRY”

1. Argentina2. Brazil3. Chile4. Colombia5. Ecuador6. Peru7. Uruguay8. Venezuela9. Costa Rica10. El Salvador11. Guatemala12. Panama13. Mexico14. Jamaica15. Puerto Rico16. Dominican Republic17. Trinidad & Tobago

ANNEXES:

I. Consulting and Data sources II. Working Group

4 � GSM Latin America Mobile Telephony Contribution to Latin America and The Caribbean Economies

Objectives andMethodological Aproaches


First Part:

I. IntroductionThe Mobile Telephony industry has grown considerably during the last years. Its in� uence on all orders, both social and economic has become more important each day.

Latin America and the Caribbean are not unaware to this phenomenon in which Mobile Telephony has even exceeded Fixed Telephony in number of lines in service, covering geographical areas and economic segments until now excluded.

Beyond the social service provided by Mobile Telephony, governments have implanted in some cases tributary policies and speci� c regulations that partly limit mobile development. In other cases, governments have not considered the direct and indirect total bene� cial impact on GDP, on employment, on investments and on wealth given by this industry in each one of the nations to design policies that allow reaching all its growth potential.

II. ObjetivesAs mentioned earlier in the introduction, it is extremely important to be aware of Mobile Telephony contribution to Latin America and the Caribbean economies in order to de� ne policies tending to generate conditions that motivate the bene� cial impact of the industry.

Therefore, GSM Association Latin America has commissioned to an independent consultant a study on direct and indirect economic contribution of Mobile Telephony in 17 countries of Latin America and the Caribbean.

General objectives:

To estimate direct, concrete contribution from mobile services to each country’s • GDP and to show their relative importance comparing it with the economic sectors’ contribution of those same countries.To estimate the direct generation of • employment from mobile services.To estimate direct, concrete contribution from mobile services• to each country’s wealth and investment.To show the • indirect contribution generated in each country by mobile business value chain through its direct suppliers on employment, on beginning new businesses and on taxes collection.

The results in all the cases are presented by:

Country• Zones (South America, Central America & Mexico and the Caribbean). • Region (Total: 17 countries of Latin America and the Caribbean).•

III. ScopeThe study covers 17 countries from Latin America and the Caribbean; divided into eight from South America, � ve from Central America & Mexico and four countries from the Caribbean.

South AmericaArgentina

BrazilChile

ColombiaEcuador

PeruUruguay

Venezuela

Central America and MexicoCosta RicaEl SalvadorGuatemala

PanamaMexico

The CaribbeanJamaica

Puerto RicoDominican RepublicTrinidad & Tobago


Objectives and Methodological Aproaches

The 17 selected countries, as a whole, represent 96. 5% of GDP and the 90.0% of Latin America’s and the Caribbean population.

The eight Latin America’s selected countries represent 98. 7% of GDP and sum 95. 8% of the inhabitants. The � ve selected countries from Central America & Mexico represent 98. 4% of GDP and sum 91. 2% of the inhabitants. Finally, the four selected countries from the Caribbean represent 73. 5 % of GDP and the 44. 6 % of the region’s inhabitants excluding Cuba.

IV. Theoretical FrameIn order to ful� ll with the objective stated, two models have been designed to measure the economic contribution of Mobile Telephony; a third model has also been designed to measure contribution to connectivity.

IV.I. Model “A”. Macroeconomic Impact.

At the macroeconomic level the most representative variables have been studied in Model “A” to measure the Mobile Telephony contribution to the economies of each one of the countries covered by this study.

Investment (wealth)

Direct Employment

Gross Domestic Product Employment

Indirect Employment

Total Employment

Gross Fixed Capital Formation

Sales Demand for Goods

and Services to

other Industries

Mobile Telephony

National Economy

Zone Economy

Regional Economy: 17 countries of Latin America and the Caribbean

Inflation

Model “A”: Macroeconomic Impact of Mobile Telephony


First Part:

IV.I.I. Gross Domestic Product (GDP)

Why GDP? GDP represents the total value of all � nal goods and services produced within a country over a speci� ed period of time. It is the most important macro - economic magnitude for estimating an economy’s productive capacity.

What are our objectives? To understand the six-year period 2001 – 2006 of GDP behavior .• To know GDP conformation and identify the industries that contribute most in each country.• To estimate the Mobile Telephony contribution to GDP.• To compare the mobile industry contribution with other industries contribution to each country’s GDP.•

What methodologies were used and what sources were consulted?An economic analysis was carried out through the collection of each country’s Of� cial Statistics and Measurement.• Economic and � nancial information of the Industry’s main companies were collected.• The information was complemented with surveys and interviews to experts.• To assure comparisons and conclusions consistency among industries and countries, homogeneous currencies were • employed and data was normalized.

IV.I.II. National Investment

Why Gross Fixed Capital Formation?A good measurement of a country wealth is the Gross Fixed Capital Formation. This represents the acquisition of capital assets of an economy; understanding that these are the production means to produce other goods.

Fixed capital assets are: machinery and equipment, transport equipment, dwelling and non - residential buildings and its enlargements and/or improvements, infrastructure works, cultivated assets and intangible produced assets (software, patents, etc.).

What are our objectives?To know Gross Fixed Capital Formation of each country in the six -year period 2001 – 2006.• To estimate the capital assets that the Mobile Telephony industry uses and comparing it with the national investment • generated by the rest of the economy.To reason regarding Mobile Telephony contribution to national investment.•

What methodologies were used and what sources were consulted?An economic analysis was carried out through the collection of each country’s Of� cial Statistics and Measurement.• Economic and � nancial information of the Industry’s main companies were collected. • To assure comparisons and conclusions consistency among industries and countries, homogeneous currencies were • employed and data was normalized.

IV.I.III. In� ation

Why In� ation?The in� ation is a rise in the general level of prices of goods and services in an economy. To measure this increment, different indexes that measure the average growth of a basket of goods have been created. The Consumer Price Index (CPI) is the most worldwide used and disclosed measure which indicates the variation expressed in percentage in the average price of goods and services that a typical consumer acquires.

Most countries from Latin America and the Caribbean have suffered important periods of in� ation to the detriment of their economies.

Meanwhile, the strong competition among the mobile sector operators over the last years has resulted in a constant prices reduction of the service and its average revenue per user (ARPU) in those countries where general economy stability has existed; and much lower increases than those from the rest of the general basket of prices where in� ation has existed. Mobile prices and



ARPU of Mobile Telephony have remained sFigure or even decreased in countries that have experienced relatively low in� ation rates.

On the other hand, in countries with signi� cant levels of in� ation the traf� c termination tariff from � xed to mobile has not followed the increment level that other goods and services observed. This has generated complications to companies that have experienced, as a consequence of in� ation, increments in their productive structures (incorporations of goods, expenses and wages) without the corresponding adjustment in their levels of revenues.

What are our objectives?To detail the CPI evolution of each country in the six- year period from 2001 - 2006. • To observe the CPI main components evolution in the same period.• To know the average prices evolution of prepaid minute and postpaid minute of mobile telephone service.• To know the ARPU evolution (Average Revenue per User). The monthly average revenue per user that a Mobile • Telephony company obtains. Revenues are composed by the number of billed minutes multiplied by its price. Then, the increase in ARPU may be generated by an increase in the number of minutes used by user or by the price modi� cation of those minutes. ARPU is a metric used worldwide and it uni� es concepts in order to make comparisons that involve Prices.To make comparisons between the increase in the average revenues per user (ARPU) and the rest of the economy • prices.To conclude about the cost behavior of mobile telephones with respect to In� ation.•

What methodologies were used and what sources were applied?A progressive economic analysis was carried out through the collection of statistical data generated by Governments of� cial organisms and by private studies.Regarding prices evolution of the mobile telephone service, as it was possible, the analysis was divided in prepaid and postpaid. Weighted averages were estimated for both prices based on the information provided by the companies and/or regulatory entities. Indexes and prices were homogenized to compare them among different industries and countries.

IV.I.IV. Employment

Why employment?Latin America and the Caribbean are world regions where unemployment levels still remain very high. The Mobile Telephony invation has generated employment to millions of people worldwide. It is essential to estimate how the industry contributes to unemployment mitigation through workforce demand.

What are our objectives?To estimate the number of people directly employed by Mobile Telephone companies.• To estimate the number of people undirectly employed by Mobile Telephone companie.•

What methodologies were used and what sources were consulted?Information provided by the Mobile Telephony main companies and representative companies of other industries, Mobile Telephony providers, was collected. The information was complemented with surveys and interviews to experts.


First Part:

IV.II. Model “B”. Productive Structure and Value Chain

End Users

Mobile Operators

Productive Goods Operating Expenses

Acces Hardware

Sites

Troncal Network

Systems

Terminal Equipments

Buildings

Other Goods

Access and Interconnection

Network Rental

Dealers

Advertising

Maintenance and Repairs

Suppliers

Other Expenses

Sales to End Users

Demand for Goods and Services to Providers

Taxes Productive Goods Operating Expenses Employment

Model “B”: Productive Structure and Value Chain

First Link of Value Chain

Why Productive Structure and Value Chain?Mobile Operators “Productive Structure” is de� ned as:

Investment in Productive Goods.• Operating Expenses (services) to develop their activity.• Their Human Resources (employment).•

The Value Chain of a Mobile Operator is de� ned as the interrelation that produces economic effects among:End users of mobile telephone service.• Mobile Operator.• Productive Goods and Services Providers that facilitate the development of the Mobile Telephony activity.• Employees.• Government.•



Mobile Telephony demands goods and services to other sectors of the economy based on its Productive Structure. At the same time, these sectors demand goods and services to others, and so forth generating Value Chains that embrace the whole economy activity. The Value Chain link contribution generated specially by an industry is not directly observable by any macro - economic magnitude.

What are our objectives?Model “B” shows the Mobile Telephony contribution generated on other industries and economy sectors based on its Productive Structure and its Value Chain composition.

Speci� cally:What contribution does mobile telephony generate in the development of other industries from an economic • perspective? (Goods and Services Demand - OPEX and CAPEX). To quantify contribution to GDP from the Demand for goods and services perspective (OPEX and CAPEX).• What contribution does mobile telephony generate in the work force demand in other industries. •

What methodologies were used and what sources were consulted?An economic and � nancial study will be carried out regarding the application of analysis techniques of counFigure states.

Regarding the work process:The present study scope is limited to the analysis of the said � rst chain link. This is:•

- Productive Goods Providers: Network, Sites, Troncal Network, Systems, Telephones Equipment, Buildings, etc.- Services Providers that generate Operating Expenses: Interconnection and Access, Dealers, Advertising, Maintenance

and Repairs, etc. - Employees: This point is described and analyzed in Model “A” context - Macroeconomic Impact of Mobile Telephony.

However, the indirect employment generated by purchasing Goods and Services from its Suppliers is analyzed.The Mobile Telephony companies that operate in each country are identi� ed.• Considering the market share of these companies; in the analysis were included all those companies, that added, • explain more than 70% of each country’s Mobile Telephony market. The Productive Structure of each company was evaluated one by one.• Main Goods and Services Providers were detected and related with their respective industries.• From the Productive Structure the Value Chain generated by these companies is drawn and quanti� ed. This allows • understanding the interrelation among industries that Mobile Telephony proposes.Results were added at country level to standardize a Value Chain that represents all the companies.•

Regarding the data bases in which our study is sustained, these are the economic and � nancial information of the main Mobile Telephony companies and their Goods and Services Providers. Closed surveys were also carried out and reinforced through interviews to the companies’ responsibles.


First Part:

IV.III. Model “C”. Contribution to Connectivity

USERS

Mobile TelephonyFixed Telephony

Internet

Why Contribution to Connectivity?Today Mobile Telephony is giving services to population’s sectors and geographical areas of Latin America and the Caribbean where Fixed Telephony companies have not arrived. Therefore, it contributes to reduce the communication divide regarding facilities that today exists.

What are our objectives?The idea is to estimate the contribution to connectivity that today Mobile Telephony carries out and to compare it with other ways of communication used, as Fixed Telephony and Internet.

Speci� cally:To know the number of lines of Fixed Telephony users and the number of Mobile Telephony lines.• To know the number of Internet Connections.•

What methodologies were used and what sources were consulted?A quantitative economic study was carried out through statistics and of� cial data. Information provided by the companies and regulatory organisms of Mobile, Fixed Telephony and Internet were also used.

Mobile Telephony Global Contribution toLatin America and the Caribbean Economies


Second Part:

1. Mobile Telephony Contribution to Gross Domestic Product

1.1. Regional GDP EvolutionFigure 1.1.1. Region: Average Variation Rate Gross Domestic Product (Constant ) 2001-2006

Annual Variation % 2002 2003 2004 2005 2006 '06 vs. '01

Argentina -10,9% 8,8% 9,0% 9,2% 8,5% 25,2%Brazil 2,7% 1,1% 5,7% 2,9% 3,7% 17,1%Chile 2,2% 3,9% 6,0% 5,7% 4,0% 23,7%Colombia 1,9% 3,9% 4,9% 4,7% 6,8% 24,2%Ecuador 4,2% 3,6% 7,9% 4,7% 4,3% 27,3%Peru 5,2% 3,9% 5,2% 6,4% 8,0% 32,2%Uruguay -11,0% 2,2% 11,8% 6,6% 7,0% 16,0%Venezuela -8,9% -7,8% 18,3% 10,3% 10,3% 21,1%South America -1,8% 2,5% 8,6% 6,3% 6,6% 23,3%Costa Rica 2,9% 6,4% 4,3% 5,9% 7,9% 30,5%El Salvador 2,3% 2,3% 1,8% 2,8% 4,2% 14,1%Guatemala 3,9% 2,5% 3,2% 3,5% 4,9% 19,2%Panama 2,2% 4,2% 7,5% 6,9% 8,1% 32,4%Mexico 0,8% 1,4% 4,2% 2,8% 4,8% 14,6%Central America & Mexico 2,4% 3,4% 4,2% 4,4% 6,0% 22,2%Jamaica 1,1% 2,3% 0,9% 1,4% 2,6% 8,6%Puerto Rico 0,9% 0,1% 3,1% 0,3% 0,7% 5,1%Dominican Republic 5,0% -0,4% 2,7% 9,2% 10,7% 29,9%Trinidad & Tobago 7,9% 14,4% 8,8% 8,0% 12,0% 62,5%The Caribbean 3,7% 4,1% 3,9% 4,7% 6,5% 26,5%Average Region 0,7% 3,1% 6,2% 5,4% 6,4% 23,7%Source : Economic Commission for Latin America and the Caribbean Statistical (CEPAL- ECLAC) Organism and National Central Banks

As a whole, the region’s 17 countries under study represent 96.5% of all Latin America and the Caribbean Gross Domestic Product (GDP); In 2006 GDP growth averaged 6.4% in the region. Although, these are preliminary � gures presented by the Economic Commission for Latin America and the Caribbean (CEPAL), Central Banks and Of� cial Statistical Organisms of each one of the countries; the rate is considered to be very close to the real one.

The good news for the region is that it has experienced a growth rate for the third consecutive year higher than 5% and has considerable overcome the uncertainty and crisis years of this decade beginning. This happened in all Latin America, but Argentina, Venezuela and Uruguay were more deeply impacted.

The region simple average growth has generated an accumulated rate of 23.7% in the � ve-year period 2001-2006. Subtotals per zone show similar evolution indicators: Latin America increased 23. 3%, Central America and Mexico 22. 2% and the Caribbean 26. 5%.

This evolution in the region economies is not an isolated fact; on the contrary, it is produced in a worldwide generalized growth context. Although, the region growth rates are high as for their own historical development it is important to point out that are lower to those observed in other developing regions like the case of some Asian countries. Beyond the region’s good evolution, it can not be ignored the low growth rates registered by the two main economies of the area, Brazil and Mexico that, as a whole, represent approximately 63% of the Total Gross Product; situation that generates a smaller increment in the region.



ntributiiiioon to

Figure 1.1.2. Region: Average Variation Rate Constant Gross Domestic Product 2001-2006

Source : CEPAL (ECLAC) Statistical Organism and National Central Banks

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The growth observed in some Latin American countries is outstanding. Argentina and Venezuela have generated very important growths after the crisis period. Growth rates higher than 8% in the case of Argentina were observed in the last four years of study. In 2004 Venezuela grew 18.3% to sustain increases higher than 10% in the years to come. It is also important to mention the sustained and sFigure growth of other countries with better accumulated evolution, although at lower annual rates, as the cases of Colombia, Ecuador and Peru.

The evolution of Panama and Costa Rica in Central America is outstanding. Both countries accumulated in six years growth rates higher than 30%. On the other hand, in the Caribbean; Trinidad & Tobago showed the most important growth of the zone (62. 5%) while Dominican Republic generated a rate close to 30%.

1.2. Regional GDP Composition by Activity Sector

Figure 1.2.1. Region: GDP Composition by Activity Sector 2001-2006% Participation 2001 2002 2003 2004 2005 2006

Agriculture, Forestry, fishing and Hunting 8,4% 8,0% 8,1% 7,9% 7,9% 8,0%Mining and Quarrying 4,8% 6,3% 6,7% 6,9% 6,7% 7,1%Manufacturing Industry 17,7% 17,0% 16,9% 17,1% 17,1% 17,1%Electricity, Gas and Water 2,6% 2,7% 2,6% 2,6% 2,6% 2,5%Construction 5,2% 5,3% 5,2% 5,3% 5,4% 5,4%Trade, Restaurant and Hotels 16,0% 15,6% 15,5% 15,7% 15,9% 15,4%Transport and Communications 9,3% 9,5% 9,7% 9,9% 10,3% 10,5%Financial and Business Services 15,8% 15,9% 15,6% 15,4% 15,4% 15,6%Personal Services and others 20,2% 19,8% 19,6% 19,2% 18,9% 18,4%Source : CEPAL (ECLAC) Statistical Organism and National Central Banks

The regional GDP composition by Activity Sector remained sFigure with no major changes in the six year period under analysis.

The manufacturing industry is still the most important economic sector. It contributed with 17.1% of the regional GDP in 2006; followed in the second place by Financial, Real State and Business Services (15.6%), and in the third place by Trade, Restaurants and Hotels (15.4%). More than 48% of regional Product is grouped among these three sectors. The category “Personal Services sector and others” considers the activity of national governments; its analysis has been excluded from this study.


Second Part:

Mining and Quarrying are standed out among the sectors that have improved their participation in the Gross Regional Product; it has increased by 1.5 its activity participating with 4.8% in 2001 to 7.1% in 2006. On the other hand, Transport and Communication Services sector that includes the Mobile Telephony activity has grown 1.1 times participating with 10.5% of Regional Gross Product in 2006; it is the second sector that has increased most its contribution to GDP in Latin America over the last � ve years, behind mining and oil sectors. The Mobile Telephony taking off is the base of this phenomenon.

Figure 1.2.2. Region: Average Variation Rate of GDP by Activity Sector 2001-2006Annual Variation % 2002 2003 2004 2005 2006 '06 vs. '01

Agriculture, Forestry, Fishing and Hunting 0,3% 4,6% 2,0% 3,4% 3,1% 20,9%Mining and Quarrying -1,0% 9,1% 5,1% 2,7% 6,9% 26,6%Manufacturing Industry -0,2% 2,9% 6,2% 5,4% 7,7% 21,9%Electricity, Gas and Water 3,6% 2,1% 2,7% 3,8% 4,3% 19,6%Construction -1,5% 3,9% 6,1% 8,8% 13,8% 35,1%Trade, Restaurant and Hotels -1,8% 2,6% 7,4% 6,6% 6,8% 22,8%Transport and Communications 3,0% 4,9% 8,4% 8,8% 8,9% 37,5%Financial and Business Services 1,6% 2,2% 5,1% 5,4% 6,3% 23,3%Personal Services and others 1,2% 2,2% 3,1% 3,3% 3,6% 14,9%Source : CEPAL (ECLAC) Statistical Organism and National Central Banks

As it was mentioned, the simple accumulated average growth of the region has been of 23.7% in the six-year period, 2001-2006.The analysis per Activity Sector shows that Transport and Communications have generated the most signi� cant growth with an accumulated rate of 37.5%, even higher than the real state boom. The importance of this result lies in that the Mobile Telephony activity is included by this sector and it has grown more than 200% in this period like it is observed in the next chapters; it is the major engine of this industry’s added growth rate. The countries that have observed the highest accumulated growth in Transport and Communications are:

Costa Rica 71,4%Panama 63,2%Guatemala 49,6%Argentina 47,2%Venezuela 45,6%

Construction has been the second largest development sector registering a growth of 35.1%; although, the accumulated variation of the countries where this activity has grown most is much higher causing a true real estate impact and economic development. The following countries have registered the highest growth:

Trinidad & Tobago 83,8%Colombia 83,6%Panama 66,8%Argentina 65,9%Peru 46,5%



ntributiiiioon to

1.3. Mobile Telephony Contribution to Regional GDP The Mobile Telephony contribution to Gross Regional Product is analyzed in this chapter from a supply and demand perspective for goods and services to national economies.

Supply of goods and services includes the Total Sales that Mobile Telephony operators carried out (voice transmission, data, and added value services and handsets sale).

Demand for goods and services includes the Total Expenses incurred by the operators in order to carry out their operation (OPEX, the acronym in English for Operating Expenditure) and investment in � xed assets (CAPEX, the acronym in English for Capital Expenditures); it does not include amortization or depreciation, � nancial expenses (interest, expenses and commissions), neither taxes except for the Value Added Tax.

The analysis includes the operator companies that offered services between 2001 and 2006. The amounts of Sales (Supply) as OPEX and CAPEX (Demand) contain the Value Added Tax, that is to say, amounts at � nal consumer’s price in order to facilitate comparisons with � gures of GDP and Investment of each country.

Figure 1.3.1. Region: Evolution of Mobile Telephony Supply and Demand for Goods and Services 2001-2006

Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

59.008

46.570

34.372

25.23920.64020.397

17.860 17.52221.515

30.334

51.286

43.139

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

2001 2002 2003 2004 2005 2006

US

$ M

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Accumulated Supply ’01 to ‘06

206.225Accumulated

Demand ‘01 to ‘06

181.656

The Mobile Telephony contribution to Gross Regional Product was of approximately US $206.225 million from 2001 to 2006 through the provision of goods and services (Sales).

Total approximated sales in 2006 were US $59. 008 million versus US $20. 397 million in 2001. Therefore, in only six years the annual sales were multiplied 2.9 times; an increase of US $38.612 million.

The Mobile Telephony contribution to Gross Regional Product growth was of approximately US $181.656 million from goods and services Demand perspective (OPEX + CAPEX) from 2001 to 2006.

The total Demand in 2006 was US $51.286 million while in 2001 were US $17.860 million. The annual demand was multiplied 2.9 times reaching US $33.427 million in only six years similar to that of mobile telephony services Supply (total sales).


Second Part:

Figure 1.3.2. Region: Supply for Goods and Services (Sales) of Mobile Telephony 2001-2006US $ Millions 2001 2002 2003 2004 2005 2006 Acum.

Argentina 3.531 1.139 1.422 2.573 4.112 5.720 18.496Brazil 5.085 6.222 7.613 10.592 15.135 18.304 62.952Chile 998 1.260 1.441 1.732 1.908 2.813 10.152Colombia 541 734 935 1.626 2.776 3.672 10.285Ecuador 181 235 418 649 1.056 1.211 3.750Peru 533 625 786 909 1.012 1.303 5.169Uruguay s.d. 202 132 152 185 344 1.016Venezuela 1.747 1.097 1.094 1.517 2.704 3.849 12.008South America 12.616 11.514 13.841 19.752 28.888 37.217 123.828Costa Rica 395 425 482 508 565 735 3.109El Salvador 194 212 247 362 515 760 2.291Guatemala s.d. s.d. 327 620 1.089 1.325 3.360Panama 181 192 217 330 400 447 1.767Mexico 5.777 6.982 8.437 10.900 12.993 15.931 61.020Central America & Mexico 6.547 7.810 9.710 12.720 15.562 19.198 71.547Jamaica s.d. s.d. 242 257 266 299 1.065Puerto Rico 880 896 941 1.032 1.141 1.232 6.121Dominican Republic 309 350 414 486 550 859 2.968Trinidad & Tobago 44 70 91 125 163 203 696The Caribbean 1.234 1.317 1.687 1.900 2.120 2.593 10.850Total 20.397 20.640 25.239 34.372 46.570 59.008 206.225Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

From the total regional accumulated sales of US $206.225 million in the 2001-2006 period South America reported sales of US $123.828 million; Central America and Mexico of US $71.547 million and the Caribbean of US $10.850 million.

Figure 1.3.3. Region: Mobile Telephony Sales Ranking by country 2001-2006US $ Million Accum. %

Brazil 62.952 30,5%Mexico 61.020 29,6%Argentina 18.496 9,0%Venezuela 12.008 5,8%Colombia 10.285 5,0%Chile 10.152 4,9%6 Countries Subtotal 174.912 84,8%Region total 206.225 100,0%Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

Six countries; Brazil, Mexico, Argentina, Venezuela, Colombia and Chile accumulate 84.8% of the total Mobile Telephony Sales in the region, while 60.1% of total sales were contributed by Brazil and Mexico together.



ntributiiiioon to

Figure 1.3.4. Region: Demand for Goods and Services (OPEX + CAPEX) of Mobile Telephony 2001-2006US $ Million 2001 2002 2003 2004 2005 2006 Accum.

Argentina 2.789 911 1.046 2.221 3.073 5.048 15.088Brazil 4.221 5.053 6.185 9.988 16.039 18.760 60.246Chile 982 1.042 1.082 1.376 1.675 2.487 8.643Colombia 606 627 872 1.486 2.866 3.508 9.965Ecuador 187 194 342 558 1.018 1.063 3.363Peru 534 554 680 806 907 1.148 4.628Uruguay s.d. 190 123 151 184 331 978Venezuela 1.480 899 747 1.247 2.429 3.555 10.357South America 10.800 9.469 11.076 17.833 28.192 35.899 113.268Costa Rica 498 555 816 709 661 713 3.952El Salvador 204 207 200 311 431 663 2.016Guatemala s.d. s.d. 271 548 921 1.003 2.743Panama 127 129 149 223 302 335 1.265Mexico 5.124 6.003 7.411 8.915 10.626 10.358 48.436Central America & Mexico 5.952 6.894 8.847 10.706 12.941 13.072 58.412Jamaica s.d. s.d. 347 344 346 278 1.315Puerto Rico 807 802 815 933 1.055 1.134 5.546Dominican Republic 263 298 352 413 467 730 2.523Trinidad & Tobago 38 60 77 106 138 173 592Caribe 1.107 1.159 1.592 1.796 2.006 2.315 9.976Total 17.860 17.522 21.515 30.334 43.139 51.286 181.656Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

From the US $181.656 million total Demand carried out by Mobile Telephony in the region under the period of analysis; South America mobile sector consumed US $113. 268 million, Central America and Mexico US $58.412 million, and the Caribbean US $9.976 million.

Figure 1.3.5. Region: Accumulated Variation Ranking OPEX + CAPEX of Mobile Telephony by country 2001-2006US $ Million Accum. %

Brazil 60.246 33,2%Mexico 48.436 26,7%Argentina 15.088 8,3%Venezuela 10.357 5,7%Colombia 9.965 5,5%Chile 8.643 4,8%6 Countries Subtotal 152.735 84,1%Region total 181.656 100,0%Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

Brazil and Mexico together, just like Sales Ranking, concentrate the highest participation of the regional Demand for goods and services with 59.8%. Also, the same six countries; Argentina, Venezuela, Colombia and Chile, together with Brazil and Mexico concentrate 84.1% of the region’s Mobile Telephony Demand.


Second Part:

Figure 1.3.6. Region: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : CEPAL (ECLAC) Statistical Organism and National Central Banks, Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

32,2%

34,4%37,2%

10,3%

18,3%

2,4%

26,9%

37,4%

17,2%

42,7%

6,4%5,4%6,2%3,1%0,7%0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

45,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

% Supply: Var. ’06 vs ‘01

211,4%

Demand: Var. ’06 vs ‘01

189,3%

Region GDP : Var. ’06 vs ‘01

23,7%

The simple average growth rate of Mobile Telephony supply for goods and services (Sales) in the region was 211.4% in the 2001-2006 period.

A growth rate of 189.3% was registered by the Demand for goods and services (OPEX + CAPEX) of Mobile Telephony to other sectors of the national economies.

In the same period, the whole region registered a growth rate of 23.7%. Compared to the region’s economy the growth of Mobile Telephony has been 9 times higher from the Supply perspective and 8 times from the Demand perspective.



ntributiiiioon to

Figure 1.3.7. Region: Accumulated Average Variation Rate of Mobile Telephony, GDP and Sectors

Source : CEPAL (ECLAC) Statistical Organism and National Central Banks, Reports and Balances of Companies,

Regulatory Organisms and Convergencia Research estimations

37,5% 35,1%26,6% 23,7% 23,3% 22,8% 21,9% 20,9% 19,6%

211,4%

0,0%

50,0%

100,0%

150,0%

200,0%

250,0%

Mob

ileTe

leph

ony

Tran

spor

t &C

omm

unic

atio

ns

Con

stru

ctio

n

Min

ing

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ion

GD

P

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ncia

l &Bu

sine

ss S

ervs

.

Trad

e

Man

ufac

turin

g

Agric

ultu

re,

Hun

ting,

etc

Publ

ic S

ervi

ces

Acc

umul

ated

Var

iatio

n %

'06

vs. '

01

In the Figure above the variation rate of Mobile Telephony Supply is compared with the rates generated by the activity sectors, component of Gross Regional Product. It is observed that Mobile Telephony occupies by far the � rst place registering a rate of 211.4%.

Transport and Communications sector is located in second place registering a 37.5% rate. It is necessary to point out that Mobile Telephony activity is concentrated within this sector what explains its growth.

The explosive growth of Mobile Telephony does not have any comparison with that happened in the rest of the region’s activity sectors turning the mobile industry into a great generating source of social and economic development for the region in the present and in the next years.


Second Part:

Figure 1.3.8. Region: Average Annual Variation Rate of Mobile Telephony Sales and GDP 2001-2006Variación Anual % 2002 2003 2004 2005 2006 '06 vs. '01

Argentina -67,7% 24,9% 80,9% 59,8% 39,1% 62,0%Brazil 22,4% 22,4% 39,1% 42,9% 20,9% 260,0%Chile 26,3% 14,4% 20,2% 10,2% 47,4% 182,0%Colombia 35,8% 27,4% 74,0% 70,7% 32,3% 579,2%Ecuador 29,8% 77,6% 55,3% 62,6% 14,7% 567,6%Peru 17,2% 25,8% 15,7% 11,3% 28,7% 144,3%Uruguay 1 s.d. -34,5% 15,0% 21,4% 86,5% 70,5%Venezuela -37,2% -0,3% 38,8% 78,2% 42,4% 120,3%South America 3,8% 19,7% 42,4% 44,6% 39,0% 248,2%Costa Rica 7,6% 13,4% 5,5% 11,2% 30,1% 86,1%El Salvador 9,1% 16,7% 46,3% 42,3% 47,6% 291,1%Guatemala 2 s.d. s.d. 89,7% 75,7% 21,7% 305,6%Panama 5,8% 13,3% 51,9% 21,3% 11,8% 147,0%Mexico 20,9% 20,8% 29,2% 19,2% 22,6% 175,8%Central America & Mexico 10,8% 16,1% 44,5% 33,9% 26,8% 201,1%Jamaica 2 s.d. s.d. 6,5% 3,6% 12,3% 23,9%Puerto Rico 1,8% 5,0% 9,7% 10,6% 7,9% 40,0%Dominican Republic 13,3% 18,3% 17,3% 13,1% 56,3% 177,6%Trinidad & Tobago 59,4% 28,7% 37,9% 30,2% 25,0% 360,5%The Caribbean 24,8% 17,3% 17,8% 14,4% 25,4% 150,5%Average Region 10,3% 18,3% 37,2% 34,4% 32,2% 211,4%(1) Uruguay’s accumulated variation corresponds to '06 vs. '02 period(2) Guatemala’s and Jamaica’s accumulated variation correspond to '06 vs. '03 periodSource : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

Although, the simple average growth rate of the region was 211.4%, important variations are observed among the different areas and even among countries; South America showed an increment rate of 248.2%, Central America and Mexico of 201.1% and the Caribbean of 150.5%.

Figure 1.3.9. Region: Accumulated Variation Ranking of Mobile Telephony Sales by country 2001-2006Accumulated Variation % '06 vs. '01

Colombia 579,2%Ecuador 567,6%Trinidad & Tobago 360,5%Guatemala 1 305,6%El Salvador 291,1%Brazil 260,0%6 Countries Average 394,0%Region Average 211,4%(1)Guatemala’s accumulated variation correspond to '06 vs. '03 periodSource : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The Mobile Telephony growth in the region is amazing. However, in some countries it is even higher. In the cases of Colombia and Ecuador, the growth almost triplicated the average region with rates of 579.2% and 567.6% accumulated in � ve years.

It is important to point out the 260% growth observed in Brazil, since this country is the region main economy regarding GDP, Population and even the country that contributes most to the regional Mobile Telephony Sales.

Although Argentina is not listed in the ranking it is an interesting case, since in the � ve-year period 2002-2006 after the devaluation crisis it has registered a growth of 402.2%; it is the third country with higher Mobile Telephony Sales in the region.



ntributiiiioon to

Figure 1.3.10. Region: Average Annual Variation Rate OPEX + CAPEX of Mobile Telephony and GDP 2001-2006Annual Variation % 2002 2003 2004 2005 2006 '06 vs. '01

Argentina -67,3% 14,9% 112,2% 38,4% 64,2% 81,0%Brazil 19,7% 22,4% 61,5% 60,6% 17,0% 344,5%Chile 6,1% 3,9% 27,2% 21,8% 48,5% 153,3%Colombia 3,4% 39,1% 70,5% 92,8% 22,4% 478,7%Ecuador 3,6% 76,4% 63,0% 82,4% 4,4% 467,4%Peru 3,7% 22,7% 18,6% 12,6% 26,5% 114,9%Uruguay 1 s.d. -35,4% 23,5% 21,4% 80,4% 74,6%Venezuela -39,3% -17,0% 67,0% 94,8% 46,3% 140,1%South America -10,0% 15,9% 55,4% 53,1% 38,7% 231,8%Costa Rica 11,5% 47,0% -13,2% -6,7% 7,8% 43,2%El Salvador 1,3% -3,1% 55,3% 38,4% 53,8% 224,4%Guatemala 2 s.d. s.d. 102,0% 68,2% 8,9% 270,1%Panama 1,7% 15,7% 49,8% 35,2% 11,1% 164,9%Mexico 17,2% 23,5% 20,3% 19,2% -2,5% 102,2%Central America & Mexico 7,9% 20,8% 42,9% 30,9% 15,8% 160,9%Jamaica 2 s.d. s.d. -1,1% 0,7% -19,7% -20,0%Puerto Rico -0,6% 1,7% 14,5% 13,1% 7,6% 40,6%Dominican Republic 13,3% 18,3% 17,3% 13,1% 56,3% 177,6%Trinidad & Tobago 59,4% 28,7% 37,9% 30,2% 25,0% 360,5%The Caribbean 24,0% 16,2% 17,2% 14,3% 17,3% 139,7%Region Average 2,4% 17,2% 42,7% 37,4% 26,9% 189,3%(1) Uruguay’s accumulated variation corresponds to '06 vs. '02 period(2) Guatemala’s and Jamaica’s accumulated variation correspond to '06 vs. '03 periodSource : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

From the Demand perspective signi� cant variations by area and by country are also observed regarding the growth average of 189.3%: South America generated an accumulated rate of 231.8%, Central America and Mexico of 160.9% and the Caribbean of 139.7%.

Figure 1.3.11. Region: Accumulated Variation Ranking of Mobile Telephony OPEX + CAPEX by country 2001-2006Accumulated Variation % '06 vs. '01

Colombia 478,7%Ecuador 467,4%Trinidad & Tobago 360,5%Brazil 344,5%Guatemala 1 270,1%El Salvador 224,4%6 Countries Average 357,6%Region Average 189,3%1) Guatemala’s accumulated variation corresponds to '06 vs. '03 periodSource : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The conclusion is similar to what happened in the Sales analysis. The average rates in the continent were high, but these were thoroughly exceeded by some countries. Colombia and Ecuador almost triplicated the region’s growth average with rates of 478.7% and 467.4% accumulated in � ve years.

In Brazil, the region’s main economy, Mobile Telephony increased its Demand levels for goods and services in 344.5%. Argentina, the third country regarding Supply and Demand of Mobile Telephony registered a growth of 454.1% in the � ve-year period after the devaluation crisis (2002-2006).


Second Part:

Figure 1.3.12. Region: Mobile Telephony as percentage of GDP 2001-2006

Source : CEPAL (ECLAC) Statistical Organism and National Central Banks Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

1,3%1,6%

1,9%2,1%

2,4%

1,2%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

2001 2002 2003 2004 2005 2006

% P

artic

ipat

ion

of G

DP

In 2001, the Mobile Telephony activity in the region was 1.2% of Gross Domestic Product. In 2006, it was duplicated to 2,4%.

Figure 1.3.13. Region: Mobile Telephony as porcentage of GDP 2001-2006Participation % 2001 2002 2003 2004 2005 2006

Argentina 1,3% 1,1% 1,1% 1,7% 2,2% 2,7%Brazil 0,9% 1,2% 1,4% 1,6% 1,7% 1,9%Chile 1,4% 1,9% 1,9% 1,8% 1,6% 1,9%Colombia 0,7% 0,9% 1,2% 1,7% 2,3% 2,7%Ecuador 0,9% 0,9% 1,5% 2,0% 2,9% 3,0%Peru 1,0% 1,1% 1,3% 1,3% 1,3% 1,4%Uruguay s.d. 1,6% 1,2% 1,2% 1,1% 1,8%Venezuela 1,4% 1,2% 1,3% 1,3% 1,9% 2,1%South America 1,1% 1,2% 1,4% 1,6% 1,9% 2,2%Costa Rica 2,4% 2,5% 2,8% 2,7% 2,8% 3,3%El Salvador 1,4% 1,5% 1,6% 2,3% 3,0% 4,2%Guatemala s.d. s.d. 1,5% 2,6% 4,0% 4,3%Panama 1,5% 1,6% 1,7% 2,3% 2,6% 2,6%Mexico 0,9% 1,1% 1,3% 1,6% 1,7% 1,9%Central America & Mexico 1,6% 1,7% 1,8% 2,3% 2,8% 3,2%Jamaica s.d. s.d. 2,9% 2,9% 2,7% 2,9%Puerto Rico 1,3% 1,3% 1,3% 1,3% 1,4% 1,4%Dominican Republic 1,3% 1,4% 2,1% 2,2% 1,6% 2,2%Trinidad & Tobago 0,5% 0,8% 0,8% 1,0% 1,1% 1,1%The Caribbean 1,0% 1,1% 1,8% 1,9% 1,7% 1,9%Region Average 1,2% 1,3% 1,6% 1,9% 2,1% 2,4%Source : CEPAL (ECLAC) Statistical Organism and National Central Banks Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The Figure shows that the participation average is 2.4% by region, but in some countries this ratio exceeds the 3.0% like Guatemala, El Salvador, Costa Rica and Ecuador cases.

Among the countries that produce 86.0% of the region Gross Product (Brazil, Mexico, Argentina, Venezuela, Chile and Colombia), the Mobile Telephony participation rate is: 2.7% for Argentina and Colombia; 2.1% for Venezuela; and 1.9% for Brazil, Mexico and Chile.



ntributiiiioon to

2. Mobile Telephony Contribution to National Investment

2.1. Regional Investment Evolution

Figure 2.1.1. Region: Average Investment Percentage of GDP 2001-2006Investment % / GDP 2001 2002 2003 2004 2005 2006

Argentina 14,2% 12,0% 15,1% 19,2% 21,5% 20,3%Brazil 17,0% 16,4% 15,3% 16,1% 16,3% 16,2%Chile 20,7% 20,3% 20,1% 19,1% 20,6% 20,2%Colombia 13,6% 14,5% 16,5% 18,4% 20,8% 18,5%Ecuador 21,4% 23,3% 21,3% 21,6% 21,9% 21,9%Peru 18,6% 17,5% 17,8% 17,9% 18,8% 18,1%Uruguay 12,5% 10,1% 9,4% 11,3% 13,1% 13,1%Venezuela 24,1% 21,9% 15,5% 18,3% 20,2% 20,0%South America 17,8% 17,0% 16,4% 17,7% 19,2% 18,5%Costa Rica 18,3% 18,9% 19,2% 18,6% 19,0% 18,8%El Salvador 16,4% 16,6% 16,7% 15,6% 15,4% 16,1%Guatemala 18,3% 19,3% 18,7% 18,3% 18,3% 18,6%Panama 15,2% 13,6% 17,1% 16,6% 16,8% 15,8%Mexico 20,0% 19,3% 18,9% 19,6% 19,3% 19,4%Central America & Mexico 17,6% 17,5% 18,1% 17,8% 17,8% 17,8%Jamaica 29,1% 31,6% 29,7% 31,4% 29,8% 30,3%Puerto Rico 16,9% 15,9% 15,2% 15,1% 14,4% 14,1%Dominican Republic 18,9% 19,4% 15,5% 16,1% 13,1% 14,9%Trinidad & Tobago 19,4% 19,2% 18,6% 17,4% 16,5% 18,2%The Caribbean 21,1% 21,5% 19,7% 20,0% 18,5% 19,4%Region Average 18,6% 18,4% 17,8% 18,4% 18,6% 18,6%Source : CEPAL (ECLAC) Statistical Organism and National Central Banks Reports

The relationship between national Investment and Gross Domestic Product (GDP) is analyzed in this chapter; that is what percentage of GDP is destined by each one of the countries to invest in Capital expenditures (Productive Assets).

Practically, the relationship between Investment and GDP has not varied from 2001 to 2006; average levels of 18.6% have been maintained for the whole region.


Second Part:

2.2. Mobile Telephony Investment Evolution (CAPEX)

Figure 2.2.1. Region: Mobile Telephony Investment Evolution (CAPEX) 2001-2006


3.7063.245

4.423

5.628

8.962

9.868

0

2.000

4.000

6.000

8.000

10.000

12.000

2001 2002 2003 2004 2005 2006

US

$ M

illio

ns

CAPEX : Accum. '01 to '06.

US$ 35.833

Figure 2.2.2. Region: Mobile Telephony Investment (CAPEX) 2001-2006US $ Millions 2001 2002 2003 2004 2005 2006 Accum.

Argentina 424 114 48 366 439 533 1.923Brazil 870 989 1.219 1.926 3.380 3.983 12.366Chile 315 200 171 269 398 655 2.009Colombia 217 83 262 323 840 905 2.630Ecuador 27 40 78 130 231 232 738Peru 115 168 154 150 207 276 1.069Uruguay s.d. 59 33 47 43 64 247Venezuela 430 238 85 196 469 795 2.213South America 2.398 1.893 2.050 3.406 6.006 7.443 23.195Costa Rica 264 298 521 375 352 270 2.081El Salvador 54 27 20 54 70 123 348Guatemala s.d. s.d. 51 133 198 283 665Panama 24 19 21 36 49 45 193Mexico 743 759 1.341 1.205 1.791 1.224 7.063Central America & Mexico 1.085 1.104 1.955 1.803 2.460 1.944 10.351Jamaica s.d. s.d. 178 146 142 66 531Puerto Rico 171 185 165 182 248 256 1.207Dominican Republic 46 53 62 73 82 129 445Trinidad & Tobago 7 11 14 19 24 30 104The Caribbean 224 249 418 419 497 481 2.288Total 3.706 3.245 4.423 5.628 8.962 9.868 35.833Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The Mobile Telephony operators have invested US $35.833 million in Capital Expenditure (CAPEX) in the region over the last six years (2001-2006).

In 2006, approximated total Investments amounted to US $9.868 million while in 2001 were US $3.706 million. In only six years Annual investments were multiplied 2.7 times increasing US $6.162 million.

From the region’s total Investments in Mobile Telephony, investment in South America totalled US $23.195 million; in Central America and Mexico US $10.351 million; and in the Caribbean US $2.288 million.



ntributiiiioon to

Figure 2.2.3. Region: Investment/Mobile Telephony Sales vs. Investment/GDP Comparison relationship 2001-2006

Source : CEPAL (ECLAC) Statistical Organism and National Central Banks Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

18,6%18,4%

17,8%

18,4%18,6% 18,6%

24,0%23,7%

20,2%

22,6%

23,1%

19,0%

15,0%

16,0%

17,0%

18,0%

19,0%

20,0%

21,0%

22,0%

23,0%

24,0%

25,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %

Investment / GDP %CAPEX / Sales

In the � gure above it is observed the relationship between the Investment (CAPEX) as percentage of Mobile Telephony Total Sales, compared to the relationship of Investment as percentage of Gross Regional Product for 2001-2006 period.

On average, the Mobile Telephony industry has invested 22.1% of its Sales, while the region total has paid 18.4% of its Gross Product. The conclusion is that the Mobile Telephony investments are higher, in proportion, than those carried out by the rest of the national economies. This tendency is even more remarkable in the years 2001, 2003, 2004 and 2005.


Second Part:

Figure 2.2.4. Region: Average Investment Percentage over Mobile Telephony Sales 2001-2006CAPEX % / Sales 2001 2002 2003 2004 2005 2006 Average

Argentina 12,0% 10,0% 3,4% 14,2% 10,7% 9,3% 9,9%Brazil 17,1% 15,9% 16,0% 18,2% 22,3% 21,8% 18,5%Chile 31,6% 15,9% 11,9% 15,5% 20,8% 23,3% 19,8%Colombia 40,1% 11,4% 28,0% 19,8% 30,2% 24,6% 25,7%Ecuador 15,0% 17,1% 18,7% 20,0% 21,9% 19,2% 18,6%Peru 21,5% 26,9% 19,6% 16,5% 20,4% 21,1% 21,0%Uruguay s.d. 29,3% 25,0% 31,1% 23,5% 18,6% 25,5%Venezuela 24,6% 21,7% 7,8% 12,9% 17,4% 20,6% 17,5%South America 23,1% 18,5% 16,3% 18,5% 20,9% 19,8% 19,5%Costa Rica 67,0% 70,2% 108,2% 73,8% 62,3% 36,7% 69,7%El Salvador 27,8% 12,8% 8,0% 15,0% 13,6% 16,2% 15,6%Guatemala s.d. s.d. 15,8% 21,5% 18,2% 21,3% 19,2%Panama 13,0% 10,1% 9,7% 10,8% 12,3% 10,0% 11,0%Mexico 12,9% 10,9% 15,9% 11,1% 13,8% 7,7% 12,0%Central America & Mexico 30,2% 26,0% 31,5% 26,5% 24,0% 18,4% 26,1%Jamaica s.d. s.d. 73,5% 56,6% 53,3% 21,9% 51,3%Puerto Rico 19,4% 20,7% 17,6% 17,6% 21,7% 20,8% 19,6%Dominican Republic 15,0% 15,0% 15,0% 15,0% 15,0% 15,0% 15,0%Trinidad & Tobago 15,0% 15,0% 15,0% 15,0% 15,0% 15,0% 15,0%The Caribbean 16,5% 16,9% 30,3% 26,1% 26,2% 18,2% 22,4%Region Average 23,7% 20,2% 24,0% 22,6% 23,1% 19,0% 22,1%Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The regional average of Investment in relation with Sales in the 2001-2006 period is about 22.1%, but variations exist among zones: South America applied 19.5% of its Sales; Central America and Mexico destined 26.1%; and the Caribbean dedicated 22.4%.

The countries level analysis is quite attractive, since an important dispersion exists regarding the ratio. This is explained depending on the industry’s development moment in each country, as well as geographic and social factors, as size and population density.

Costa Rica is the leader in this industry; only one Mobile Telephony company of state property exists. This country has dedicated 69.7% of its last six years Sales to carry out investments.

Costa Rica is followed by Jamaica in level of investment; 51.3% of its sales have been destined to investment contrary to Costa Rica case, since the government deregulated the industry incorporating new players.



ntributiiiioon to

3. In� ation vs. Mobile Telephony ARPU Evolution

3.1. Evolution of CPI

Figure 3.1.1. Region: Average Variation Rate of Consumer Price Index 2001-2006Annual Variation % 2002 2003 2004 2005 2006 '06 vs. '01

Argentina 25,9% 13,4% 4,4% 9,7% 10,9% 81,3%Brazil 9,9% 8,2% 6,6% 5,1% 2,8% 36,8%Chile 2,8% 1,1% 2,4% 3,7% 2,6% 13,2%Colombia 7,0% 6,5% 5,5% 4,9% 4,5% 31,7%Ecuador 9,4% 6,1% 1,9% 3,5% 2,9% 25,9%Peru 1,5% 2,5% 3,5% 1,5% 1,1% 10,5%Uruguay 14,0% 19,4% 9,2% 4,7% 6,4% 65,4%Venezuela 31,2% 27,1% 19,2% 14,4% 17,0% 165,8%South America 12,7% 10,5% 6,6% 5,9% 6,0% 53,8%Costa Rica 9,7% 9,9% 13,1% 14,1% 6,3% 65,3%El Salvador 2,8% 2,5% 5,4% 4,3% 4,9% 21,4%Guatemala 6,3% 5,9% 9,2% 8,6% 5,8% 41,2%Panama s.d. 0,1% 0,4% 2,9% 3,5% 7,0%Mexico 5,7% 4,0% 5,2% 3,3% 4,1% 24,3%Central America & Mexico 6,1% 4,5% 6,7% 6,6% 4,9% 31,8%Jamaica 7,3% 14,1% 13,7% 12,9% 5,8% 66,2%Puerto Rico 6,1% 7,9% 11,9% 13,8% 14,7% 67,2%Dominican Republic 5,2% 27,4% 51,5% 4,2% 7,6% 127,7%Trinidad & Tobago 4,2% 3,8% 3,7% 6,8% 8,3% 20,0%The Caribbean 5,7% 13,3% 20,2% 9,4% 9,1% 70,3%Region Average 9,3% 9,4% 9,8% 6,9% 6,4% 51,2%Source : CEPAL (ECLAC) Statistical Organism and National Central Banks

The simple accumulated average In� ation for the region in the period 2001-2006 has been of 51.2%. In the � rst three years under analysis, annual rates higher than 9% are observed while in the last two years these rates decreased locating between 6% and 7%.

The South America average of In� ation is very similar to the regional average, with a rate of 53.8%. Central America and Mexico collaborate with a rate much lower than the average (31.8%), but the Caribbean observes a higher rate (70.3%).

Regarding analysis by country, Venezuela confronted the most severe in� ationary process in the region with an accumulated rate of 165.8% in the � ve considered years. In the Caribbean, the Dominican Republic experienced a 127.7% accumulated variation of its prices. In the third place is Argentina that as consequence of the strong devaluation of its currency at the beginning of 2002 it carried out a prices readjustment that takes it to a general increment of 81.3%.

Panama is among the countries that less in� ation registered showing an accumulated rate of only 7%. Then, Peru and Chile cases are observed maintaining very moderate price increases of 10.5% and 13.2% respectively in the � ve years total.


Second Part:

3.2. Mobile Telephony ARPU Evolution

Figure 3.2.1. Region: Average Variation Rate of Mobile Telephony ARPU 2001-2006Variación Anual % 2002 2003 2004 2005 2006 Accum.Var.

Argentina -67,8% 18,8% 13,0% -4,7% -13,3% -64,3%Brazil -25,2% 0,2% -4,6% 1,0% 7,6% -22,3%Chile -11,7% -4,4% -4,8% 3,8% 16,7% -2,7%Colombia -7,4% -21,4% -7,4% -1,4% -1,9% -34,8%Ecuador -10,2% -7,2% -8,0% -5,1% -18,6% -40,8%Peru 1,5% 2,5% 3,5% 1,5% 1,1% 10,5%Uruguay -11,3% 10,7% 8,9% -7,1% 0,0% -0,7%Venezuela -23,6% -16,0% 30,2% -7,5% -20,2% -38,3%South America -19,5% -2,1% 3,9% -2,4% -3,6% -24,2%Costa Rica -4,4% -28,1% -23,1% 0,8% 0,0% -46,7%El Salvador 1 s.d. s.d. -25,7% 2,0% -1,0% -25,0%Guatemala 2 s.d. s.d. s.d. -6,6% 3,2% -3,7%Panama 3 s.d. -6,9% -5,2% -21,3% -14,3% -40,4%Mexico 3 s.d. 2,0% 1,6% 0,4% 0,4% 4,4%Central America & Mexico -4,4% -11,0% -13,1% -4,9% -2,3% -22,3%Jamaica 4 -4,4% 18,6% -14,3% 0,0% s.d. -2,8%Puerto Rico -0,7% 0,9% 2,6% 1,7% 0,4% 4,8%Dominican Republic 5 s.d. s.d. s.d. s.d. s.d. s.d.Trinidad & Tobago -6,3% -12,1% 0,0% -19,7% -12,6% -42,2%The Caribbean -3,8% 2,5% -3,9% -6,0% -6,1% -13,4%Region Average -14,3% -3,0% -2,2% -3,9% -3,5% -21,6%(1) El Salvador’s accumulated variation corresponds to '06 vs. '03 period(2) Guatemala’s accumulated variation corresponds to '06 vs. '04 period(3) Panama’s and Mexico’s accumulated variation correspond to '06 vs. '02 period(4) Jamaica’s accumulated variation corresponds to '05 vs.'01 period(5) There is no prices information from Dominican RepublicThe accumulated variation from the rest of the countries corresponds to '06 vs.'01 period.Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The accumulated variation rate of Mobile Telephony average revenues per user (ARPU) for the region in the 2001-2006 period has been negative, 21.6%. The higher decrease is observed at the beginning of the period with a de� ationary rate of 14.3%, but it remains negative under the whole period of analysis.

The Latin America decrease average is even higher than the regional rate registering 24.2%. On the other hand, Central America and Mexico show a negative rate of 22.3%, while the Caribbean also observes a negative rate of 13.4%.

Regarding analysis by country, the most striking case was Argentina whose devaluation in 2002 caused a price decrease of 67.8%, tendency that could not be reverted in the following years, despite the currency partial revaluation and growth closing the period with an average decrease rate of 64.3%. Then, Trinidad & Tobago, Ecuador, Costa Rica, Panama and Venezuela show negative rates close to 40%.

Puerto Rico and Mexico are among the countries that were able to maintain their prices average revenues per user that even showed an increment over the 4%. While, Uruguay, Jamaica and Chile observed very slightly decreases.



ntributiiiioon to

Figure 3.2.2. Region: Accumulated Average Variation Rate of Mobile Telephony ARPU and CPI 2001-2006

Note: El Salvador’s accumulated variation of Mobile Telephony Price corresponds to '06 vs. '03 periodGuatemala’s corresponds to '06 vs. '04 period; Panama’s and Mexico’s corresponds to '06 vs. '02 periodJamaica’s corresponds to '05 vs. '01 period. the rest of the countries corresponds to '06 vs. '01 period.Source : CEPAL (ECLAC) Statistical Organism and National Central Banks, Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

-170,0%

-120,0%

-70,0%

-20,0%

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80,0%

130,0%

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'06

vs. '

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Mobile Telephony Var.: - 21,6%

CPI Var.: + 51,2%

As it was previously observed, most of the region’s countries have tolerated signi� cant in� ation levels in their deteriorated economies. Meanwhile, the strong competition that the Mobile Telephony industry has shown among operators in the last years has resulted in a constant decrease of average revenues per user.

From the combination between the variation rate of CPI (in� ationary) and the variation rate of the Mobile Telephony ARPU (de� ationary in most of the countries) the countries that worst combination has observed are those in the � gure above: Mobile Telephony in Venezuela faced an accumulated in� ation of 165.8%, while its Prices decreased to 38.3%. On the other hand, Argentina observed an in� ation of 81.3% in the same period in which Mobile Telephony decreased to 64.3%.


Second Part:

Figure 3.2.3. Region: Average Annual Variation Rate of CPI and Mobile Telephony ARPU 2001-2006

Source : CEPAL (ECLAC) Statistical Organism and National Central Banks, Reports and Balances of Companies,Regulatory Organisms and Convergencia Research estimations

-14,3%

-3,5%-3,9%-3,0% -2,2%

9,3% 9,4% 9,8%

6,9% 6,4%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

% PCI Accum. Var. : + 51,2%

Mobile Telephony Accumulated. Var.: - 21,6%

The comparison shows the simple average annual evolution of CPI in the region and the simple average Prices variation of Mobile Telephony. The major gap is observed in 2002, when the CPI registered 9.3% while Mobile Telephony registered a de� ation of 14.3%. Although, this situation declined, it did not revert in the later years.

4. Mobile Telephony Contribution to Employment

4.1. Direct employment in the Mobile Telephony Industry Figure 4.1.1. Region: Direct employment generated by Mobile Telephony 2006


30.075

8.1315.466 4.779

2.130710 435 278 190

31.849

9.518

1.032

1.4732.1353.371

4.956

746

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

Bra

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Total Staff Directly Employed: 107.274

At the end of 2006, approximately 107,274 people were Directly employed by the Mobile Telephony companies of the region under analysis.



ntributiiiioon to

Brazil and Mexico, as a whole, generated 61,924 job positions representing 57.7% of direct employment in mobile services of the region. These two countries plus Argentina, Venezuela, Colombia, Costa Rica and Chile conformed 88.3% of the total.

4.2. Indirect Employment generated by the Mobile Telephony Industry

Figure 4.2.1. Region: Indirect Employment generated by Mobile Telephony 2006

Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and its providers

57.406

27.76016.548

4.800 1.561836

3.3302.718

21.630

137.900

41.290

4.405

4.8009.25510.430

21.360

3.978

0

20.000

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Bra

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Indi

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Em

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ed Total Employment generated in the 1st. link of the Mobile Telephony Value Chain

Indirectly Employed:

370.007

According to that exposed in the � rst part of the study, where the theoretical sustenance is presented, the main goods and services demanded by the Mobile Telephony industry have been identi� ed. A thorough assessment will be carrying out to estimate the Employment generated by the industry in the � rst link of its Value Chain (Indirect Employment).

It has been concluded that the region’s Mobile Telephony has generated Indirect Employment for approximately 370,007 job positions in 2006.

The country where more employment has been generated is Brazil through the � rst link of its Value Chain, contributing approximately 137,900 job positions which represent 37.3% of the region’s total. Brazil, together with Mexico, Colombia, Argentina, Venezuela and Guatemala generated 83.1% of the region’s Indirect Employment.


Second Part:

Figure 4.2.2. Region: Indirect Employment generated by Mobile Telephony in the � rst link of its Value Chain 2006Providers of # %

Sales Team (Sales Agents) 231.798 62,6%Sites Installers 37.200 10,1%Terminal Equipments 27.963 7,6%Maintenance and Repairs 23.030 6,2%Radiobase Network + Troncal Network + Equipments 19.315 5,2%Mobile Contents (SVA) 9.775 2,6%Terminals Logistic 7.070 1,9%IT Systems 6.198 1,7%Others 4.102 1,1%Towers 2.800 0,8%Electrical Feeding 756 0,2%Indirect Employment Total 370.007 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and and its providers

From the employment total generated by Mobile Telephony through the � rst link of its Value Chain, 62.6% is destined to an outsourcing Sales Team, that is to say, the sale agents. It is also important the employment level generated among the Site Installers, Maintenance and Repairs and the production of Terminal Equipments; that as a whole represent 24% of the total.

It is important to point out that Brazil and Mexico are the only producers and exporters of Terminal Equipments in Latin America and the Caribbean. This industry possesses a great value added and a rich Value Chain that arises as consequence of the same one.

4.3. Total Employment generated by the Mobile Telephony Industry

Figure 4.3.1. Region: Total Employment (Direct + Indirect) generated by Mobile Telephony 2006

Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations and Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and and itsproviders

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

Bra

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Total Employment generated by Mobile

Telephony

477.281

Mobile Telephony has generated Employment to approximately 477,281 people in the region; 22.5% Directly employed by Mobile Operators under a dependency relationship, while the 77.5 % remaining works in companies that provide goods and services in the � rst link of the Value Chain.



ntributiiiioon to

An interesting metric unit arises from comparing how much employment the Mobile Telephony generates in its Value Chain for each person that is directly employed by the Operators. It is conclude that for each employee directly employed by Mobile Telephony, 3.5 people are indirectly demanded through the � rst link of its Value Chain.

5. Mobile Telephony Contribution to Connectivity

5.1. Telecommunications Evolution (Mobile, Fixed and Internet)

Figure 5.1.1. Region: Number of Mobile, Fixed Lines and Internet Connections Evolution 2001-2006

Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research

97.596121.174

167.796

231.501

293.551

81.718

0

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At the end of 2006, the region possessed a total of 293.6 million of mobile lines while only 81.8 million existed by the end of 2001. In only � ve years, Mobile Telephony multiplied by 3.6 times the number of connections. This means that 211.8 million people have been incorporated as mobile telephony users.

On the other hand, � xed lines total was 38.8 million in 2006. In the period under analysis, signi� cant growth variations are not observed.

Lastly, Internet Connections total was 18.1 million in 2006. An important growth is veri� ed in the period under study, since in 2001 only 5.8 million connections existed.


Second Part:

Figure 5.1.2. Region: Average Annual Variation Rate Number of Mobile, Fixed Lines and Internet Connections 2001-2006


0,0%

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Ann

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%

Mobile Var. '06 vs. '01

369,2%

Internet Var. '06 vs. '01

278,1%Fixed Var. '06 vs. '01

24,0%

The growth rate of Mobile Telephony users in 2001 - 2006 period has been 369.2%. Much higher than Fixed Telephony growth of 24.0%. Internet has also shown a very important growth registering a rate of 278. 1%.

Figure 5.1.3. Region: Number of Mobile, Fixed Lines and Internet Connections Average Penetration 2001-2006


17,2% 21,6%26,1%

34,3%

46,5%

61,0%

17,8%

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2001 2002 2003 2004 2005 2006

Pene

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%

Mobile LinesFixed Lines

Internet Connections

The Mobile Telephony is the communication service that most contributes to National Connectivity in Latin America’s countries. By the end of 2006 it reached penetration levels of 61% considering the whole region. In only � ve years, the Mobile Telephony varied its penetration level from 17.2% in 2001 to 61.0% in 2006.Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during the whole period closing 2006 with a penetration of 17.8 %, while in 2001 it was of 16.2%.Although Internet Connections have been increased, there still a long way to go. Closing 2006 its penetration level was of 4.0%.



ntributiiiioon to

5.2. Number of Mobile Lines EvolutionFigure 5.2.1. Region: Number of Mobile Lines Evolution 2001-2006


81.71897.596

121.174

167.796

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293.551

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Figure 5.2.2. Region: Number of Mobile Lines 2001-2006Thousands # 2001 2002 2003 2004 2005 2006

Argentina 6.742 6.567 7.842 13.512 22.156 31.510Brazil 28.746 34.881 46.373 65.605 86.210 99.919Chile 5.101 6.244 7.268 9.261 10.570 12.451Colombia 3.265 4.597 6.186 10.401 21.893 29.763Ecuador 859 1.561 2.394 3.437 6.246 8.485Peru 1.793 2.307 2.930 4.093 5.583 8.772Uruguay 520 514 498 600 1.155 2.330Venezuela 6.473 6.542 7.015 8.421 12.496 18.789South America 53.499 63.213 80.507 115.330 166.309 212.020Costa Rica 311 460 756 912 927 1.465El Salvador 858 889 1.150 1.833 2.412 3.852Guatemala 1.146 1.577 2.035 3.168 4.510 7.179Panama 475 526 692 1.260 1.749 2.174Mexico 21.758 25.928 30.098 38.451 47.129 57.016Central America & Mexico 24.549 29.380 34.732 45.623 56.727 71.686Jamaica 680 1.400 1.800 2.006 2.084 2.147Puerto Rico 1.561 1.620 1.646 1.772 1.833 1.938Dominican Republic 1.270 1.701 2.123 2.534 3.623 4.606Trinidad & Tobago 160 284 366 530 924 1.155The Caribbean 3.671 5.004 5.935 6.843 8.465 9.846Total Region 81.718 97.596 121.174 167.796 231.501 293.551Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research

From the 293.5 million total of mobile lines in the region, South America contributed with 212 million, Central America and Mexico with 71.7 million and the Caribbean with 9.8 million.Regarding analysis by country, Brazil was the one that possessed more lines, 99.9 million, 34.0% of the total at the end of 2006. Mexico represented 19.4% of the total with its 57 million lines. Argentina, counted 31.5 million subscribers representing 10.7%. Colombia, 29.8 million representing 10.1%. Venezuela, 18.9 million lines representing 6.4%. In the sixth place is Chile, that registered 12.4 million of active mobiles that represented 4.2% of the total. The 85% of the total region’s lines is concentrated among the six countries mentioned.


Second Part:

Figure 5.2.3. Region: Accumulated Average Variation Rate Number of Mobile Lines 2001-2006


887,6%

144,1%

24,2%

622,0%

526,2%

811,6%

369,2%

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Figure 5.2.4. Region: Average Annual Variation Rate Number of Mobile Lines 2001-2006Annual Variation % 2002 2003 2004 2005 2006 '06 vs. '01

Argentina -2,6% 19,4% 72,3% 64,0% 42,2% 367,4%Brazil 21,3% 32,9% 41,5% 31,4% 15,9% 247,6%Chile 22,4% 16,4% 27,4% 14,1% 17,8% 144,1%Colombia 40,8% 34,6% 68,1% 110,5% 35,9% 811,6%Ecuador 81,7% 53,4% 43,5% 81,7% 35,8% 887,6%Peru 28,6% 27,0% 39,7% 36,4% 57,1% 389,2%Uruguay -1,2% -3,1% 20,5% 92,5% 101,7% 348,1%Venezuela 1,1% 7,2% 20,0% 48,4% 50,4% 190,3%South America 24,0% 23,5% 41,6% 59,9% 44,6% 423,2%Costa Rica 47,7% 64,5% 20,5% 1,7% 58,0% 370,6%El Salvador 3,6% 29,4% 59,3% 31,6% 59,7% 349,0%Guatemala 37,6% 29,0% 55,7% 42,4% 59,2% 526,2%Panama 10,7% 31,7% 82,0% 38,8% 24,3% 357,6%Mexico 19,2% 16,1% 27,8% 22,6% 21,0% 162,0%Central America & Mexico 23,7% 34,1% 49,1% 27,4% 44,4% 353,1%Jamaica 105,9% 28,6% 11,4% 3,9% 3,0% 215,7%Puerto Rico 3,8% 1,6% 7,6% 3,4% 5,7% 24,2%Dominican Republic 33,9% 24,8% 19,4% 43,0% 27,1% 262,6%Trinidad & Tobago 77,4% 28,9% 44,9% 74,2% 25,0% 622,0%The Caribbean 55,2% 21,0% 20,8% 31,1% 15,2% 281,1%Region Average 31,3% 26,0% 38,9% 43,6% 37,6% 369,2%Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The simple average of accumulated growth of Mobile Telephony number of lines in the region in the 2001-2006 period has been outstanding, registering a rate of 369.2%.

Important variations are observed regarding the growth among the different areas and even countries: South America generated the highest region’s increment rate with a 423.2% registration; while Central America and Mexico increased 353.1% and the Caribbean 281.1%.



ntributiiiioon to

Figure 5.2.5. Region: Accumulated Variation Ranking of Mobile Lines Number 2001-2006Accumulated Variation % '06 vs. '01

Ecuador 887,6%Colombia 811,6%Trinidad & Tobago 622,0%Guatemala 526,2%Peru 389,2%Costa Rica 370,6%6 Countries average 601,2%Region Average 369,2%Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

Some countries have generated even more amazing growths. For example Ecuador and Colombia very above the average with rates of 887.6% and 811.6% respectively; rates that duplicate the region’s average.

Chile is found among the countries that less growth presented with a 144.1% rate. Anyways, it is important to consider that in 2001 this country possessed a very important Mobile Telephony development presenting the second highest penetration rate of the region (32.8%) in that time. Puerto Rico’s case has been different presenting a growth of only 24.2%. In 2001 this country presented a penetration of 40.7% and by the end of 2006 it was increased to 49.3% only.

Figure 5.2.6. Region: Mobile Lines Penetration 2006


61,0%65,4%69,6%

75,8%80,9%

52,6%54,2%

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06


Second Part:

Figure 5.2.7. Region: Mobile Lines Penetration Evolution 2001-2006Penetration % 2001 2002 2003 2004 2005 2006

Argentina 18,1% 17,5% 20,7% 35,3% 57,4% 80,9%Brazil 16,2% 19,4% 25,4% 35,5% 46,0% 52,6%Chile 32,8% 39,7% 45,7% 57,5% 65,0% 75,8%Colombia 7,7% 10,7% 14,2% 23,5% 48,8% 65,4%Ecuador 6,9% 12,3% 18,6% 26,4% 47,3% 63,3%Peru 6,9% 8,8% 11,0% 15,2% 20,5% 31,8%Uruguay 15,7% 15,5% 15,0% 18,1% 34,8% 70,1%Venezuela 26,2% 26,0% 27,3% 32,3% 47,1% 69,6%South America 16,3% 18,7% 22,2% 30,5% 45,8% 63,7%Costa Rica 7,8% 11,2% 18,1% 21,5% 21,5% 33,3%El Salvador 13,4% 13,6% 17,3% 27,1% 35,1% 55,1%Guatemala 10,0% 13,4% 16,8% 25,6% 35,5% 55,1%Panama 15,8% 17,2% 22,2% 39,7% 54,2% 66,2%Mexico 21,6% 25,5% 29,4% 37,2% 45,2% 54,2%Central America & Mexico 13,7% 16,2% 20,8% 30,2% 38,3% 52,8%Jamaica 26,1% 53,3% 68,0% 75,3% 77,7% 79,5%Puerto Rico 40,7% 42,0% 42,4% 45,5% 46,9% 49,3%Dominican Republic 14,3% 18,8% 23,1% 27,2% 38,3% 47,9%Trinidad & Tobago 12,3% 21,7% 27,8% 40,2% 69,8% 87,0%The Caribbean 23,3% 33,9% 40,4% 47,0% 58,2% 65,9%Region Average 17,2% 21,6% 26,1% 34,3% 46,5% 61,0%Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The average penetration of Mobile Telephony in the region is 61.0%.

South America closed 2006 with a simple average penetration level of 63.7%. Central America and Mexico with 52.8% and the Caribbean with 65. 9%.

Among the region’s countries with higher number of mobile lines, Argentina possesses the highest penetration percentage with a rate of 80.9% (20.9 percentage points over the regional average); on the other hand, Chile counts with 75.8%, Venezuela with 69.6% and Colombia with 65.4%. That is to say, among the main six countries with higher lines’ number, four of these overcome the regional average. Brazil and Mexico that on the whole represent 53.4% of the region’s lines have penetration levels of 52.6% and 54.2% respectively, ratios below the regional average.

The Mobile Telephony growth has been amazing and explosive, incorporating connectivity to population’s sectors before excluded. But, still a regional average penetration rate is observed which is below other world regions, as Asia and Europe; therefore, important growth possibilities still exist.



ntributiiiioon to

5.3. Number of Fixed Lines Evolution

Figure 5.3.1. Region: Number of Fixed Lines Evolution 2001-2006


81.890

84.523

87.085

90.646

93.60294.578

74.000

76.000

78.000

80.000

82.000

84.000

86.000

88.000

90.000

92.000

94.000

96.000

2001 2002 2003 2004 2005 2006

Thou

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es

Figure 5.3.2. Region: Number of Fixed Lines 2001-2006Thousands # 2001 2002 2003 2004 2005 2006

Argentina 8.870 8.402 8.448 8.775 9.207 9.540Brazil 37.431 38.800 39.200 39.600 39.800 38.800Chile 3.478 3.467 3.252 3.318 3.436 3.436Colombia 7.372 7.517 7.850 7.767 7.664 7.961Ecuador 1.336 1.426 1.549 1.612 1.701 1.775Peru 1.571 1.657 1.839 2.050 2.251 2.401Uruguay 951 947 938 962 1.006 987Venezuela 2.705 2.842 2.956 3.346 3.651 4.217South America 63.715 65.058 66.032 67.430 68.716 69.117Costa Rica 820 872 917 944 985 1.047El Salvador 650 668 753 888 971 1.036Guatemala 756 846 944 1.132 1.248 1.355Panama 382 387 382 410 460 433Mexico 13.774 14.975 16.330 18.073 19.512 19.861Central America & Mexico 16.382 17.748 19.325 21.447 23.177 23.732Jamaica 530 490 500 510 490 490Dominican Republic 955 909 909 936 896 897Trinidad & Tobago 308 319 319 322 324 343The Caribbean 1.793 1.718 1.728 1.768 1.710 1.730Region Total 81.890 84.523 87.085 90.646 93.602 94.578Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The number of � xed lines has also regionally evolved, although in a smaller number than Mobile Telephony. In 2001, the region had 81.9 million lines, while in 2006, this number had increased to 94.6 million lines. In � ve years, 12.7 million of new lines were incorporated.

Closing 2006, from the total of 94.6 million lines, South America contributed with 69.2 million, while Central America and Mexico with 23.7 million and the Caribbean with 1.7 million � xed phone connections.


Second Part:

The countries that had most number of lines at the end of 2006 were Brazil, with approximately 38.8 million and Mexico with 19.9 million. Together, both have 62% of the region’s � xed lines total. The third country with higher number of � xed lines is Argentina that had 9.5 million at the end of 2006. Colombia, Venezuela and Chile close the group of six countries that together sum 88.6% of the region’s Fixed Telephony.

Figure 5.3.3. Region: Accumulated Average Variation Rate Number of Fixed Lines 2001-2006


79,2%

59,4%55,9%

52,8%

44,2%

32,9%27,6%

13,4% 11,3%8,0% 7,5%

3,8% 3,7%

24,0%

-1,2% -7,5%-6,1%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

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6 vs

. '01

Figure 5.3.4. Region: Annual Average Variation Rate Number of Fixed Lines 2001-2006Variación Anual % 2002 2003 2004 2005 2006 '06 vs. '01

Argentina -5,3% 0,5% 3,9% 4,9% 3,6% 7,5%Brazil 3,7% 1,0% 1,0% 0,5% -2,5% 3,7%Chile -0,3% -6,2% 2,0% 3,5% 0,0% -1,2%Colombia 2,0% 4,4% -1,1% -1,3% 3,9% 8,0%Ecuador 6,8% 8,6% 4,1% 5,5% 4,3% 32,9%Peru 5,5% 11,0% 11,5% 9,8% 6,6% 52,8%Uruguay -0,4% -1,0% 2,6% 4,6% -1,9% 3,8%Venezuela 5,1% 4,0% 13,2% 9,1% 15,5% 55,9%South America 2,1% 2,8% 4,6% 4,6% 3,7% 20,4%Costa Rica 6,3% 5,2% 2,9% 4,4% 6,3% 27,6%El Salvador 2,7% 12,7% 18,0% 9,4% 6,6% 59,4%Guatemala 11,9% 11,6% 19,9% 10,2% 8,6% 79,2%Panama 1,3% -1,4% 7,5% 12,2% -5,9% 13,4%Mexico 8,7% 9,0% 10,7% 8,0% 1,8% 44,2%Central America & Mexico 6,2% 7,4% 11,8% 8,8% 3,5% 44,8%Jamaica -7,5% 2,0% 2,0% -3,9% 0,0% -7,5%Dominican Republic -4,8% 0,0% 3,0% -4,3% 0,1% -6,1%Trinidad & Tobago 3,4% 0,0% 1,1% 0,4% 6,1% 11,3%The Caribbean -3,0% 0,7% 2,0% -2,6% 2,0% -0,8%Average Region 2,4% 3,9% 6,4% 4,6% 3,3% 24,0%Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

On simple average, the region increased to 24% its number of � xed lines. The con� rmed growth is signi� cant, but clearly very below regarding the Mobile Telephony evolution.



ntributiiiioon to

From the analysis by zone it is followed that dispersion regarding regional average is very important. South America presented a 20.4% growth, while Central America and Mexico had a 44.8% growth. Lastly, the Caribbean registered a rate of accumulated variation practically neutral.

With countries like Guatemala, El Salvador, Venezuela and Peru, interesting situations have been given; these countries have grown more than 50% in � ve years. Mexico, the second region’s country regarding � xed lines (as likewise mobile) has registered a very signi� cant growth of 44.2%.

Other countries that already had interesting development levels in 2001, as Argentina, Uruguay, Colombia and Chile have grown at rates very below the average. Chile, even moved back 1.2 percentage points.

Figure 5.3.5. Region: Fixed Lines Penetration 2006


29,7%

25,8%24,5% 23,8%

20,9% 20,4%18,9% 18,2% 17,5%

15,6% 14,8%13,2% 13,2%

10,4%9,3% 8,7%

17,8%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

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Second Part:

Figure 5.3.6. Region: Fixed Lines Penetration 2001-2006Penetration % 2001 2002 2003 2004 2005 2006

Argentina 23,9% 22,4% 22,3% 23,0% 23,9% 24,5%Brazil 21,1% 21,6% 21,5% 21,4% 21,2% 20,4%Chile 22,3% 22,0% 20,4% 20,6% 21,1% 20,9%Colombia 17,4% 17,5% 18,0% 17,5% 17,1% 17,5%Ecuador 10,7% 11,3% 12,1% 12,4% 12,9% 13,2%Peru 6,0% 6,3% 6,9% 7,6% 8,3% 8,7%Uruguay 28,6% 28,5% 28,3% 29,0% 30,3% 29,7%Venezuela 10,9% 11,3% 11,5% 12,8% 13,7% 15,6%South America 17,6% 17,6% 17,6% 18,0% 18,6% 18,8%Costa Rica 20,5% 21,3% 22,0% 22,2% 22,8% 23,8%El Salvador 10,2% 10,2% 11,3% 13,1% 14,1% 14,8%Guatemala 6,6% 7,2% 7,8% 9,1% 9,8% 10,4%Panama 12,7% 12,6% 12,2% 12,9% 14,3% 13,2%Mexico 13,7% 14,7% 15,9% 17,5% 18,7% 18,9%Central America & Mexico 12,7% 13,2% 13,9% 15,0% 15,9% 16,2%Jamaica 20,3% 18,6% 18,9% 19,1% 18,3% 18,2%Dominican Republic 10,7% 10,1% 9,9% 10,0% 9,5% 9,3%Trinidad & Tobago 23,6% 24,3% 24,3% 24,4% 24,4% 25,8%The Caribbean 18,2% 17,7% 17,7% 17,9% 17,4% 17,8%Average Region 16,2% 16,3% 16,5% 17,1% 17,5% 17,8%Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The simple average penetration of the region’s Fixed Telephony was of 17.8% closing 2006. Only six countries in the region; Uruguay, Trinidad & Tobago, Argentina, Costa Rica, Chile and Brazil have penetration levels higher to 20%.On the other hand, only two countries, the Dominican Republic and Peru, have penetration levels lower than 10%.

5.4. Internet Connections Number Evolution

Figure 5.4.1. Region: Internet Connections Number Evolution 2001-2006


5.7976.453

7.930

10.483

18.085

14.126

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Inte

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Con

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ions



ntributiiiioon to

Figure 5.4.2. Region: Internet Connections Number 2001-2006Thousands # 2001 2002 2003 2004 2005 2006

Argentina 1.545 1.468 1.629 1.876 2.223 2.505Brazil 1 569 654 1.119 2.280 3.923 5.656Chile 698 758 836 805 906 944Colombia 262 351 461 501 688 888Ecuador 86 101 159 192 207 823Peru 202 385 556 673 833 1.029Uruguay s.d. s.d. s.d. s.d. 187 210Venezuela 305 316 323 459 637 761South America 3.666 4.032 5.082 6.787 9.604 12.816Costa Rica 29 42 64 82 90 s.d.El Salvador 71 95 113 117 127 185Guatemala 1 s.d. s.d. s.d. 46 62 75Panama 49 58 69 79 82 87Mexico 1.884 2.096 2.444 3.191 3.934 4.641Central America & Mexico 2.032 2.291 2.691 3.516 4.295 4.988Dominican Republic 64 83 96 106 135 184Trinidad & Tobago 35 48 61 74 92 98The Caribbean 99 130 157 181 226 282Region Total 5.797 6.453 7.930 10.483 14.126 18.085(1) It is only correspond to Broadband Internet ConnectionsSource : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The number of Internet Connections has signi� cantly evolved in the region. In 2001, the region had 5.8 million connections while in 2006 this number had increased to 18.1 million lines. In only � ve years, 12.3 million of new clients were incorporated.Closing 2006, from the total of 18.1 million connections, South America contributed with 12.8 million, while Central America and Mexico with 4.9 million and the Caribbean with 282 thousand lines.The same as in Mobile and Fixed Telephony, the highest number of Internet Connections is concentrated between Brazil and Mexico.

Figure 5.4.3. Region: Accumulated Average Variation Rate Number of Internet Connections 2001-2006

(1) Costa Rica’s accumulated variation corresponds to the period '05 vs. '01Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

894,0%861,7%

408,9%

238,8%212,5%

185,6% 180,7% 161,3% 149,6% 146,4%

78,1% 62,2%35,3%

278,1%

0,0%

100,0%

200,0%

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500,0%

600,0%

700,0%

800,0%

900,0%

1000,0%

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'06

vs.

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Second Part:

Figure 5.4.4. Region: Average Annual Variation Rate Number of Internet Connections 2001-2006Annual Variation % 2002 2003 2004 2005 2006 '06 vs. '01

Argentina -5,0% 11,0% 15,2% 18,5% 12,7% 62,2%Brazil 14,9% 71,1% 103,8% 72,1% 44,2% 894,0%Chile 8,5% 10,3% -3,7% 12,5% 4,2% 35,3%Colombia 34,0% 31,3% 8,7% 37,2% 29,1% 238,8%Ecuador 17,6% 57,5% 21,0% 8,0% 297,3% 861,7%Peru 90,3% 44,6% 21,0% 23,9% 23,5% 408,9%Uruguay s.d. s.d. s.d. s.d. 12,3% s.d.Venezuela 3,5% 2,2% 42,5% 38,6% 19,5% 149,6%South Americsa 23,4% 32,6% 29,8% 30,1% 55,3% 378,6%Costa Rica 1 46,4% 53,3% 27,5% 9,2% s.d. 212,5%El Salvador 33,9% 18,9% 4,4% 8,4% 45,0% 161,3%Guatemala s.d. s.d. s.d. 33,9% 21,5% s.d.Panama 19,4% 19,4% 13,6% 4,9% 4,9% 78,1%Mexico 11,3% 16,6% 30,6% 23,3% 18,0% 146,4%Central America & Mexico 27,7% 27,0% 19,0% 16,0% 22,3% 149,6%Dominican Republic 28,2% 16,8% 10,3% 26,6% 36,7% 185,6%Trinidad & Tobago 37,2% 27,1% 22,1% 23,6% 6,6% 180,7%The Caribbean 32,7% 22,0% 16,2% 25,1% 21,6% 183,1%Region Average 26,2% 29,2% 24,4% 24,3% 41,1% 278,1%(1) Costa Rica’s accumulated variation corresponds to the period '05 vs. '01Source : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

On simple average, the region has increased its number from Internet Connections to 278.1%. The con� rmed growth is very signi� cant, but the industry still has a long way to go.From the analysis by zone it is followed that variation’s dispersion is very signi� cant. South America presented a 378.6% growth, while Central America and Mexico had a 149.6% growth. Lastly, the Caribbean registered a rate of accumulated variation of 183.1%.

Figure 5.4.5. Region: Internet Connections Penetration 2006

(1) It corresponds to the penetration % 2005(2) It only corresponds to Broadband Internet ConnectionsSource : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

2,0%2,8%

3,0%

4,4%4,0%

5,7%6,4%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

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ntributiiiioon to

Figure 5.4.6. Region: Internet Connections Penetration 2001-2006Penetration % 2001 2002 2003 2004 2005 2006

Argentina 4,2% 3,9% 4,3% 4,9% 5,8% 6,4%Brazil 1 0,3% 0,4% 0,6% 1,2% 2,1% 3,0%Chile 4,5% 4,8% 5,3% 5,0% 5,6% 5,7%Colombia 0,6% 0,8% 1,1% 1,1% 1,5% 2,0%Ecuador 0,7% 0,8% 1,2% 1,5% 1,6% 6,1%Peru 0,8% 1,5% 2,1% 2,5% 3,1% 3,7%Uruguay s.d. s.d. s.d. s.d. 5,6% 6,3%Venezuela 1,2% 1,3% 1,3% 1,8% 2,4% 2,8%South America 1,8% 1,9% 2,3% 2,6% 3,5% 4,5%Costa Rica 0,7% 1,0% 1,5% 1,9% 2,1% s.d.El Salvador 1,1% 1,5% 1,7% 1,7% 1,9% 2,6%Guatemala 1 s.d. s.d. s.d. 0,4% 0,5% 0,6%Panama 1,6% 1,9% 2,2% 2,5% 2,6% 2,6%Mexico 1,9% 2,1% 2,4% 3,1% 3,8% 4,4%Central America & Mexico 1,3% 1,6% 2,0% 1,9% 2,1% 2,6%Dominican Republic 0,7% 0,9% 1,1% 1,1% 1,4% 1,9%Trinidad & Tobago 2,7% 3,7% 4,6% 5,6% 6,9% 7,4%The Caribbean 1,7% 2,3% 2,8% 3,4% 4,2% 4,6%Region Average 1,6% 1,9% 2,3% 2,5% 3,1% 4,0%(1) It only corresponds to Broadband Internet ConnectionsSource : Reports and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

The region’s penetration of Internet Connections was 4% closing 2006. However, in 2001, it was 1.6% only. This demonstrates that there still a long way to go for the industry.

Regarding analysis by zone, South America presented a penetration level of 4.5% closing 2006 while in 2001 it was 1.8% only. Central America and Mexico closed 2006 with levels of 2.6% (although Mexico had 4.4%). Lastly, the Caribbean registered a penetration level of 4.6%.

Regarding analysis by country, the highest penetration of the region is observed in Trinidad & Tobago with 7.4%. Then Argentina, Uruguay and Ecuador are found with rates of 6.4%, 6.3% and 6.1% respectively.

The countries that present lower penetration are the Dominican Republic with 1.9%, Colombia with 2%, Panama and El Salvador with 2.6% and Venezuela with 2.8%.

Mobile Telephony Contribution toLatin America and the Caribbean Economies by Country


Third Part:

1. Argentina

1.1. Mobile Telephony Contribution toGross Domestic Producto

Figure 1.1.1. Argentina: Supply and Demand Evolution

of Mobile Telephony 2001-2006

Source : Researches and Balances of Companies and Convergencia Research estimations

3.531

1.139 1.422

2.573

4.112

5.720

3.073

5.048

2.221

1.046911

2.789

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $

Supply: Accum. ‘01 to ’06

18.946 Demand: Accum. ‘01 to ’06

15.088

From 2001 to 2006, Mobile Telephony contributed to Argentina’s GDP supplying goods and services for approximately US $18.946 million.

Regarding Demand, Mobile Telephony contributed to GDP approximately US $15.088 million in purchasing of goods and services from 2001 to 2006.

Figure 1.1.2. Argentina: Average Annual Variation Rateof Mobile Telephony and GDP 2001-2006

Source : The National Institute of Statistics and Census (INDEC), Economic Commission for Latin America and the Caribbean Statistical (ECLAC)-Published Balances of Companies and Convergencia Research estimations

24,9%

-67,7%

80,9% 59,8%

39,1%

112,2%

14,9%

38,4%

64,2%

-67,3%

-10,9%8,8%

9,0% 9,2% 8,5%

-80,0%

-60,0%

-40,0%

-20,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

140,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Supply: Var. ’06 vs. ‘01

62,0%Demand:

Var. ’06 vs. ‘01

81,0%

GDP: Var. ’06 vs. ‘01

25,2%

In the period 2001-2006, the total increase of Mobile Telephony was 62% for the Supply and 81% for the Demand. In the same period, as a whole, the Argentinean economy registered a 25.2% growth rate.

During 2001 and 2002 Argentina faced one of the most severe economic crises in its history. However, it demonstrated a power of surprising recovery in very short time, generating very signi� cant growth rates after the devaluation crisis. In the case of Mobile Telephony, the increase registered during the period 2002-2006 was 402.2% for the Supply and 454% for the Demand. Regarding the economy, as a whole, the rate of the period was 14%.

1. Argentina

Figure 1.1.3. Argentina: Accumulated Average Variation Rateof Mobile Telephony, GDP and Economic Sectors 2001-2006

Source : ECLAC, INDEC, Researches and Balances of Companies and Convergencia Research estimations

47,2%

35,3%

23,3% 21,9%17,9%

15,6%

5,7%

25,2%

62,0%65,9%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

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Regarding comparison of Mobile Telephony growth rates accumulated in the period 2001-2006 with respect to other sectors of the economy; it is observed that this industry is in the second place with a rate of 62% behind the Constructions sector that has grown 65.9% generating a true real state boom in the country. On average, the national economy grew 25.2%.

Figure 1.1.4. Argentina: Mobile Telephony aspercentage of GDP 2001-2006


1,1% 1,1%

1,7%

2,2%

2,7%

1,3%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

2001 2002 2003 2004 2005 2006

Part

icip

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in G

DP

The Mobile Telephony activity was 1.3% as a participation percentage of ordinary GDP in 2001. In 2006 the proportion had changed signi� cantly, duplicating the pre-crisis participation levels observing a relation of 2.7%.



ntributiioon to

1.2. Mobile Telephony Contributionto National Investment

Figure 1.2.1. Argentina: Mobile Telephony Investment Evolution(CAPEX) 2001-2006

Source : Researches and Balances of Companies, Regulatory Organisms and Convergencia Research estimations

424

114

48

366

439

533

0

100

200

300

400

500

600

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $

CAPEX : Accum. ‘01 to ’06

US$ 1.923

In Argentina the Mobile Telephony operators have accumulated investments in Capital Expenditure (CAPEX) for approximately US $1.923 million among 2001-2006.

Figure 1.2.2. Argentina: Investment/ Mobile TelephonySales vs. Investment / GDP Ratios Comparison 2001-2006


20,3%21,5%

19,2%

15,1%

12,0%

14,2%

9,3%10,7%

14,2%

10,0%

12,0%

3,4%0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %

Investment % / GDPCAPEX % / Sales

In the � gure above it is observed the relation between the Investment (CAPEX) as percentage of Mobile Telephony Total Sales, compared to the relation of Investment as percentage of Gross Domestic Product at national level for 2001-2006 period.

The conclusion is that on average, the Mobile Telephony industry has invested approximately 10% of its Sales, while the country total has invested approximately 17.7% of its GDP. The result is in� uenced by the important fall of the investment in 2002 and 2003 as a consequence of the uncertainty and crisis of those years.

1.3. In� ation vs. Mobile TelephonyARPU Evolution

Figure 1.3.1. Argentina: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : INDEC, Researches and Balances of Companies and Convergencia Research estimations

-67,8%

-13,3%-4,7%

18,8%13,0%

25,9%

13,4%4,4%

9,7% 10,9%

-70,0%

-50,0%

-30,0%

-10,0%

10,0%

30,0%

50,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI: + 81,3%

Accum. Var. Mobile Telephony:- 64,3%

At the beginning of 2002 Argentina faced an abrupt exit of “convertibility”, (US $1 = AR $1) and as consequence during that year it registered an in� ation rate of 25.9%. In the following years in� ation remained sFigure according to an emerging country growth levels. In the 2001-2006 period, the accumulated in� ation was 81.3%.

Regarding Mobile Telephony, the average revenues per user (ARPU) evolution was unequal. In 2003 an important increase of 18.8% was observed as a consequence of the partial currency revaluation and the consumption increase by user. From 2004 onward, the average revenue variation of Mobile Telephony has registered negative rates, in spite of being operating in an in� ationary environment. This is mainly due to users’ incorporation of lower monthly average consumption.

Figure 1.3.2. Argentina: Accumulated Average Variation Rateof CPI, Mobile Telephony ARPU and GDP 2001-2006

Source : INDEC, Researches and Balances of Companies and Convergencia Research estimations

126,0%109,5%

84,7% 84,1%

62,8%52,9% 49,8% 49,7%

81,3%97,7%

-170,0%

-120,0%

-70,0%

-20,0%

30,0%

80,0%

130,0%

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and

basi

c se

rvic

es

Mob

ile T

elep

h.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01


Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed the de� ationary character of the industry’s average revenues that accumulated a 64.3% decrease, although all the sectors included in CPI have shown average rates of 81.4% that in clothing case reached levels of 126%.


Third Part:

1.4. Mobile Telephony Contributionto Employment

Figure 1.4.1. Argentina: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006


Total employment generated by Mobile Telephony: 37.278

Direct:# 9.51825,5%Indirect:

# 27.76074,5%

In 2006, approximately 37.278 people have been employed by the Mobile Telephony Industry in Argentina.

Approximately 9.518 people are kept directly employed by Mobile Telephony operators. Meanwhile, the industry has indirectly generated 27.760 additional job positions through the � rst link of its Value Chain.

It can be concluded that for each employee directly employed by the Mobile Telephony industry, 2.9 employees are indirectly demanded.

Figure 1.4.2. Argentina: Indirect Employment generated byMobile Telephony in the 1st. Link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 22.000 79,3%Mobile Contents (SVA) 1.350 4,9%Sites Installing 1.200 4,3%Maintennance and Repairs 1.100 4,0%Network: Radiobase + Troncal Network + Equipments 900 3,2%Terminals Logistic 400 1,4%IT Systems 350 1,3%Terminal Equipments 200 0,7%Others 120 0,4%Electrical Feeding 80 0,3%Towers 60 0,2%Indirect Total Employment 27.760 100,0%Source : Study carried out by Convergencia Research according to datagiven by Mobile Telephony Companies and its Providers

It is observed that of the total employment generated by Mobile Telephony through the � rst link of its Value Chain, 79.3% is destined to carry out commercial actions.

1.5. Mobile Telephony Contributionto Connectivity

Figure 1.5.1. Argentina: Number of Mobile - Fixed Linesand Internet Connections Evolution 2001-2006

Source : National Communications Commission (CNC)

13.512

22.156

7.8426.5676.742

31.510

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

2001 2002 2003 2004 2005 2006Th

ousa

nds

of L

ines

Mobile LinesFixed LinesInternet Connections

Mobile telephony: In 2006, Argentina had a total of 31.5 million users, while at the end of 2001 only 6.7 million users existed. The amazing growth reached during the period, is one of the highest observed in Latin America and the Caribbean, in spite of the severe economic crisis suffered by the country in the � rst years under analysis.

Fixed Telephony: The � xed lines total was 9.5 million in 2006; signi� cant growth variations were not observed in the period under analysis.

Internet: The total internet connections were 2.5 million in 2006. This includes all the Dial Up accesses and Broadband. A moderated growth is observed in the period under analysis.

Figure 1.5.2. Argentina: Annual Variation Rate in Number ofMobile - Fixed Lines and Internet Connections 2001-2006

Source: CNC

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Mobiles: ’06 vs. ‘01 Var.

367,4%Internet:

’06 vs. ‘01 Var.

62,2%

Fixed: ’06 vs. ‘01 Var. 7,5%

The growth rate of mobile users in the 2001-2006 period was 367.4%; much higher than 7.5 % growth of Fixed Telephony and 62.2 % of Internet.

Only, in 2006 Mobile Telephony grew 42.2%. Due to the high penetration levels of Mobile Telephony it is foreseen that the number of mobile lines will be increased in the following years, but in a moderated rhythm.



ntributiioon to

Figure 1.5.3. Argentina: Mobiles-Fixed Linesand Internet Connections Penetration 2001-2006

Source : ECLAC and CNC

80,9%

57,4%

35,3%

20,7%17,5%18,1%

24,5%

6,4%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony is the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 it had reached penetration levels of 80.9%; positioning it as the highest penetration of Latin America and registering similar levels to some countries of the First World.

In only 5 years, Mobile telephony modi� ed its penetration level from 18.1% in 2001 to 80.9% in 2006.

Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during the whole period closing 2006 with a 24.5 % penetration.

Although Internet connections have increased, at the end of the analyzed period there is still a long way to go; closing 2006 its penetration level was 6.4%.


Third Part:

2. Brazil

2.1. Mobile Telephony Contribution toGross Domestic Product

Figure 2.1.1. Brazil: Mobile Telephony Supplyand Demand Evolution 2001-2006

Source : Balances Published by Companies and Convergencia Research estimations

5.085

6.2227.613

10.592

15.135

18.304

16.039

18.760

9.988

6.1855.053

4.221

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $



60.246

From 2001 to 2006, the Mobile Telephony contributed to national GDP, supplying goods and services for approximately US $62.952 million.

With respect to Demand, the Mobile Telephony contributed US $60.246 million to GDP purchasing goods and services from 2001 to 2006.

Figure 2.1.2. Brazil: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : ECLAC, Balances Published by Companies and Convergencia Research estimations

22,4%

22,4%

39,1%

42,9%

20,9%

61,5%

22,4%

60,6%

17,0%19,7%

2,7%

1,1%

5,7%2,9% 3,7%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

% Supply: Var. ’06 vs. ‘01

260,0%

Demand: Var. ’06 vs. ‘01

344,5%

GDP: Var. ’06 vs. ‘01

17,1%

In the 2001-2006 period, the total growth of Mobile Telephony was 260% for the Supply and 344.5% for the Demand. In the same period Brazil’s economy, as a whole, registered a growth rate of 17.1%.

Figure 2.1.3. Brazil: Accumulated Average Variation Rateof Mobile Telephony, GDP and Economic Sectors 2001-2006

Source : ECLAC, Statistical Organism and National Central Banks, Researches, Regulatory Organisms and Convergencia Research estimations

32,4% 26,2% 19,8% 16,4% 16,3% 16,0%

260,0%

42,1%23,2% 17,1%

0,0%

50,0%

100,0%

150,0%

200,0%

250,0%

300,0%

Mob

ileTe

leph

ony

Min

ning

&Q

uarr

y

Tran

spor

t &C

omm

unic

atio

n

Pub

lic S

ervi

ces

Agr

icul

ture

,H

untin

g, e

tc.

Finn

an.&

Bus

ines

s S

ervs

.

GD

P

Man

ufac

.In

dust

ry

Oth

er S

ervi

ces

Trad

e

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates accumulated in the 2001-2006 period are compared to the different economy sectors, it is conclude that Mobile Telephony occupies by far the � rst place registering a rate of 260%, while Minnning and Quarrying was the second sector with highest increase registering a 42. 1% rate. On average, the national economy grew 17.1%.

Figure 2.1.4. Brazil: Mobile Telephony as porcentageof GDP 2001-2006

Source : ECLAC, Statistics and Geography Brazilian Institue (IBGE), Balances Published by Companies and Convergencia Research estimations

1,2%1,4%

1,6%1,7%

1,9%

0,9%

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

1,6%

1,8%

2,0%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

In 2001, the Mobile Telephony activity as participation percentage regarding nominal GDP was 0.9%. In 2006, the proportion had signi� cantly changed duplicating the participation levels, elevating the proportion to 1.9%.



ntributiioon to


Figure 2.2.1. Brazil: Investment Evolution ofMobile Telephony (CAPEX) 2001-2006


870 9891.219

1.926

3.380

3.983

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $

CAPEX : Accum. ‘01 to. ’06

12.366

The Mobile telephony operators in Brazil have invested approximately US $12.366 million in Capital Expenditures (CAPEX) between 2001 and 2006.

Figure 2.2.2. Brazil: Investment / Mobile Telephony Sales vs. Investment / GDP Ratios Comparison 2001-2006

Source : ECLAC, IBGE, Balances Published by Companies and Convergencia Research estimations

16,2%16,3%16,1%15,3%

16,4%

17,0%

17,1%

15,9%

16,0%

18,2%

21,8%22,3%

10,0%

12,0%

14,0%

16,0%

18,0%

20,0%

22,0%

24,0%

26,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %



On average, the Mobile Telephony industry has invested approximately 18.5% of its Sales, while the country total has invested approximately 16.2% of its GDP. The conclusion is that the Mobile Telephony investments were higher, in proportion, than those carried out by the rest of the national economy. This tendency was even more remarkable during the last 3 years of the analyzed period.


Figure 2.3.1. Brazil: Average Annual Variation Rate of CPIand Mobile Telephony ARPU 2001-2006

Source : IBGE, Balances Published by Companies and Convergencia Research estimations

-25,2%

-4,6%

0,2% 1,0%

7,6%

2,8%

5,1%6,6%8,2%

9,9%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI:

+36,8%

Accum. Var. Mobile Telephony: - 22,3%

In the 2001-2006 period, the accumulated in� ation was 36.8%.

Regarding Mobile Telephony, its average revenues per user evolution (ARPU) was negative. A signi� cant decrease of 25.2% was observed in 2002 as a consequence of the currency devaluation. Between 2005 and 2006 a light increase was produced but it did not match the 2002 decrease.

Figure 2.3.2. Brazil: Average Accumulated Variation Rate of CPI,Mobile Telephony Average Revenues and GDP 2001-2006

Mobile Telehony

Source : IBGE, Balances Published by Companies and Convergencia Research estimations

52,5%

46,8%42,4%

33,8%

28,2%

-22,3%

36,8%34,1%

43,0%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

Tran

spor

t

Edu

catio

n

Hea

lth e

xpen

ses

Per

sona

lex

pens

es CP

I

Hou

sing

Mai

nten

ance

Food

and

Bev

erag

es

Clo

thin

g

Mob

ile T

elep

h.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01


Based on the comparison of the accumulated variation rate of in� ation in the years of study, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed the industry’s de� ationary character that accumulated a 22.3% decrease from 2001 to 2006, although all the components have shown variation in in� ation. The highest increase was registered by the Transports sector reaching 52.5%.


Third Part:


Figure 2.4.1. Brazil: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006



Direct: # 31.84918,8%

Indirect: # 137.900

81,2%

The Mobile Telephony industry in Brazil has employed approximately 169,749 people in 2006.

Approximately 31,849 people are directly employed by Mobile Telephony operators. While, the industry has indirectly generated 137,900 additional job positions through the � rst link of its Value Chain.

It can be concluded that for each employee directly employed by the Mobile telephony, 4.3 employees are indirectly demanded.

Figure 2.4.2. Brazil: Indirect Employment generated byMobile Telephony in the 1st link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 58.000 42,1%Sites Installing 27.000 19,6%Maintennance and Repairs 17.700 12,8%Terminal Equipments 15.000 10,9%Network: Radiobase + Troncal Network + Equipments 9.300 6,7%Mobile Contents (SVA) 4.400 3,2%Terminals Logistic 2.800 2,0%IT Systems 2.300 1,7%Others 1.400 1,0%Indirect Total Employment 137.900 100,0%Source : Study carried out by Convergencia Research according to datagiven by Mobile Telephony Companies and its Providers

It is observed that from the total employment generated by Mobile Telephony through the � rst link of its Value Chain, 42.1% is destined to an outsourcing Sales team. It is also important the employment level generated among the Site Installers, Maintenance and Repairs and the production of Terminal Equipments.

Brazil produces and exports Terminal Equipments, industry that generates 15,000 jobs. Brazil together with Mexico are the only countries of Latin America and the Caribbean that have a terminal production industry; besides of contributing to employment it generates revenues for export


Figure 2.5.1. Brazil: Number of Mobile, Fixed Linesand Internet Connections Evolution 2001-2006

Note: Internet Connections only refers to Broadband ConnectionsSource : IBGE and The Brazilian National Telecommunications Agency (ANATEL)

65.605

86.210

46.373

34.88128.746

99.919

0

20.000

40.000

60.000

80.000

100.000

120.000

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006 Brazil had a total of 99.9 million users, while at the end of 2001 only 28.7 million users existed. Brazil is the country with the highest number of mobile users of the Region.

Fixed telephony: The � xed lines total was 38.8 million in 2006; signi� cant growth variations were not observed in the period under analysis.

Internet: The total broadband connections were of 5.7 million in 2006. An interesting growth is observed in the period under analysis, since only 569 thousand connections existed in 2001.

Figure 2.5.2. Brazil: Annual Variation Rate Mobile, Fixed Linesand Internet Connections Number 2001-2006

Note: Internet Connections only refers to Broadband ConnectionsSource : IBGE and ANATEL

-10,0%

10,0%

30,0%

50,0%

70,0%

90,0%

110,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

% Mobiles: ’06 vs. ‘01 Var.

247,6%

Internet:’06 vs. ‘01 Var.

894,0%

Fixed: ’06 vs. ‘01 Var. 3,7%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 247.6%; much higher than Fixed Telephony growth of 3.7%. The Broadband Internet growth was even higher to that of Mobile Telephony, registering a rate of 894%.



ntributiioon to

Figure 2.5.3. Brazil: Mobile, Fixed Lines andInternet Connections Penetration 2001-2006

Note: Internet Connections only refers to Broadband ConnectionsSource : IBGE and ANATEL

16,2% 19,4%25,4%

35,5%

46,0%

52,6%

20,4%

3,0%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2001 2002 2003 2004 2005 2006

Pen

etra

tion

%



At the end of 2006, Mobile Telephony had reached 52.6% penetration levels, representing the most important telecommunications service regarding its contribution to national connectivity.

In only 5 years, mobile telephony modi� ed its penetration level from 16.2% in 2001 to 52.6% in 2006.

Regarding Fixed Telephony its contribution to connectivity remained sFigure during the whole period, closing 2006 with a penetration of 20.4 %.

Although, Broadband Internet connections were increased, the penetration levels at the end of the period studied remained in minimum values; closing 2006 its penetration level was 3%.


Third Part:

3. Chile


Figure 3.1.1. Chile: Mobile Telehony Supplyand Demand Evolution 2001-2006

Source : Telecommunications Subsecretary of Chile (SUBTEL), Balances Published by Companies and Convergencia Research estimations

998

1.2601.441

1.7321.908

2.813

1.675

2.487

1.376

1.0821.042982

0

500

1.000

1.500

2.000

2.500

3.000

3.500

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


10.152

Demand: Accum. ‘01 to ’06

8.643

From 2001 to 2006, Mobile Telephony contributed to national GDP providing approximately US $10.152 million of goods and services.

With respect to Demand, Mobile Telephony contributed to GDP purchasing approximately US $8.643 million of goods and services from 2001 to 2006.

Figure 3.1.2. Chile: Average Annual VariationRate of Mobile Telephony and GDP 2001-2006

Source : ECLAC, SUBTEL Balances Published by Companies and Convergencia Research estimations

14,4%

26,3%

20,2%10,2%

47,4%

27,2%

3,9%

21,8%

48,5%

6,1%2,2%

3,9%6,0% 5,7% 4,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

% Supply: Var. ’06 vs. ‘01

182,0%


153,5%

GDP: Var. ’06 vs. ‘01

23,7%

In the 2001-2006 period, the total growth of Mobile Telephony was 182% for the Supply and 153.5% for the Demand. In the same period Chile’s economy, as a whole, registered a growth rate of 23.7%.

Figure 3.1.3. Chile: Accumulated Average Variation Rate of Mobile Telephony, GDP and Economic Sectors 2001-2006


32,0% 28,4% 26,3% 23,0%15,2%

23,7%

182,0%

32,9% 27,1% 25,8%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

140,0%

160,0%

180,0%

200,0%

Mob

ileTe

leph

ony

Tran

sp. &

Com

mun

icat

ion

Agr

icul

ture

,H

untin

g, e

tc.

Trad

e

Con

stru

ctio

n

Pub

lic S

ervi

ces

Finn

an.&

Bus

ines

s S

ervs

.

GD

P

Man

ufac

.In

dust

ry

Oth

er S

ervi

ces

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in the 2001-2006 period are compared to the other economy sectors, it is observed that mobile telephony occupies by far the � rst place registering a rate of 182%, while Transport and Communications has been the second sector of highest growth registering a rate of 32.9%. On average, the national economy grew 23.7%.

Figure 3.1.4. Chile: Mobile Telephony as porcentageof GDP 2001-2006


1,9%1,9%

1,8%1,6%

1,9%

1,4%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 1.4% in 2001. In 2006, the proportion had improved reaching participation levels of 1.9%.



ntributiioon to


Figure 3.2.1. Chile: Mobile Telephony Investment Evolution(CAPEX) 2001-2006

Source : SUBTEL Balances Published by Companies and Convergencia Research estimations

315

200171

269

398

655

0

100

200

300

400

500

600

700

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


2.009

The Mobile telephony operators in Chile have invested approximately US $2.009 million in Capital Expenditures (CAPEX) between 2001 and 2006.

Figure 3.2.2. Chile: Investment / Mobile TelephonySales vs. Investment / GDP Ratios Comparison 2001-2006


20,2%20,6%19,1%

20,1%20,3%20,7%

31,6%

15,9%11,9% 15,5%

23,3%

20,8%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %


In the � gure above it is observed the relation between the Investment (CAPEX) as percentage of Mobile Telephony Total Sales, compared to the relation, of Investment as percentage of Gross Domestic Product at national level for 2001-2006 period.

On average, the Mobile Telephony industry has invested approximately 19.8% of its Sales, while the country total has invested approximately 20.2% of its GDP. The conclusion is that the Mobile Telephony investments were in proportion similar to those carried out by the rest of the national economy.


Figure 3.3.1. Chile: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : National Statistics Intitute of Chile (INE), SUBTEL Balances Published by Companies and Convergencia Research estimations

-11,7%

-4,8%-4,4%

3,8%

16,7%

2,6%3,7%

2,4%1,1%2,8%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI:

+ 13,2%

Accum. Var. Mobile Telephony:- 2,7%

In the 2001-2006 period, the accumulated in� ation was 13.2% remaining the annual variation rate sFigure.

Regarding Mobile Telephony, its average revenues per user (ARPU) evolution was negative. A signi� cant decrease of 11.7% was observed in 2002. From 2005 a slight increase was produced, but at the end of 2006 it did not match the decreases of previous years.

Figure 3.3.2. Chile: Average Accumulated Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : INE, SUBTEL, Balances Published by Companies and Convergencia Research estimations

25,9%

19,3%

15,3%

-11,0%

13,2%9,6%

18,0%

-5,1%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

Tran

spor

t

Hou

sing

Cul

ture

Hea

lth e

xpen

ses

CP

I

Food

s an

dB

ever

ages

Mob

ile T

elep

h.

Equ

ipm

ent

Clo

thin

g

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01


Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed the industry’s de� ationary character that accumulated a 2.7%, decrease, although all the components have shown variation in in� ation. The highest increase was registered by the Transports sector reaching 25.9%.


Third Part:


Figure 3.4.1. Chile: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006



Direct: # 4.77931,4%

Indirect: # 10.43068,6%

In 2006, approximately 15,209 people have been employed by the Mobile Telephony Industry in Chile.

Approximately 4,779 people are kept directly employed by Mobile Telephony operators. Meanwhile, the industry has indirectly generated 10,430 additional job positions through the � rst link of its Value Chain.

It can be concluded that for each employee directly employed by the Mobile Telephony industry, 2,2 employees are indirectly demanded.

Figure 3.4.2. Chile: Indirect Employment generated byMobile Telephony in the 1st. Link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 7.000 67,1%Sites Installing 1.000 9,6%Network: Radiobase + Troncal Network + Equipments 700 6,7%Maintennance and Repairs 530 5,1%IT Systems 380 3,6%Terminals Logistic 280 2,7%Mobile Contents (SVA) 250 2,4%Terminal Equipments 180 1,7%Towers 80 0,8%Electrical Feeding 30 0,3%Indirect Total Employment 10.430 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and its providers

It is observed that of the total employment generated by Mobile Telephony through the � rst link of its Value Chain, 67.1% is destined to an outsourcing Sales Team. It is also important the employment level generated among the Site Installers that reaches 9.6%.


Figure 3.5.1. Chile: Number of Mobile, Fixed Lines andInternet Connections Evolution 2001-2006

Source : SUBTEL

9.261

10.570

7.2686.244

5.101

12.451

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006, Chile had a total of 12.5 million users, while at the end of 2001 only 5.1 million users existed.

Fixed telephony: The � xed lines total was 3.4 million in 2006, signi� cant growth variations were not observed in the period under analysis.

Internet: The total internet connections were of 944 thousand in 2006 until 2006. This includes all Dial Up and Broadband accesses. An interesting growth is observed in the period under analysis, since only 698 thousand connections existed in 2001.

Figure 3.5.2. Chile: Annual Variation Rate Number of Mobile,Fixed Lines and Internet Connections 2001-2006

Source : SUBTEL

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


144,1%Internet:

’06 vs. ‘01 Var.

35,3%

Fixed: ’06 vs. ‘01 Var. - 1,2%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 144.1%; much higher than the evolution of Fixed Telephony that has decreased to 1.2%. Regarding Internet growth it has been signi� cant registering a rate of 35.3%.



ntributiioon to

Figure 3.5.3. Chile: Mobile-Fixed Lines andInternet Connections Penetration 2001-2006

Source : ECLAC and SUBTEL

75,8%65,0%

57,5%

45,7%

39,7%

32,8%

20,9%

5,7%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. A level of 75.8% penetration positioned Chile as one of the highest of Latin America.


Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during the whole period, closing 2006 with a 20.9 % penetration.

Although Internet connections have increased, there is still a long way to go. Closing 2006 its penetration level was 5.7%.


Third Part:

4. Colombia


Figure 4.1.1. Colombia: Supply and Demand Evolutionof Mobile Telephony 2001-2006

Source : Superintendence of Public Utilities (SSPD), Regulatory Commission for Telecommunications (CRT), Balances Published by Companies and Convergencia Research estimations

541734 935

1.626

2.776

3.672

2.866

3.508

1.486

872627606

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


10.285


9.965



Figure 4.1.2. Colombia: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : ECLAC, SSPD, CRT, Companies Balances and Convergencia Research estimations

27,4%

35,8%

74,0%70,7%

32,3%

70,5%

39,1%

92,8%

22,4%

3,4%

1,9%3,9% 4,9% 4,7% 6,8%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


579,2%


478,7%

GDP: Var. ’06 vs. ‘01

24,2%

In the 2001-2006 period, the total growth of Mobile Telephony was 579.2% for the Supply and 478.7% for the Demand; establishing it as the country with the highest growth in the region. In the same period Colombia’s economy, as a whole, registered a growth rate of 24.2%.

Figure 4.1.3. Colombia: Accumulated Average Variation Rateof Mobile Telephony, GDP and Economic Sectors 2001-2006


38,6% 31,2% 14,5% 10,2%24,2% 19,1%

579,2%

83,6%28,2% 19,3%

0,0%

100,0%

200,0%

300,0%

400,0%

500,0%

600,0%

700,0%

Mob

ileTe

leph

ony

Con

stru

ctio

n

Trad

e

Man

ufac

.In

dust

ry

Tran

sp. &

Com

mun

icat

ion

GD

P

Min

ning

&Q

uarr

y

Finn

an.&

Bus

ines

s S

ervs

.

Pub

lic S

ervi

ces

Agr

icul

ture

,H

untin

g, e

tc.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in the 2001-2006 period are compared to the other economy sectors, it is observed that mobile services occupy by far the � rst place registering a rate of 579.2%, while Constructions has been the second sector of highest growth registering a rate of 83.6%. On average, the national economy grew 24.2%.

Figure 4.1.4. Colombia: Mobile Telephony as porcentageof GDP 2001-2006


0,9%1,2%

1,7%

2,3%

2,7%

0,7%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 0.7% in 2001. In 2006, the proportion has been quadruplicated reaching participation levels of 2.7%.



ntributiioon to


Figure 4.2.1. Colombia: Mobile Telephony Investment Evolution(CAPEX) 2001-2006


217

83

262323

840905

0

100

200

300

400

500

600

700

800

900

1.000

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $ CAPEX :

Accum. ‘01 to ’06

2.630

The Mobile telephony operators in Colombia have invested approximately US $2.630 million in Capital Expenditures (CAPEX) between 2001 and 2006.

Figure 4.2.2. Figure 4.2.2. Colombia: Investment / Mobile Telephony Sales vs. Investment / GDP Ratios Comparison 2001-2006


18,5%20,8%

18,4%16,5%

14,5%

13,6%

40,1%

11,4%

28,0%

19,8%

24,6%

30,2%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

45,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %



On average, the Mobile Telephony industry has invested approximately 25.7% of its Sales, while the country total has invested approximately 17.1% of its GDP. The conclusion is that the Mobile Telephony investments were in proportion, higher than those carried out by the rest of the national economy.


Figure 4.3.1. Colombia: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : National Administrative Department of Statistics (DANE) and CRT

-7,4% -7,4%

-21,4%

-1,4% -1,9%

4,5%4,9%5,5%6,5%7,0%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI:

+ 31,7%


In the period 2001-2006, the accumulated in� ation was 31.7% remaining the annual variation rate sFigure.

Regarding Mobile Telephony, its average revenues per user (ARPU) evolution was negative. A signi� cant decrease of 21.4% was observed in 2003. From 2004 an increase that has not totally matched the decreases of previous years has been produced.

Figure 4.3.2. Colombia: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source: DANE and CRT

40,9% 40,5% 38,7%

30,4% 29,9%25,8%

19,0%

4,5%

31,7%

-50,0%

-40,0%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

Tran

spor

t

Hea

lth

Food CP

I

Sev

eral

Exp

ense

s

Edu

catio

n

Hou

sing

Cul

ture

Clo

thin

g

Mob

ileTe

leph

ony

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01


Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed the industry’s de� ationary character that accumulated a 34.8% decrease, although all the components have shown variation in in� ation. The highest increase was registered by the Transports and Communications sector that has reached a 40.9% rate.


Third Part:


Figure 4.4.1. Colombia: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006


Direct: # 5.46611,7%

Indirect: # 41.29088,3%


The Mobile Telephony industry in Colombia has employed approximately 46,756 people in 2006.


It can be concluded that for each employee directly employed by the Mobile telephony, 7,6 employees are indirectly demanded.

Figure 4.4.2. Colombia: Indirect Employment generated byMobile Telephony in the 1st. link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 35.000 84,8%Sites Installing 1.000 2,4%Towers 1.000 2,4%Mobile Contents (SVA) 850 2,1%Maintennance and Repairs 800 1,9%Terminals Logistic 800 1,9%Network: Radiobase + Troncal Network + Equipments 750 1,8%IT Systems 600 1,5%Terminal Equipments 400 1,0%Electrical Feeding 90 0,2%Indirect Total Employment 41.290 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and its providers

It is observed that from the total employment generated by Mobile Telephony through the � rst link of its Value Chain, 84.8% is destined to an outsourcing Sales Team.


Figure 4.5.1. Colombia: Number of Mobile-Fixed Lines andInternet Connections Evolution 2001-2006

Source : CRT

10.401

21.893

6.1864.5973.265

29.763

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

2001 2002 2003 2004 2005 2006Th

ousa

nds

of L

ines


Mobile telephony: In 2006, Colombia had a total of 29.8 million users, while at the end of 2001 only 3.3 million users existed.

Fixed telephony: The � xed lines total was 8.0 million in 2006, signi� cant growth variations were not observed in the period under analysis.

Internet: The total internet connections were of 888 thousand in 2006. This includes all Dial Up and Broadband connections. A signi� cant growth is observed in the period under analysis, since only 262 thousand connections existed in 2001.

Figure 4.5.2. Colombia: Annual Variation Rate Mobile,Fixed Lines Number and Internet Connections 2001-2006

Source : CRT

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

Móviles: Var. '06 vs. '01

144,1%

Internet: Var. '06 vs. '01

35,3%

Fijas: Var. '06 vs. '01 - 1,2%

-30,0%

-10,0%

10,0%

30,0%

50,0%

70,0%

90,0%

110,0%

130,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


811,6%Internet:

’06 vs. ‘01 Var.

238,8%

Fixed: ’06 vs. ‘01 Var. 8,0%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 811.6%; representing together with Ecuador the highest growth registrations in the region. The increase was much higher than the evolution of Fixed Telephony that increased to 8%. Regarding Internet growth it has been signi� cant registering a rate of 238.8%.



ntributiioon to

Figure 4.5.3. Colombia: Mobile- Fixed Lines andInternet Connections Penetration 2001-2006

Source : ECLAC and CRT

65,4%

48,8%

23,5%

14,2%10,7%

7,7%17,5%

2,0%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



The Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 Colombia’s penetration levels reached 65. 4%.



Internet connections were increased, but still its penetration levels remain low regarding other services studied. Closing 2006 its penetration level was 2%.


Third Part:

5. Ecuador


Figure 5.1.1. Ecuador: Supply and Demand Evolution ofMobile Telephony 2001-2006

Source : Companies Balances and Convergencia Research estimations

181235

418

649

1.056

1.211

1.0181.063

558

342

194187

-100

100

300

500

700

900

1.100

1.300

1.500

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


3.750Demand:


3.363



Figure 5.1.2. Ecuador: Average Annual Variation Rate of

Mobile Telephony and GDP 2001-2006

Source : ECLAC, Companies Balances and Convergencia Research estimation

77,6%

29,8%

55,3%

62,6%

14,7%

63,0%76,4%

82,4%

4,4%3,6%

4,2% 3,6%7,9% 4,7%

4,3%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


567,6%


467,4%

GDP: Var. ’06 vs. ‘01

27,3%

In the 2001-2006 period, the total growth of Mobile Telephony was 567.6% for the Supply and 467.4% for the Demand representing together with Colombia one of the countries with highest growth in the region. In the same period Ecuador’s economy, as a whole, registered a growth rate of 27.3%.

Figure 5.1.3. Ecuador: Accumulated Average Variation Rate ofMobile Telephony, GDP and Economic Sectors 2001-2006


32,1% 28,7% 21,4% 10,0%24,0% 22,5%

567,6%

35,8% 27,3% 23,0%

0,0%

100,0%

200,0%

300,0%

400,0%

500,0%

600,0%

Mob

ileTe

leph

ony

Finn

an.&

Bus

ines

s S

ervs

.

Min

ning

&Q

uarr

y

Con

stru

ctio

n

GD

P

Tran

sp. y

Com

unic

.

Man

ufac

.In

dust

ry

Agr

icul

ture

,H

untin

g, e

tc.

Trad

e

Oth

er S

ervi

ces

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in the 2001-2006 period are compared to the other economy sectors, it is observed that mobile services occupy by far the � rst place registering a rate of 567.6%, while Finnancial services, Real States and Companies has been the second sector of highest growth registering a rate of 35.8%. On average, the national economy grew 27.3%.

Figure 5.1.4. Ecuador: Mobile Telephony as percentage ofGDP 2001-2006


0,9%

1,5%

2,0%

2,9% 3,0%

0,9%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 0.9% in 2001. In 2006, the proportion it had been multiplied 3.5 times reaching participation levels of 3%.



ntributiioon to


Figure 5.2.1. Ecuador: Mobile Telephony Investment

(CAPEX) Evolution 2001-2006

Source : Companies Balances and Convergencia Research estimation

2740

78

130

231 232

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


738

The Mobile telephony operators in Ecuador have invested approximately US $738 million in Capital Expenditures (CAPEX) between 2001 and 2006.

Figure 5.2.2. Ecuador: Investment / Mobile TelephonySales vs. Investment / GDP Ratios Comparison 2001-2006

Source : ECLAC, Central Bank of Ecuador(BCE) Companies Balances and Convergencia Research estimation

21,4%

23,3%

21,3% 21,6% 21,9% 21,9%

24,5%

21,5%22,4%

20,9%

19,2%

15,0%

10,0%

12,0%

14,0%

16,0%

18,0%

20,0%

22,0%

24,0%

26,0%

28,0%

30,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %





Figure 5.3.1. Ecuador: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : BCE, Companies Balances and Convergencia Research estimation

-10,2%-7,2% -8,0%

-5,1%

-18,6%

2,9%3,5%

9,4%

6,1%

1,9%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI:

+ 25,9%


In the period 2001-2006, the accumulated in� ation was 25.9%, remaining the annual variation rate sFigure.

Regarding Mobile Telephony, the evolution of its revenues average per user (ARPU) was negative. A signi� cant decrease of 18.6% was observed in 2006. In the period under analysis, Mobile Telephony has suffered an accumulated decrease of 40.8% in its prices.

Figure 5.3.2. Ecuador: Accumulated Average Variation Rateof CPI and Mobile Telephony ARPU 2001-2006

Source : BCE, Companies Balances and Convergencia Research estimation

114,2%

101,5%

26,2% 23,8%17,3% 17,3%

-19,9%-16,6%-12,3%

-0,4%

25,9%

-60,0%

-40,0%

-20,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

Edu

catio

n

Pub

lic S

ervi

ces

Tran

spor

t

CP

I

Hot

els

&R

esta

uran

t

Hea

lth

Food

Hou

sing

Cul

ture

Clo

thin

g

Oth

ers

Mob

ile T

elep

h.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01


Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed the industry’s de� ationary character that accumulated a 40.8% decrease, although all the components have shown variation in in� ation. The highest increase was registered by the Transports and Communications sector that has reached a 114.2% rate, followed by Public Services registering a 101.5% increase.


Third Part:


Figure 5.4.1. Ecuador: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006


Direct: # 2.13530,8%

Indirect: # 4.80069,2%


The Mobile Telephony industry in Ecuador has employed approximately 6,935 people in 2006.



Figure 5.4.2. Ecuador: Indirect Employment generated byMobile Telephony in the 1st. link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 3.000 62,5%Maintennance and Repairs 300 6,3%Terminals Logistic 300 6,3%Sites Installing 250 5,2%Towers 250 5,2%Network: Radiobase + Troncal Network + Equipments 230 4,8%Terminal Equipments 200 4,2%IT Systems 150 3,1%Mobile Contents (SVA) 90 1,9%Electrical Feeding 30 0,6%Indirect Total Employment 4.800 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and i ts providers



Figure 5.5.1. Ecuador: Number of Mobile-Fixed Lines andInternet Connections Evolution 2001-2006

Source : Superintendence of Telecommunications (SUPTEL)

3.437

6.246

2.394

1.561859

8.485

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006, Ecuador had a total of 8. 5 million users, while at the end of 2001 only 859 thousand users existed.

Fixed telephony: The � xed lines total was 1.8 million in 2006; a signi� cant growth was observed due the country counted with 1.3 million lines in 2001.

Internet: The total internet connections were of 823 thousand in 2006. This includes all Dial Up and Broadband connections. A great growth is observed in the period under analysis, since only 86 thousand connections existed in 2001.

Figure 5.5.2. Ecuador: Annual Variation Rate Number of Mobile,Fixed Lines and Internet Connections 2001-2006

Source : SUPTEL

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%0,0%

40,0%

80,0%

120,0%

160,0%

200,0%

240,0%

280,0%

320,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


887,6%


861,7%

Fixed: ’06 vs. ‘01 Var.

32,9%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 887.6% the highest registered in the region. Though, mobile growth is much higher than the evolution of Fixed Telephony it has also increased registering a signi� cant rate of 32.9%. Regarding Internet growth it has been, as Mobile Telephony, the highest of the region registering a rate of 861.7%.



ntributiioon to

Figure 5.5.3. Ecuador: Mobile, Fixed Lines andInternet Connections Penetration 2001-2006

Source: SUPTEL

63,3%

47,3%

26,4%

18,6%12,3%

6,9% 13,2%6,1%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 Ecuador’s penetration levels had reached 63. 3%.


Regarding Fixed Telephony, its contribution to Connectivity had reached penetration levels of 13.2% at the end of 2006.

Internet connections were increased generating a penetration level of 6.1% closing 2006.


Third Part:

6. Peru


Figure 6.1.1. Peru: Supply and Demand Evolution ofMobile Telephony 2001-2006

Source : Supervisor Organism of Private Investment in Telecommunications (OSIPTEL), Companies Balances and Convergencia Research estimations

533

625

786

909

1.012

1.303

907

1.148

806

680

554534

-100

100

300

500

700

900

1.100

1.300

1.500

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


5.169Demand: Accum. ‘01 to ’06

4.628



Figure 6.1.2. Peru: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : ECLAC, Central Reserve Bank of Peru (BCRP), OSIPTEL, Companies Balances and Convergencia Research estimations

25,8%

17,2%

15,7%

11,3%

28,7%

18,6%22,7%

12,6%

26,5%

3,7%

5,2%3,9%

5,2%6,4%

8,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


144,3%


114,9%

GDP: Var. ’06 vs. ‘01 32,2%

In the 2001-2006 period, the total growth of Mobile Telephony was 144.3% for the Supply and 114.9% for the Demand. In the same period Peru’s economy, as a whole, registered a growth rate of 32.2%.

Figure 6.1.3. Peru: Accumulated Average Variation Rate ofMobile Telephony, GDP and Economic Sectors 2001-2006

Public Services

Source : ECLAC, BCRP, OSIPTEL, Companies Balances and Convergencia Research estimations

35,6% 33,3%23,9%

30,9%33,2%46,5%

144,3%

29,4%32,2%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

140,0%

160,0%

Mob

ileTe

leph

ony

Con

stru

ctio

n

Min

ning

&Q

uarr

y

Man

ufac

.In

dust

ry

Trad

e

GD

P

Oth

er S

ervi

ces

Pub

lic S

ervi

ces

Agr

icul

ture

,H

untin

g, e

tc.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in the 2001-2006 period are compared to rates of the other economy sectors, it is observed that mobile services occupy by far the � rst place, registering a rate of 114.3% while Constructions has been the second sector of highest growth registering a rate of 46.5%. On average, the national economy grew 32.2%.

Figure 6.1.4. Peru: Mobile Telephony as percentageof GDP 2001-2006


1,1%

1,3% 1,3% 1,3%1,4%

1,0%

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

1,6%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 1% in 2001. In 2006, the proportion had reached participation levels of 1.4%.



ntributiioon to


Figure 6.2.1. Peru: Mobile Telephony Investment (CAPEX)Evolution 2001-2006

Source : OSIPTEL, Companies Balances and Convergencia Research estimations

115

168154 150

207

276

0

50

100

150

200

250

300

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


1.069

The Mobile telephony operators in Peru have invested approximately US $1.069 million in Capital Expenditures (CAPEX) during the 2001–2006 period.

Figure 6.2.2. Peru: Investment / Mobile Telephony Sales vs.Investment / GDP Ratios Comparison 2001-2006


18,6%17,5% 17,8% 17,9%

18,8%18,1%

24,3% 25,2%

19,6%

23,3%

32,1%

21,5%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %





Figure 6.3.1. Peru: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : National Institute of Statistics and Informatics (INEI), OSIPTEL, Companies Balances and Convergencia Research estimations

-10,5%

-1,5%

-13,7%

-19,2%

-13,2%

1,1%1,5%1,5% 2,5%3,5%

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI:

+ 10,5%


In the period 2001-2006, the accumulated in� ation was 10.5%, remaining the annual variation rate sFigure.

Regarding Mobile Telephony, the evolution of its average revenues per user (ARPU) was negative. Signi� cant decreases are observed year to year. The variation in the period under analysis shows an accumulated decrease of 46.7%.

Figure 6.3.2. Peru: Accumulated Average Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : INEI, OSIPTEL, Companies Balances and Convergencia Research estimations

21,3%17,6%

11,7% 9,6% 9,0%6,8%

-1,5%

6,6%

10,5%

-60,0%

-50,0%

-40,0%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

Hou

sing

Tran

sp.&

C

omun

icac

.

Hea

lth

CP

I

Food

Cul

ture

Clo

thin

g

Furn

iture

Oth

ers

Mob

ileTe

leph

ony

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01


Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed the industry’s de� ationary character that accumulated a 46.7%, decrease, although all the components have shown variation in in� ation. The highest increase was registered by the Constructions sector that has reached a 21.3% rate.


Third Part:


Figure 6.4.1. Peru: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006


Direct: # 3.37126,7%

Indirect: # 9.25573,3%


In 2006, approximately 12,626 people were employed by the Mobile Telephony Industry in Peru.

Approximately 3,371 people were directly employed by Mobile Telephony operators. Meanwhile, the industry indirectly generated 9,255 additional job positions through the � rst link of its Value Chain.

It can be concluded that for each employee directly employed by the Mobile Telephony industry, 2,7 employees are indirectly demanded.

Figure 6.4.2. Peru: Indirect Employment generated by

Mobile Telephony in the 1st. link of its Value Chain 2006 Providers of : # %

Outsourcing Sales Team (Sales Agent) 5.500 59,4%Network: Radiobase + Troncal Network + Equipments 1.000 10,8%Sites Installing 800 8,6%Towers 500 5,4%Maintennance and Repairs 400 4,3%Terminals Logistic 300 3,2%IT Systems 280 3,0%Terminal Equipments 200 2,2%Mobile Contents (SVA) 180 1,9%Electrical Feeding 95 1,0%Indirect Total Employment 9.255 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and and its providers



Figure 6.5.1. Peru: Number of Mobile-Fixed Lines andInternet Connections Evolution 2001-2006

Source : OSIPTEL

4.093

5.583

2.9302.307

1.793

8.772

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

2001 2002 2003 2004 2005 2006Th

ousa

nds

of L

ines


Mobile telephony: In 2006, Peru had a total of 8.8 million users while at the end of 2001 only 1.8 million users existed.

Fixed telephony: The � xed lines total was 2.4 million in 2006 while in 2001 the total number was 1.6 million.

Internet: The total internet connections were of 1 million in 2006. This includes all Dial Up and Broadband connections. A signi� cant growth is observed in the period under analysis, since only 202 thousand connections existed in 2001.

Figure 6.5.2. Peru: Annual Variation Rate Number ofMobile-Fixed Lines and Internet Connections 2001-2006

Source : OSIPTEL

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


389,2%


408,9%Fixed:

’06 vs. ‘01 Var.

52,8%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 389.2%. Fixed Telephony has also shown an interesting growth, though lower reaching a 52.8% rate. Regarding Internet it has signi� cantly varied registering a growth rate of 408.9%.



ntributiioon to

Figure 6.5.3. Peru: Mobile- Fixed Lines andInternet Connections Penetration 2001-2006

Source: CEPAL and OSIPTEL

31,8%

20,5%

15,2%

11,0%8,8%

6,9%

8,7%3,7%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 it had reached penetration levels of 31.8%.



Although Internet connections were increased, there is still a long way to go. Closing 2006 its penetration level was 3.7%.


Third Part:

7. Uruguay


Figure 7.1.1. Uruguay: Supply and Demand Evolution ofMobile Telephony 2002 - 2006

Source : National Telecommunications Commission (CONATEL), Balances Published by Companies and Convergencia Research estimations

202

132152

185

344331

184

151

123

190

0

50

100

150

200

250

300

350

400

2002 2003 2004 2005 2006

Mill

ions

of U

S $


1.016


978


With respect to Demand, Mobile Telephony contributed to GDP purchasing approximately US $978 million of goods and services from 2002 to 2006.

Figure 7.1.2. Uruguay: Average Annual Variation Rate of Mobile Telephony and GDP 2002 - 2006

Source : ECLAC, National Institute of Statistics (INE) and Balances Published by Companies and Convergencia Research estimations

15,0%

-34,5%

21,4%

86,5%

21,4%23,5%

80,4%

-35,4%

2,2%11,8%

6,6% 7,0%

-40,0%

-20,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

2003 2004 2005 2006

Ann

ual V

aria

tion

%


70,5% Demand: Var. ’06 vs. ‘01

74,6%

GDP: Var. ’06 vs. ‘01 30,3%

In the 2002-2006 period, the total growth of Mobile Telephony was 70.5% for the Supply and 74.6% for the Demand. In the same period Uruguay’s economy, as a whole, registered a growth rate of 30.3%.

. A2.

Figure 7.1.3. Uruguay: Accumulated Average Variation Rateof Mobile Telephony, GDP and Economic Sectors 2002 - 2006

Source : ECLAC, INE and Balances Published by Companies and Convergencia Research estimations

43,5%46,8%

-8,5%

30,3%

43,0%

50,9%

70,5%

18,6%

38,6%

6,9%

-1,7%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

Mob

ileTe

leph

ony

Man

ufac

.In

dust

ry

Min

ning

&Q

uarr

y

Trad

e

Tran

sp. y

Com

unic

.

Agr

icul

ture

,H

untin

g, e

tc.

GD

P

Con

stru

ctio

n

Oth

er S

ervi

ces

Pub

lic S

ervi

ces

Finn

an.&

Bus

ines

s S

ervs

.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in 2002-2006 period are compared to rates of the other economy sectors, it is observed that mobile services occupy the � rst place registering a rate of 70.5%, while Manufacturing has been the second sector of highest growth registering a rate of 50.9%. On average, the national economy grew 30.3%.

Figure 7.1.4. Uruguay: Mobile Telephony as percentageof GDP 2002 - 2006


1,6%1,8%

1,1%1,2%1,2%

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

1,6%

1,8%

2,0%

2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 1.6% in 2002. In 2006, the proportion had reached participation levels of 1.8%.



ntributiioon to


Figure 7.2.1. Uruguay: Mobile Telephony Investment(CAPEX) Evolution 2002 – 2006


59

33

4743

64

0

10

20

30

40

50

60

70

2002 2003 2004 2005 2006

Mill

ions

of U

S $


247

The Mobile telephony operators in Uruguay have invested approximately US $247 million in Capital Expenditures (CAPEX) between 2002 and 2006.

Figure 7.2.2. Uruguay: Investment / Mobile Telephony Sales vs.Investment / GDP Ratios Comparison 2002 - 2006


10,1% 9,4%11,3%

13,1% 13,1%

18,6%

23,5%

31,1%

25,0%

29,3%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

2002 2003 2004 2005 2006

Inve

stm

ent %


In the � gure above it is observed the relation between the Investment (CAPEX) as percentage of Mobile Telephony Total Sales, compared to the relation of Investment as percentage of Gross Domestic Product at national level for the 2002-2006 period.

On average, the Mobile Telephony industry has invested approximately 25.5% of its Sales, while the country total has invested approximately 11.4% of its GDP. The conclusion is that the Mobile Telephony investments were in proportion, much higher than those carried out by the rest of the national economy.


Figure 7.3.1. Uruguay: Annual Average Variation Rate ofCPI and Mobile Telephony ARPU 2002 - 2006

Source : INE and Balances Published by Companies and Convergencia Research estimations

-11,3%

10,7%8,9%

-7,1%

0,0%

6,4%4,7%

14,0%

19,4%

9,2%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI:

+ 65,4%


In the � ve years period 2002-2006, the accumulated in� ation was 65.4%. The years of highest in� ation were 2002 and 2003; signi� cant prices readjustment were produced in these years as a consequence of the currency devaluation and the exit of the crisis ocurred in 2002.

Regarding Mobile Telephony, the evolution of its average revenues per user (ARPU) was negative. A signi� cant decrease was observed in 2002 produced by the local currency devaluation. Eventhough, an increase of 10.7% was produced in 2003 as a consequence of a partial currency revaluation and improvements in consumption; it was not enough to reach a positive accumulated variation rate, therefore the total decrease of the period was 0.7%.

Figure 7.3.2. Uruguay: Accumulated Average Variation Rate of CPI and Mobile Telephony ARPU 2002 - 2006

Source : INE and Balances Published by Companies and Convergencia Research estimations

83,3%76,6%

70,8%

61,0%

53,7%

65,4%

-0,7%

41,7%

48,7%50,9%

69,2%

-10,0%

10,0%

30,0%

50,0%

70,0%

90,0%

110,0%

Furn

iture

Tran

sp.&

C

omun

icac

.

Food

Hou

sing CP

I

Oth

ers

Hea

lth

Rec

reat

ion

Clo

thin

g

Edu

catio

n

Mob

ileTe

leph

ony

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

Mob

ile T

elep

hony

Var

.: - 0

,7%

Based on the comparison of the accumulated variation rate of in� ation in 5 years, between the different components of Consumer Price Index and Mobile Telephony; it is observed the industry’s de� ationary character that accumulated a 0.7% decrease in the period, although all the components have shown variation in in� ation. The highest increase was registered by the Real State sector that has reached a rate of 83.3%.


Third Part:


Figure 7.4.1. Uruguay: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006


Direct: # 74614,5%

Indirect: # 4.40585,5%


In 2006, approximately 5,151 people were employed by the Mobile Telephony Industry in Uruguay.

Approximately 746 people were directly employed by Mobile Telephony operators. Meanwhile, the industry indirectly generated 4,405 additional job positions through the � rst link of its Value Chain.

It can be concluded that for each employee directly employed by the Mobile Telephony industry in 2006, 5,9 employees are indirectly demanded.

Figure 7.4.2. Uruguay: Indirect Employment generated byMobile Telephony in the 1st. link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 3.500 79,5%Sites Installing 250 5,7%Network: Radiobase + Troncal Network + Equipments 200 4,5%IT Systems 110 2,5%Electrical Feeding 95 2,2%Maintennance and Repairs 80 1,8%Terminals Logistic 80 1,8%Terminal Equipments 50 1,1%Mobile Contents (SVA) 20 0,5%Towers 20 0,5%Indirect Total Employment 4.405 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and its providers



Figure 7.5.1. Uruguay: Number of Mobile- Fixed Lines andInternet Connections Evolution 2001-2006

Source : Telecommunications Services Regulatory Unit (URSEC)

600

1.155

498514520

2.330

0

500

1.000

1.500

2.000

2.500

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006, Uruguay had a total of 2.3 million users while at the end of 2001 only 520 thousand users existed.

Fixed telephony: The � xed lines total was 987 thousand in 2006 remaining this number sFigure during all the period.

Internet: The total internet connections were of 210 thousand in 2006. This includes all Dial Up and Broadband connections.

Figure 7.5.2. Uruguay: Annual Variation Rate Mobile- Fixed Lines and Internet Connections Number 2001-2006

Source: URSEC

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

110,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


348,1%


3,8%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 348.1%. Fixed Telephony has practically not varied. Regarding Internet it only registers the 12.3% variation rate of 2005-2006.



ntributiioon to

Figure 7.5.3. Uruguay: Mobile- Fixed Lines and

Internet Connections Penetration 2001-2006

Source: ECLAC and URSEC

15,7% 15,5% 15,0% 18,1%

34,8%

70,1%

29,7%

6,3%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 it had reached penetration levels of 70.1%. In only 5 years, Mobile telephony modi� ed its penetration level from 15.7% in 2001 to 70.1% in 2006. Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during the whole period closing 2006 with a 29.7 % penetration. Internet connections were increased; closing 2006 its penetration level was 6.3%.


Third Part:

8. Venezuela


Figure 8.1.1. Venezuela: Supply and Demand Evolution ofMobile Telephony 2001-2006

Source : National Telecommunications Commission (CONATEL), Balances Published by Companies and Convergencia Research estimations

1.747

1.097 1.094

1.517

2.704

3.849

2.429

3.555

1.247

747899

1.480

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $



10.357

From 2001 to 2006, Mobile Telephony contributed to national GDP providing approximately US $12.008 million of goods and services. With respect to Demand, Mobile Telephony contributed to GDP purchasing approximately US $10.357 million of goods and services from 2001 to 2006.

Figure 8.1.2. Venezuela: Average Annual Variation Rate of Mobile

Source : ECLAC, Central Bank of Venezuela (BCV), CONATEL Balances Published by Companies and Convergencia Research estimations

-0,3%

-37,2%

38,8%

78,2%

42,4%

67,0%

-17,0%

94,8%

46,3%

-39,3%

-8,9% -7,8%

18,3% 10,3% 10,3%

-60,0%

-40,0%

-20,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


120,3%


140,1%

GDP: Var. ’06 vs. ‘01

21,1%

In the 2001-2006 period, the total /growth of Mobile Telephony was 120.3% for the Supply and 140.1% for the Demand. In the same period Venezuela’s economy, as a whole, registered a growth rate of 21.1%.

Figure 8.1.3. Venezuela: Accumulated Average Variation Rate ofMobile Telephony, GDP and Economic Sectors 2001-2006

Source : ECLAC, BCV, CONATEL, Balances Published by Companies and Convergencia Research estimations

42,8%34,3%

16,2% 12,8%

-3,6%

27,2%18,9%

120,3%

45,6%32,3% 21,1%

-20,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

140,0%

Mob

ileTe

leph

ony

Tran

sp. y

Com

unic

.

Finn

an.&

Bus

ines

s S

ervs

.

Agr

icul

ture

and

Trad

e

Oth

er S

ervi

ces

Pub

lic S

ervi

ces

GD

P

Man

ufac

.In

dust

ry

Min

ning

&Q

uarr

y

Con

stru

ctio

n

Oil

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in the 2001-2006 period are compared to the other economy sectors, it is observed that mobile services occupy by far the � rst place, registering a rate of 120.3% while Transports and Communications has been the second sector of highest growth registering a rate of 45.6%. Meanwhile, the Oil sector, the main activity in Venezuela decreased to 3.6%. On average, the national economy grew 21.1%.

Figure 8.1.4. Venezuela: Mobile Telephony aspercentage of GDP 001-2006


1,2% 1,3% 1,3%

1,9%

2,1%

1,4%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 1.4% in 2001. In 2006, the proportion had reached participation levels of 2.1%.



ntributiioon to


Figure 8.2.1. Venezuela: Mobile Telephony Investment(CAPEX) Evolution 2001-2006

Source : CONATEL, Balances Published by Companies and Convergencia Research estimations

430

238

85

196

469

795

0

100

200

300

400

500

600

700

800

900

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


2.213

The Mobile telephony operators in Venezuela have invested approximately US $2.213 million in Capital Expenditures (CAPEX) between 2001 and 2006.

Figure 8.2.2. Venezuela: Investment /Mobile Telephony Sales vs. Investment / GDP Ratios Comparison 2001-2006


20,0%

20,2%18,3%

15,5%

21,9%24,1%

24,6%

21,7%

7,8%

12,9%

20,6%

17,4%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %



On average, the Mobile Telephony industry has invested approximately 17.5% of its Sales, while the country total has invested approximately 20% of its GDP. The conclusion is that the Mobile Telephony investments were in proportion, slightly lower to those carried out by the rest of the national economy.


Figure 8.3.1. Venezuela: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : BCV, CONATEL, Balances Published by Companies and Convergencia Research estimations

-23,6%

30,2%

-16,0%

-7,5%

-20,2%

17,0%14,4%

19,2%

27,1%

31,2%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

2002 2003 2004 2005 2006Ann

ual V

aria

tion

%

Accum. Var. CPI:

+ 165,8%


In the period 2001-2006, Venezuela’s accumulated in� ation was 165.8%, the highest of the region. Eventhough, the country’s economy was inmerse in a in� ationary process the Mobile Telephony showed a de� ationary evolution regarding its revenues average per user (ARPU). Signi� cant decreases were observed year to year, except 2004. The variation in the period under analysis shows an accumulated decrease of 38.3%.

Figure 8.3.2. Venezuela: Average Annual Variation Rate of

CPI and Mobile Telephony ARPU 2001-2006

Source : BCV, CONATEL, Balances Published by Companies and Convergencia Research estimations

165,8%

-50,0%

0,0%

50,0%

100,0%

150,0%

200,0%

250,0%

300,0%

Food

Res

taur

ant &

Hot

els

Tran

spor

t

Bre

vage

s, A

lcoh

ol &

Tab

c.

Hou

sing

Equ

ipen

t

CP

I

Rec

reat

ion

Per

sona

l Ser

vice

s

Hea

lth

Edu

catio

n

Clo

thin

g

Hou

sing

Ser

vice

s

Com

mun

icat

ions

Ren

ting

Mob

ile T

elep

h.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

Mob

ile T

elep

hony

Var

.: -

38,3

%

Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed the industry’s de� ationary character that accumulated a 38.3% decrease, although all the components have shown a very signi� cant variation in in� ation. The highest increase was registered by the Food and Beverages sector that has reached a 268.7% rate.


Third Part:


Figure 8.4.1. Venezuela: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006


Direct: # 8.13127,3%Indirect:

# 21.61072,7%


The Mobile Telephony industry in Venezuela has employed approximately 29,741 people in 2006.

Approximately 8,131 people were directly employed by Mobile Telephony operators in 2006. While, the industry has indirectly generated 21,610 additional job positions through the � rst link of its Value Chain.


Figure 8.4.2. Venezuela: Indirect Employment generated byMobile Telephony in the 1st. link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 18.000 83,3%Network: Radiobase + Troncal Network + Equipments 700 3,2%Sites Installing 600 2,8%Maintennance and Repairs 520 2,4%Mobile Contents (SVA) 490 2,3%Towers 400 1,9%Terminals Logistic 350 1,6%IT Systems 300 1,4%Terminal Equipments 180 0,8%Electrical Feeding 70 0,3%Indirect Total Employment 21.610 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and its providers



Figure 8.5.1. Venezuela: Number of Mobile-Fixed Lines andInternet Connections Evolution 2001-2006

Source : CONATEL

8.421

12.496

7.0156.5426.473

18.789

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006, Venezuela had a total of 18.8 million users, while at the end of 2001 only 6.5 million users existed. Fixed telephony: The � xed lines total was 4.2 million in 2006, while in 2001 the total number was 2.7 million lines. Internet: The total internet connections were of 761 thousand in 2006. This includes all Dial Up and Broadband connections. A signi� cant growth is observed in the period under analysis, since only 305 thousand connections existed in 2001.

Figure 8.5.2. Venezuela: Annual Variation Rate Mobile-Fixed Lines and Internet Connections Number 2001-2006

Source : CONATEL

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


190,3%


149,6%


55,9%

The growth rate of Mobile Telephony users in the 2001-2006 period was 190.3%. Fixed Telephony has also shown an interesting growth, though lower registering a 55.9% rate. Regarding Internet service it has signi� cantly varied registering a growth rate of 149.6%.



ntributiioon to

Figure 8.5.3. Venezuela: Mobile- Fixed Lines andInternet Connections Penetration 2001-2006

Source : ECLAC and CONATEL

69,6%

47,1%

32,3%27,3%26,0%26,2%

15,6%2,8%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 Venezuela’s penetration levels had reached 69.6%. In only 5 years, Mobile telephony modi� ed its penetration level from 26.2% in 2001 to 69.9% in 2006. Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during all the period closing 2006 with a 15.6% penetration.

Internet connections were increased generating a penetration level of 2.8% closing 2006.


Third Part:

9. Costa Rica


Figure 9.1.1. Costa Rica: Supply and Demand Evolution ofMobile Telephony 2001-2006

Source : Convergencia Research estimations based on ICE Telecommunications Research

395425

482508

565

735

661713709

816

555498

0

100

200

300

400

500

600

700

800

900

1.000

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


3.109


3.952


Figure 9.1.2. Costa Rica: Average Annual Variation Rate ofMobile Telephony and GDP 2001-2006

Source : ECLAC, Central Bank of Costa Rica (BCCR) and Convergencia Research estimations based on ICE Telecommunications Research

13,4%

7,6% 5,5%

11,2%

30,1%

-13,2%

47,0%

-6,7%

7,8%

11,5%

2,9% 6,4% 4,3% 5,9%

7,9%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


86,1%Demand:

Var. ’06 vs. ‘01

43,2%

GDP: Var. ’06 vs. ‘01

30,5%

In the 2001-2006 period, the total growth of Mobile Telephony was 86.1% for the Supply and 43.2% for the Demand. In the same period Costa Rica’s economy, as a whole, registered a growth rate of 30.5%.

Figure 9.1.3. Costa Rica: Accumulated Average Variation Rate ofMobile Telephony, GDP and Economic Sectors 2001-2006

Source : ECLAC, BCCR and Convergencia Research estimations based on ICE Telecommunications Research

51,2%45,6%

18,7% 16,2% 14,4%

33,1%

20,3%

86,1%

71,4%

39,4%

30,5%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

Mob

ileTe

leph

ony

Tran

spor

t &C

omm

unic

atio

n

Min

ning

&Q

uarr

y

Man

ufac

.In

dust

ry

Con

stru

ctio

n

Finn

an.&

Bus

ines

s S

ervs

.

GD

P

Agr

icul

ture

,H

untin

g, e

tc.

Trad

e

Pub

lic S

ervi

ces

Oth

er S

ervi

ces

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in the 2001-2006 period are compared to the other economy sectors, it is observed that mobile services occupied the � rst place, registering a rate of 86.1% while Transport and Communications has been the second sector of highest growth registering a rate of 71.4%. On average, the national economy grew 30.5%.

Figure 9.1.4. Costa Rica: Mobile Telephony as percentage ofGDP 2001-2006

Source : ECLAC, BCCR and Convergencia Research estimations based on ICE Telecommunications Research.

2,5%2,8% 2,7% 2,8%

3,3%

2,4%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 3.3% in 2001. In 2006, the proportion reached participation levels of 2.4%.



ntributiioon to


Figure 9.2.1. Costa Rica: Mobile Telephony Investment (CAPEX)Evolution 2001-2006

Source : Convergencia Research estimations based on ICE Telecommunications Research.

264298

521

375352

270

0

100

200

300

400

500

600

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


2.081

The Mobile telephony operators in Costa Rica have invested approximately US $2.081 million in Capital Expenditures (CAPEX) during 2001 and 2006.

Figure 9.2.2. Costa Rica: Investment / Mobile Telephony Sales vs. Investment / GDP Relation Comparison B 2001-2006

Source : ECLAC, BCCR and Convergencia Research estimations based on Research of ICE Telecommunications

18,8%19,0%18,6%19,2%18,9%18,3%

67,0%70,2%

108,2%

73,8%

36,7%

62,3%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %


In the � gure above it is observed the relation between the Investment (CAPEX) as percentage of Mobile Telephony Total Sales, compared to the relation of Investment as percentage of Gross Domestic Product at national level for 2001-2006 period. On average, the Mobile Telephony industry has invested approximately 69.7% of its Sales, while the country total has invested approximately 18.8% of its GDP.

The investment effort of Mobile Telephony in Costa Rica is in proportion, much higher to those carried out by the rest of the national economy, even to that observed by Mobile Industry in the other region’s countries.


Figure 9.3.1. Costa Rica: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Note: The CPI, June of 2006Source : National Intitute of Statistics and Census (INEC) and Regulatory Authority for the Public Services (ARESEP)

-4,4%

-23,1%

-28,1%

0,8% 0,0%

6,3%

14,1%13,1%9,9%9,7%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI:

+ 65,3%

Accum. Var. Mobile Telephony:

- 46,7%

In the period 2001-2006, the accumulated in� ation in Costa Rica was 65.3%. Eventhough, the in� ationary process that Costa Rica’s economy was inmersed, the Mobile Telephony showed a 46.7% negative evolution of its revenues average per user (ARPU).

Figure 9.3.2. Costa Rica: Accumulated Average Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Nota: The CPI, June of 2006 Source : INEC and ARESEP

98,5%

68,5%61,8% 61,5% 57,9% 57,8% 56,4%

25,3%

-46,7%

65,3%

-60,0%

-40,0%

-20,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

Tran

spor

t

Food

& B

reva

ges

CP

I

Furn

iture

&A

cces

orie

s

Hou

sing

Oth

er g

oods

&se

rvic

es Hea

lth

Rec

reat

ion

&E

duca

tion

Clo

thin

g

Mob

ile T

elep

h.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01


Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is observed that Transports and Communications sector registered the highest increase reaching a rate of 98.5%. Mobile Telephony showed a negative variation of 46.7% in the period.


Third Part:

9.4. Mobile Telephony Contribution to Employment

Figure 9.4.1. Costa Rica: Total Employment (Direct + Indirect) generated by Mobile Telephony 2006



# 16.54877,0%


The Mobile Telephony industry in Costa Rica employed approximately 21,504 people in 2006.



Figure 9.4.2. Costa Rica: Indirect Employment generated byMobile Telephony in the 1st. link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 15.000 90,6%Terminal Equipments 800 4,8%Maintennance and Repairs 250 1,5%Sites Installing 200 1,2%Terminals Logistic 150 0,9%Network: Radiobase + Troncal Network + Equipm 90 0,5%IT Systems 38 0,2%Towers 15 0,1%Electrical Feeding 5 0,0%Indirect Total Employment 16.548 100,0%Source : Study carried out by Convergencia Research according to datagiven by Mobile Telephony Companies and its Providers



Figure 9.5.1. Costa Rica: Number of Mobile-Fixed Lines andInternet Connections Evolution 2001-2006

Source : ARESEP and RACSA

912 927756

460311

1.465

0

200

400

600

800

1.000

1.200

1.400

1.600

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006, Costa Rica had a total of 1.5 million users, while at the end of 2001 only 311 thousand users existed. Fixed telephony: The total � xed lines were 1.0 million in 2006; while the country counted with 820 thousand lines in 2001. Internet: The total internet connections were of 90 thousand in 2005 (last of� cial data). This includes all Dial Up and Broadband connections. A signi� cant growth is observed in the period under analysis, since only 29 thousand connections existed in 2001.

Figure 9.5.2. Costa Rica: Annual Variation Rate Mobile-Fixed Lines and Internet Connections Number 2001-2006

Source : ARESEP and RACSA

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

% V

aria

ción

Anu

al


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


370,6%


212,5%

Fixed: ’06 vs. ‘01 Var

27,6%

The growth rate of Mobile Telephony users in the 2001-2006 period was 370.6%. Fixed Telephony has also shown an interesting increase, a 27.6% rate. Regarding Internet service it has signi� cantly varied, registering a rate of 212.5%.



ntributiioon to

Figure 9.5.3. Costa Rica: Mobile- Fixed Lines andInternet Connections Penetration 2001-2006

Source : ECLAC, ARESEP and RACSA

33,3%

21,5%21,5%

18,1%

11,2%

7,8%

23,8%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 Costa Rica’s penetration levels had reached 33.3%. Anyway, this percentage is low compares to the regional average. In only 5 years, Mobile telephony modi� ed its penetration level from 7.8% in 2001 to 33.3% in 2006. Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during the whole period closing 2006 with 23.8% penetration. Internet connections were increased; although, closing 2005 a penetration level of 2.1% was registered.


Third Part:

10. El Salvador

10.1. Mobile Telephony Contributionto Gross Domestic Product

Figure 10.1.1. El Salvador: Supply and Demand Evolution ofMobile Telephony 2001-2006

Source : The General Superintendency of Electricity and Telecommunications (SIGET), and Convergencia Research estimations

194212 247

362

515

760

431

663

311

200207204

0

100

200

300

400

500

600

700

800

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $



2.016


Figure 10.1.2. El Salvador: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : ECLAC, Central Reserve Bank of El Salvador (BCR), SIGET and Convergencia Research estimations

16,7%

9,1%

46,3%42,3% 47,6%

55,3%

-3,1%

38,4%

53,8%

1,3%2,3% 2,3% 1,8% 2,8%

4,2%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


291,1%Demand:

Var. ’06 vs. ‘01

224,4%GDP: Var. ’06 vs. ‘01

14,1%

In the 2001-2006 period, the total growth of Mobile Telephony was 291.1% for the Supply and 224.4% for the Demand. In the same period El Salvador’s economy, as a whole, registered a growth rate of 14.1%.

. A2. Bras

Figure 10.1.3. El Salvador: Accumulated Average Variation Rate of Mobile Telephony, GDP and Economic Sectors 2001-2006

Source : ECLAC, BCR, SIGET and Convergencia Research estimations

24,1% 18,1%6,4% 6,1% -2,1%

14,1%13,1%

291,1%

25,3% 14,7% 13,6%

-50,0%

0,0%

50,0%

100,0%

150,0%

200,0%

250,0%

300,0%

350,0%

Mob

ileTe

leph

ony

Tran

sp. y

Com

unic

.

Pub

lic S

ervi

ces

Agr

icul

ture

,H

untin

g, e

tc.

Finn

an.&

Bus

ines

s S

ervs

.

GD

P

Trad

e

Man

ufac

.In

dust

ry

Con

stru

ctio

n

Oth

er S

ervi

ces

Min

ning

&Q

uarr

y

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in the 2001-2006 period are compared to the other economy sectors, it is observed that mobile services occupy by far the � rst place, registering a rate of 291.1% while Transport and Communications has been the second sector of highest growth registering a 25.3% increase. On average, the national economy grew 14.1%.

Figure 10.1.4. El Salvador: Mobile Telephony as percentageof GDP 2001-2006


1,5% 1,6%

2,3%

3,0%

4,2%

1,4%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

4,5%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 1.4% in 2001. In 2006, the proportion had been triplicated reaching participation levels of 4.2%.



ntributiioon to


Figure 10.2.1. El Salvador: Mobile Telephony Investment(CAPEX) Evolution 2001-2006

Source : SIGET and Convergencia Research estimations

54

2720

54

70

123

0

20

40

60

80

100

120

140

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


348

The Mobile telephony operators in El Salvador have invested approximately US $348 million in Capital Expenditures (CAPEX) between 2001 and 2006.

Figure 10.2.2. El Salvador: Investment / Mobile Telephony Sales vs. Investment / GDP Ratios Comparison 2001-2006


16,1%

15,4%15,6%16,7%16,6%16,4%

27,8%

12,8%

8,0%

15,0%

16,2%

13,6%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %



On average, the Mobile Telephony industry has invested approximately 15.6% of its Sales, while the country total has invested approximately 16.1% of its GDP. It can be concluded that the Mobile Telephony investments were in proportion similar to those carried out by the rest of the national economy..


Figure 10.3.1. El Salvador: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2004 - 2006

Source : General Direction for Census and Statistics (DIGESTYC) and SIGET

-25,7%

-1,0%2,0%

4,9%4,3%5,4%

-30,0%

-25,0%

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI:

+ 15,2%


- 25,0%

In the period 2004-2006, the accumulated in� ation in El Salvador was 15.2%.

Mobile Telephony has showed a de� ationary evolution regarding its revenues average per user (ARPU). A signi� cant decrease of 25.7% was observed in 2004. The variation in the period under analysis shows an accumulated decrease of 25%.

Figure 10.3.2. El Salvador: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2004 - 2006

Source : DIGESTYC and SIGET

15,2%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

Tran

spor

t

Alc

ohol

&Ta

bacc

o

Hou

sing

Equ

ipm

ent

Food

&B

ever

ages CP

I

Res

taur

ant &

Hot

els

Hea

lth

Pub

lic S

ervi

ces

Edu

catio

n

Rec

reat

ion

&C

ultu

re

Oth

ers

Clo

thin

g

Com

mun

icat

ions

Mob

ile T

elep

h.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01


Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed the industry’s de� ationary character that accumulated a 25% decrease in 3 years, eventhough all the components have showed variation in in� ations. The Transport sector was the highest increased component reaching an increase rate of 29.6%.


Third Part:


Figure 10.4.1. El Salvador: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006

Source : Study carried out by Convergencia Research according to data given by Telephony Companies and its providers


# 3.97873,0%


The Mobile Telephony industry in El Salvador employed approximately 5,451 people in 2006.



Figure 10.4.2. El Salvador: Indirect Employment generated byMobile Telephony in the 1st. link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 3.200 80,4%Sites Installing 400 10,1%Terminals Logistic 120 3,0%Maintennance and Repairs 70 1,8%Terminal Equipments 50 1,3%Network: Radiobase + Troncal Network + Equipments 40 1,0%IT Systems 40 1,0%Towers 25 0,6%Mobile Contents (SVA) 15 0,4%Others 15 0,4%Electrical Feeding 3 0,1%Indirect Total Employment 3.978 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and its providers



Figure 10.5.1. El Salvador: Number of Mobile-Fixed Linesand Internet Connections Evolution 2001-2006

Source : SIGET

1.833

2.412

1.150889858

3.852

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006, El Salvador had a total of 3. 9 million users, while at the end of 2001 only 858 thousand users existed.

Fixed telephony: The � xed lines total was 1.0 million at the end of 2006; while the total number were only 650 thousand lines in 2001.

Internet: The total internet connections were of 185 thousand in 2006. This includes all Dial Up and Broadband connections. A signi� cant growth was observed in the period under analysis, since only 71 thousand connections existed in 2001.

Figure 10.5.2. El Salvador: Annual Variation Rate Number ofMobile-Fixed Lines and Internet Connections 2001-2006

Source : SIGET

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

% V

aria

ción

Anu

al


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


349,0%Internet: Var. '06 vs. '01

161,3%


59,4%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 349%. Fixed Telephony has also shown a signi� cant increase reaching a 59.4% rate. Regarding Internet service it registered a signi� cant variation of 161.3% growth.



ntributiioon to

Figure 10.5.3. El Salvador: Mobile- Fixed Lines andInternet Connections Penetration 2001-2006

Source : ECLAC and SIGET

55,1%

35,1%

27,1%

17,3%13,6%13,4%

14,8%

2,6%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony represented the most important telecommunications service due its contribution to National Connectivity. At the end of 2006, El Salvador’s penetration levels had reached 55.1%.


Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during the whole period closing 2006 with a 14.8% penetration.

Internet connections were increased during the period reaching a penetration level close to 2.6% ending 2006.


Third Part:

11. Guatemala


Figure 11.1.1. Guatemala: Supply and Demand Evolutionof Mobile Telephony 2003 - 2006


327

620

1.089

1.325

1.003921

548

271

0

200

400

600

800

1.000

1.200

1.400

1.600

2003 2004 2005 2006

Mill

ions

of U

S $



2.743

From 2003 to 2006, the Mobile Telephony contributed to national GDP providing approximately US $3.360 million of goods and services.

With respect to Demand, the Mobile Telephony contributed to GDP purchasing approximately US $2.743 million of goods and services from 2003 to 2006.

Figure 11.1.2. Guatemala: Average Annual Variation Rate of Mobile Telephony and GDP 2003 - 2006

Source : ECLAC, Guatemala Bank (BANGUAT) Balances Published by Companies and Convergencia Research estimations

75,7%89,7%

21,7%

8,9%

68,2%

102,0%

3,2% 3,5%4,9%0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

2004 2005 2006

Ann

ual V

aria

tion

%


305,6%Demand: Var. ’06 vs. ‘03

270,1%GDP:

Var. ’06 vs. ‘0311,9%

In 2003-2006 period, the total growth of Mobile Telephony was 305.6% for the Supply and 270.1% for the Demand. In the same period Guatemala’s economy, as a whole, registered a growth rate of 11.9%.

. A2. Brasil

Figure 11.1.3. Guatemala: Accumulated Average Variation Rateof Mobile Telephony, GDP and Economic Sectors 2003 - 2006

Source : ECLAC, BANGUAT Balances Published by Companies and Convergencia Research estimations

23,0%8,2% 3,1%

-0,9%

11,9%10,4% 8,8%

305,58%

35,1%11,3% 8,8%

-50,00%

0,00%

50,00%

100,00%

150,00%

200,00%

250,00%

300,00%

350,00%

Mob

ileTe

leph

ony

Tran

sp. y

Com

mun

ic.

Con

stru

ctio

n

GD

P

Finn

an.&

Bus

ines

s S

ervs

.

Pub

lic S

ervi

ces

Man

ufac

.In

dust

ry

Trad

e

Agr

icul

ture

,H

untin

g, e

tc.

Oth

er S

ervi

ces

Min

ning

&Q

uarr

y

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

03

If growth rates of Mobile Telephony accumulated in 2003-2006 period are compared to the other economy sectors, it is observed that mobile services occupy by far the � rst place, registering a rate of 305.6% while Transports and Communications has been the second sector of highest growth registering a rate of 35.1%. On average, the national economy grew 11.9%.

Figure 11.1.4. Guatemala: Mobile Telephony as percentage ofGDP 2003-2006

Source : ECLAC, BANGUAT, Balances Published by Companies and Convergencia Research estimations

2,6%

4,0%4,3%

1,5%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

4,5%

5,0%

2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 1.5% in 2003. In 2006, the proportion had been triplicated reaching 4.3% in participation levels.



ntributiioon to


Figure 11.2.1. Guatemala: Mobile Telephony Investment

(CAPEX) Evolution 2003 – 2006


51

133

198

283

0

50

100

150

200

250

300

2003 2004 2005 2006

Mill

ions

of U

S $


665

The Mobile telephony operators in Guatemala have invested approximately US $665 million in Capital Expenditures (CAPEX) between 2003 and 2006.

Figure 11.2.2. Guatemala: Investment / Mobile Telephony Sales vs. Investment / GDP Ratios Comparison 2003 - 2006

Source : ECLAC, BANGUAT Balances Published by Companies and Convergencia Research estimations

18,6%18,3%18,3%

18,7%

15,8%

21,5%

18,2%

21,3%

14,0%

16,0%

18,0%

20,0%

22,0%

24,0%

2003 2004 2005 2006

Inve

stm

ent %





Figure 11.3.1. Guatemala: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2004 - 2006

Source : Guatemala’s National Intitute of Statistics (INE), and Guatemala’s Superintendence of Telecommunications (SIT)

-6,6%

3,2%

5,8%

8,6%9,2%

5,9%6,3%

-10,0%

-8,0%

-6,0%

-4,0%

-2,0%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI '04 to '06:

+ 14,9%

Accum. Var. '04 to '06 Mobile Telephony:

- 3,7%

In the period 2004-2006, Guatemala’s accumulated in� ation was 14.9%.

Mobile Telephony has shown a de� ationary evolution regarding its revenues average per user (ARPU). A signi� cant decrease of 6.6% was observed in 2005. The variation in the period under analysis shows an accumulated decrease of 3.7.

Figure 11.3.2. Guatemala: Accumulated Average Variation Rate ofCPI and Mobile Telephony ARPU 2004 - 2006

Source : INE and SIT

-3,7%

9,7%9,8%11,0%11,9%

19,7%

16,3% 14,9%11,1%

6,1%

13,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

Food

& B

ever

ages

Tran

sp.&

com

mun

icat

ions CP

I

Hea

lth

Hou

sing

Exp

ense

s

Edu

catio

n

Rec

reat

ion

& C

ultu

re

Oth

ers

urni

ture

& H

ousi

ng e

quip

men

t

Clo

thin

g &

Sho

es

Mob

ile T

elep

h.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

04

Mob

ile T

elep

hony

Var

.: - 3

,7%

Based on the comparison of the accumulated variation rate of in� ation in the period, between the different components of Consumer Price Index and Mobile Telephony; it is observed the industry’s de� ationary character that accumulated a 3.7% decrease in 3 years, although all the components have shown variation in in� ations. The highest increase was registered by the Food and Beverages sector that reached a 19.7% rate.


Third Part:


Figure 11.4.1. Guatemala: Total Employment (Direct + Indirect) generated by Mobile Telephony 2006


Direct: # 2.1309,1%

Indirect: # 21.36090,9%


Mobile Telephony industry in Guatemala has employed approximately 23,490 people in 2006.


It can be concluded that for each employee directly employed by Mobile telephony, 10 employees are indirectly demanded.

Figure 11.4.2. Guatemala: Indirect Employment generated byMobile Telephony in the 1st. link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 20.250 94,8%Sites Installing 300 1,4%Maintennance and Repairs 200 0,9%IT Systems 200 0,9%Towers 200 0,9%Network: Radiobase + Troncal Network + Equipments 100 0,5%Terminal Equipments 90 0,4%Mobile Contents (SVA) 15 0,1%Electrical Feeding 5 0,0%Indirect Total Employment 21.360 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and its providers



Figure 11.5.1. Guatemala: Number of Mobile-Fixed Lines and Internet Connections Evolution 2001-2001-2006

Note: Internet connections only refers to Broadband connectionsSource : SIT and Convergencia Research estimations

3.168

4.510

2.0351.577

1.146

7.179

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006 Guatemala had a total of 7.2 million users, while at the end of 2001 only 1.1 million users existed.

Fixed telephony: The � xed lines total was 1.4 million in 2006; while the total number only increased to 756 thousand lines in 2001.

Internet: The total Broadband internet connections were of 75 thousand in 2006.

Figure 11.5.2. Guatemala: Annual Variation Rate Number of Mobile-Fixed Lines 2001-2006

Source : SIT

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

% V

aria

ción

Anu

al


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


526,2%


62,7%

The growth rate of Mobile Telephony users in the 2001-2006 period was 526.2%. Fixed Telephony has also shown an interesting growth, though lower registering a rate 62.7%.



ntributiioon to

Figure 11.5.3. Guatemala: Mobile- Fixed Lines andInternet Connections Penetration 2001-2006

Note: Internet connections only refers to Broadband connectionsSource : ECLAC, SIT and Convergencia Research estimations

55,1%

35,5%

25,6%

16,8%13,4%

10,0%

10,4%0,6%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006, Guatemala’s penetration levels had reached 55.1%.

In only 5 years, Mobile telephony modi� ed its penetration level from 10% in 2001 to 55.1% in 2006.

Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during all the period closing 2006 with a 10.4% penetration.

Broadband Internet connections presented a moderate growth generating a penetration level of 0.6% closing 2006.


Third Part:

12. Panama


Figure 12.1.1. Panama: Supply and Demand Evolution ofMobile Telephony 2001-2006


181192

217

330

400

447

302

335

223

149129127

0

50

100

150

200

250

300

350

400

450

500

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


1.767Demand:


1.265



Figure 12.1.2. Panama: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : ECLAC, Ministry of Economy and Finance (MEF), Balances Published by Companies and Convergencia Research estimations

13,3%5,8%

51,9%

21,3%11,8%

49,8%

15,7%

35,2%

11,1%

1,7%

2,2%4,2%

7,5% 6,9%8,1%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


147,0%Demand: Var. ’06 vs. ‘01

164,9%

GDP: Var. ’06 vs. ‘01

32,4%

In the 2001-2006 period, the total growth of Mobile Telephony was 147% for the Supply and 164.9% for the Demand. In the same period Panama’s economy, as a whole, registered a growth rate of 32.4%.

Figure 12.1.3. Panama: Accumulated Average Variation Rate ofMobile Telephony, GDP and Economic Sectors 2001-2006

Source : ECLAC, MEF, Companies Researches and Convergencia Research estimations

66,8% 63,2%

21,6% 19,3%

3,9%

32,4%22,7%

147,0%

110,0%

37,9%

25,1%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

140,0%

160,0%

Mob

ileTe

leph

ony

Min

ning

&Q

uarr

y

Con

stru

ctio

n

Tran

sp. y

Com

mun

ic.

Trad

e

GD

P

Pub

lic S

ervi

ces

Finn

an.&

Bus

ines

s S

ervs

.

Agr

icul

ture

,H

untin

g, e

tc.

Oth

er S

ervi

ces

Man

ufac

.In

dust

ry

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in the 2001-2006 period are compared to the other economy sectors, it is observed that mobile services occupy by far the � rst place, registering a rate of 147.6% while Minning and Quarrying has been the second sector of highest growth registering a rate of 110%. On average, the national economy grew 32.4%.

Figure 12.1.4. Panama: Mobile Telephony as percentageof GDP 2001-2006


1,6%1,7%

2,3%

2,6% 2,6%

1,5%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 1.5% in 2001. In 2006, the proportion has multiplied 1.7 times reaching 2.6% participation levels.



ntributiioon to


Figure 12.2.1. Panama: Mobile Telephony Investment (CAPEX)Evolution 2001-2006


2419 21

36

4945

0

10

20

30

40

50

60

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


193

The Mobile telephony operators in Panama have invested approximately US $193 million in Capital Expenditures (CAPEX) between 2001 and 2006.

Figure 12.2.2. Panama: Investment / Mobile Telephony Sales vs. Investment / GDP Ratios Comparison 2001-2006


15,8%16,8%16,6%17,1%

13,6%

15,2%

13,0%

10,1% 9,7%10,8%

10,0%

12,3%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

18,0%

20,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %



On average, the Mobile Telephony industry has invested approximately 11% of its Sales, while the country total has invested approximately 15.8% of its GDP. The conclusion is that the Mobile Telephony investments were in proportion, slightly lower to those carried out by the rest of the national economy.


Figure 12.3.1. Panama: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2002 - 2006

Source : General Auditor of the Republic and Division of Statistics and Census (Auditor), Companies Researches and Convergencia Research estimations

-6,9%

-21,3%

-5,2%

-14,3%

3,5%2,9%0,4%0,1%

-30,0%

-25,0%

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI :

+ 7,0%


- 40,4%

In the � ve years period 2001-2006, Panama’s accumulated in� ation was 7% with sFigure considered annual variation rates.

Regarding Mobile Telephony its revenues average per user evolution (ARPU) was negative. A signi� cant decrease of 21.3% was observed in 2005; accumulated a fall of 40.4% in all the period.

Figure 12.3.2. Panama: Accumulated Average Variation Rate ofCPI and Mobile Telephony ARPU 2002 - 2006

Source : General Auditor of the Republic, Companies Researches and Convergencia Research estimations

-40,4%

-0,2%2,1%3,4%

5,5%

17,3%

12,9%9,6%

4,0%

-7,0%

7,0%

-50,0%

-40,0%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

Tran

spor

t

Hou

sing

& P

ublic

Ser

vs.

Food

&B

ever

ages CP

I

Edu

catio

n

Hou

sing

Man

teni

ence

Hea

lth

Oth

ers

Rec

reat

ion

Clo

thin

g &

Sho

es

Mob

ile T

elep

h.

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01


Based on the comparison of the accumulated variation rate of in� ation in 5 years, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed the industry’s de� ationary character that accumulated a 40.4% decrease in the period, although all the components have shown variation in in� ations. The highest increase was registered by the Transport sector reaching a 17.3% rate.


Third Part:


Figure 12.4.1. Panama: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006

Source : Study carried out by Convergencia Research according to data given by

Mobile Telephony Companies and its providers

Direct: # 2789,3%

Indirect: # 2.71890,7%


The Mobile Telephony industry in Panama employed approximately 2,996 people in 2006.

Approximately 278 people are directly employed by Mobile Telephony operators. While, the industry has indirectly generated 2,718 additional job positions through the � rst link of its Value Chain.


Figure 12.4.2. Panama: Indirect Employment generated byMobile Telephony in the 1st. Link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 2.200 80,9%Sites Installing 200 7,4%Maintennance and Repairs 80 2,9%Network: Radiobase + Troncal Network + Equipments 75 2,8%Terminals Logistic 60 2,2%IT Systems 50 1,8%Terminal Equipments 35 1,3%Mobile Contents (SVA) 15 0,6%Electrical Feeding 3 0,1%Indirect Total Employment 2.718 100,0%Source : Study carried out by Convergencia Research according to data given by MobileTelephony Companies and its providers

It is observed that from the total employment generated by Mobile Telephony through the � rst link of its Value Chain, 80.9% is destined to an outsourcing Sales Team. It is also important the 7.4% employment level generated among the Sites Installers.


Figure 12.5.1. Panama: Number of Mobile-Fixed Lines andInternet Connections Evolution 2001-2006

Source : National Authority of Public Services (ANSEP)

1.260

1.749

692526475

2.174

0

500

1.000

1.500

2.000

2.500

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006 Panama had a total of 2.2 million users, while at the end of 2001 only 475 thousand users existed.

Fixed telephony: The � xed lines total was 433 thousand in 2006; signi� cant growth variations in the period under analysis were not observed.

Internet: The total internet connections were of 87 thousand in 2006. This includes all Dial Up and Broadband connections. A signi� cant growth is observed in the period under analysis, since only 49 thousand connections existed in 2001.

Figure 12.5.2. Panama: Annual Variation Rate Number ofMobile-Fixed Lines and Internet Connections 2001-2006

Source : ANSEP

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

% V

aria

ción

Anu

al


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


357,6%


78,1%


13,4%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 357.6%; much higher than the evolution of Fixed Telephony that has been increaseed in 13.4%. Regarding Internet growth it has been signi� cant registering a 78.1% rate.



ntributiioon to

Figure 12.5.3. Panama: Mobile, Fixed Lines andInternet Connections Penetration 2001-2006

Source : ECLAC and ANSEP

66,2%

54,2%

39,7%

22,2%17,2%15,8%

13,2%2,6%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



The Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 Panama’s penetration levels had reached 66.2%.


Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during all the period closing 2006 with a penetration of 13.2%.

The Internet connections growth increased penetration level to 2.6% closing 2006.


Third Part:

13. Mexico


Figure 13.1.1. Mexico: Supply and Demand Evolution ofMobile Telephony 2001-2006


5.777

6.9828.437

10.900

12.993

15.931

10.626 10.358

8.915

7.411

6.0035.124

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $



48.436



Figure 13.1.2. Mexico: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : ECLAC, The National Institute of Statistics, Geography and Informatics (INEGI) Balances and Researches of Companies and Convergencia Research estimations

20,8%

20,9%

29,2%

19,2%

22,6%

20,3%

23,5%

19,2%

-2,5%

17,2%

0,8% 1,4%4,2% 2,8%

4,8%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


175,8%


102,2%

GDP: Var. ’06 vs. ‘01

14,6%

In the 2001-2006 period, the total growth of Mobile Telephony was 175.8% for the Supply and 102.2% for the Demand. In the same period Mexico’s economy, as a whole, registered a growth rate of 14.6%.

Figure 13.1.3. Mexico: Accumulated Average Variation Rate ofMobile Telephony, GDP and Economic Sectors 2001-2006

Source : ECLAC, INEGI, Balances and Researches of Companies and Convergencia Research estimations

25,5% 23,6%

8,7% 8,3% 5,7%14,1% 12,4%

175,8%

36,3% 14,6%12,5%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

140,0%

160,0%

180,0%

200,0%

Mob

ileTe

leph

ony

Tran

sp. y

Com

mun

ic.

Finn

an.&

Bus

ines

s S

ervs

.

Con

stru

ctio

n

GD

P

Trad

e

Pub

lic S

ervi

ces

Min

ning

&Q

uarr

y

Agr

icul

ture

,H

untin

g, e

tc.

Man

ufac

.In

dust

ry

Oth

er S

ervi

ces

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

If growth rates of Mobile Telephony accumulated in the 2001-2006 period are compared to the other economy sectors, it is observed that mobile services occupy by far the � rst place, registering a rate of 36.3% while Transports and Communications has been the second sector of highest growth registering a rate of 45.6%. On average, the national economy grew 14.6%.

Figure 13.1.4. Mexico: Mobile Telephony as percentageof GDP 2001-2006


1,1%

1,3%

1,6%1,7%

1,9%

0,9%

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

1,6%

1,8%

2,0%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 0.9% in 2001. In 2006, the proportion has been duplicated reaching levels of 1.9% participation.



ntributiioon to


Figure 13.2.1. Mexico: Mobile Telephony Investment (CAPEX)Evolution 2001-2006


743 759

1.3411.205

1.791

1.224

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2.000

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


7.063

The Mobile telephony operators in Mexico have invested approximately US $7.063 million in Capital Expenditures (CAPEX) between 2001 and 2006.

Figure 13.2.2. Mexico: Investment / Mobile Telephony Sales vs. Investment / GDP Ratios Comparison 2001-2006


19,4%19,3%19,6%18,9%19,3%20,0%

12,9%

10,9%

15,9%

11,1%

7,7%

13,8%

5,0%

7,0%

9,0%

11,0%

13,0%

15,0%

17,0%

19,0%

21,0%

23,0%

25,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %



On average, the Mobile Telephony industry has invested approximately 12% of its Sales, while the country total has invested approximately 19.4% of its GDP. The conclusion is that the Mobile Telephony investments were in proportion, lower to those carried out by the rest of the national economy.


Figure 13.3.1. Mexico: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : Bank of Mexico (Banxico), Federal Comission of Telecommunications (COFETEL), Balances and Researches of Companies and Convergencia Research estimations

1,6%

2,0%

0,4% 0,4%

4,1%

3,3%

5,2%

4,0%

5,7%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI :

+ 24,3%


4,4%

In the period 2001-2006, Mexico’s accumulated in� ation was 24.3%.

The evolution shown by Mobile Telephony regarding its revenues average per user (ARPU) was very below the CPI. The variation in the period under analysis shows an accumulated growth of only 4.4%.

Figure 13.3.2. Mexico: Accumulated Average Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : Banxico, COFETEL, Balances and Researches of Companies and Convergencia Research estimations

31,1%29,3% 28,5% 28,3%

20,3% 19,6%

6,3%3,0% 4,4%

24,3%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

Edu

catio

n &

Rec

reat

ion

Food

&B

ever

ages

Oth

er s

ervi

ces

Hou

sing CP

I

Tran

spor

tatio

n

Hea

lth &

Per

sona

l car

e

Clo

thin

g &

Sho

es

Furn

iture

&D

omes

ticA

cces

orie

s

Mob

ileTe

leph

ony

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

Mob

ile T

elep

hony

Var

. : 4,4

%

Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is clearly observed that Mobile Telephony has increased its revenues average very slightly accumulating a positive variation of 4.4%, although all the components of CPI have shown signi� cant variation in in� ations. The highest increase was registered by the Education and Recreation sector reaching a rate of 31.1%.


Third Part:


Figure 13.4.1. Mexico: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006


Direct: # 30.07534,4%

Indirect: # 57.40665,6%


The Mobile Telephony industry in Mexico employed approximately 87.481 people in 2006.

Approximately 30.075 people were directly employed by Mobile Telephony operators in 2006. While, the industry has indirectly generated 57.406 additional job positions through the � rst link of its Value Chain.


Figure 13.4.2. Mexico: Indirect Employment generated byMobile Telephony in the 1st. link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 33.448 58,3%Terminal Equipments 10.308 18,0%Network: Radiobase + Troncal Network + Equipments 4.600 8,0%Sites Installing 4.000 7,0%Mobile Contents (SVA) 2.100 3,7%Terminals Logistic 1.200 2,1%IT Systems 1.150 2,0%Electrical Feeding 250 0,4%Towers 250 0,4%Others 100 0,2%Indirect Total Employment 57.406 100,0%Source : Study carried out by Convergencia Research according to data given by Mobiles Telephony Companies and its providers

It is observed that from the total employment generated by Mobile Telephony through the � rst link of its Value Chain, 58.3% is destined to an outsourcing Sales Team. It is also important the employment level generated among network providers (radio bases, troncal network and equipments) and Sites Installers.

Mexico together with Brazil are the only producer countries of Terminal Equipments in Latin America and the Caribbean; these are the only countries that have this kind of Industry. Approximately, 10.399 people were employed by this activity in 2006.


Figure 13.5.1. Mexico: Mobile-Fixed Lines andInternet Connections Number Evolution 2001-2006

Source : COFETEL and INEGI

38.451

47.129

30.09825.928

21.758

57.016

0

10.000

20.000

30.000

40.000

50.000

60.000

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006 Mexico had a total of 57.1 million users, while at the end of 2001 only 21.8 million users existed. Mexico is the second country with the higher number of mobile users in the region behind Brazil.

Fixed telephony: The � xed lines total was 19.9 million in 2006; while in 2001 the total number raised to 13.8 million lines.

Internet: The total internet connections was 4.6 million closing 2006; all Dial-up and Broadband connections are included. An important growth is observed in the period under analysis, since in 2001 1.9 million connections only existed.

Figure 13.5.2. Mexico: Annual Variation Rate of Mobile-Fixed Linesand Internet Connections Number 2001-2006

Source : COFETEL and INEGI

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

% V

aria

ción

Anu

al


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


162,0%


146,4%


44,2%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 162%. Fixed Telephony has also shown an interesting growth reaching a 44.2% rate. Regarding Internet service has signi� cantly varied registering a growth rate of 146.4%.



ntributiioon to

Figure 13.5.3. Mexico: Mobile- Fixed Lines andInternet Connections Penetration 2001-2006

Source : ECLAC, COFETEL and INEGI

54,2%

45,2%

37,2%

29,4%25,5%

21,6%

18,9%

4,4%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 Mexico’s penetration levels had reached 54.2%.


Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during all the period closing 2006 with an 18.9% penetration.

Internet connections were increased closing 2006 with a penetration level of 4.4%.


Third Part:

14. Jamaica


Figure 14.1.1. Jamaica: Supply and Demand Evolution ofMobile Telephony 2003 - 2006

Source: Companies Reports and Balances and Convergencia Research estimations

242257 266

299278

346344347

0

50

100

150

200

250

300

350

400

450

500

2003 2004 2005 2006

Mill

ions

of U

S $


1.065


1.315



Figure 14.1.2. Jamaica: Average Annual Variation Rate of Mobile Telephony and GDP 2003 - 2006

Source : ECLAC, Bank of Jamaica (BOJ), The Economist, Balances and Researches of Companies and Convergencia Research estimations

3,6%

6,5%

12,3%

-19,7%

0,7%-1,1%

0,9% 1,4%2,6%

-25,0%

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

2004 2005 2006

Ann

ual V

aria

tion

%


23,9%


-20,0%

GDP: Var. ’06 vs. ‘03

5,0%

In the 2003-2006 period, the total increase of Mobile Telephony was 23.9% for the Supply and -20% for the Demand. In the same period Jamaica’s economy, as a whole, registered a growth rate of 5%.

During the years 2003, 2004 and 2005, the Mobile Telephony industry carried out an important investment effort as consequence of the market opening (see � gure 14.2.2.) what produced a signi� cant increase in goods and services demand. In 2006, the OPEX and CAPEX levels represented standard levels of the industry.

. A2. Brasil

Figure 14.1.3. Jamaica: Mobile Telephony as percentageof GDP 2003 - 2006

Source : ECLAC, BOJ, The Economist, Balances and Researches of Companies and Convergencia Research estimations

2,9%2,7%

2,9%2,9%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP remained in 2.9% from 2003 to 2006.

14.2. Mobile Telephony Contributionto National Invesitment

Figure 14.2.1. Jamaica: Mobile Telephony Investment (CAPEX)Evolution 2003 – 2006

Source : Companies reports and balances and Convergencia Research estimations

178

146 142

66

0

20

40

60

80

100

120

140

160

180

200

2003 2004 2005 2006

Mill

ions

of U

S $


531

The Mobile telephony operators in Jamaica have invested approximately US $531 million in Capital Expenditures (CAPEX) between 2003 and 2006 period.



ntributiioon to

Figure 14.2.2. Jamaica: Investment / Mobile Telephony Sales vs. Investment / GDP Relation Comparison 2003 - 2006

Source : Companies reports and balances and Convergencia Research estimations

178

146 142

66

0

20

40

60

80

100

120

140

160

180

200

2003 2004 2005 2006

Mill

ions

of U

S $


531

In the � gure above it is observed the relation between the Investment (CAPEX) as percentage of Mobile Telephony Total Sales compared to the relation of Investment as percentage of Gross Domestic Product at national level for 2001-2006 period.

On average, the Mobile Telephony industry has invested approximately 51.3% of its Sales, while the country total has invested approximately 30.3% of its GDP. The conclusion is that the Mobile Telephony investments were in proportion higher than those carried out by the rest of the national economy and even higher than those carried out by the industry in the rest of the region’s countries, except Costa Rica.


Figure 14.3.1. Jamaica: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : Statistical Institute of Jamaica (STATINJA) and Office of Utilities Regulation (OUR)

-4,4%

-14,3%

18,6%

0,0%

5,8%

12,9%13,7%

14,1%7,3%

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI :

+ 66,2%

Accum. Var. Mobile Telephony: -2,8%

In the 5 years period 2001-2006, Jamaica’s accumulated in� ation was 66.2%.

In spite of the in� ationary process in which the Mobile Telephony was developed it showed a de� ationary evolution regarding its revenues average per user (ARPU). The variation in the period under analysis shows an accumulated decrease of 2.8%.

Figure 14.3.2. Jamaica: Accumulated Average Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : STATINJA and OUR

98,5%

79,4%74,7%

64,8%

50,5%46,4%

29,1%

66,2%65,4%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

Hou

sing

Fuel

Tran

spor

tatio

n

CP

I

Goo

ds &

Ser

vice

s

Food

&B

ever

ages

Furn

iture

Hea

lth &

Per

sona

l ser

vs.

Clo

thin

g &

Sho

es

Mob

ileTe

leph

ony

Acc

umul

ated

Var

iatio

n %

’06

vs. ‘

01

Mob

ile T

elep

hony

Var

.: -

28%

Based on the comparison of the accumulated variation rate of in� ation, between the different components of Consumer Price Index and Mobile Telephony; it is observed that Mobile Telephony has accumulated a 2.8% negative variation, although all the CPI components have shown signi� cant variation in in� ations. The highest increase was registered by Housing sector that has reached a 98.5% rate.


Figure 14.4.1. Jamaica: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006

Source : Study carried out by Convergencia Research according to data given byMobile Telephony Companies and its providers

Direct: # 43521,8%

Indirect: # 1.56178,2%


The Mobile Telephony industry in Jamaica employed approximately 1.996 people in 2006.

Approximately 435 people are directly employed by Mobile Telephony operators. While, the industry has indirectly generated 1.561 additional job positions through the � rst link of its Value Chain.

It can be concluded that for each employee directly employed by the Mobile telephony, 3.6 employees were indirectly demanded.

Var.

Tele

foní

a Ce

lula

r: -2

,8%


Third Part:


Figure 14.5.1. Jamaica: Mobile-Fixed Lines Number Evolution2001-2006

Source : OUR, International Telecommunications Union (ITU), Convergencia Research estimations

2.006 2.084

1.800

1.400

680

2.147

0

500

1.000

1.500

2.000

2.500

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006 Jamaica had a total of 2.1 million users, while at the end of 2001 only 680 thousand users existed.

Fixed telephony: The � xed lines total was 490 thousand closing 2006; while in 2001 the total number was 530 thousand lines.

Figure 14.5.2. Jamaica: Annual Variation Rate ofMobile-Fixed Lines Number 2001-2006

Source : OUR, ITU and Convergencia Research estimations

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

% V

aria

ción

Anu

al


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%

-10,0%

10,0%

30,0%

50,0%

70,0%

90,0%

110,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


215,7%


- 7,5%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 215.7%; while Fixed Telephony has observed a 7.5% decrease.

Figure 14.5.3. Jamaica: Mobile- Fixed Lines Penetration 2001-2006

Source : OUR, ITU and Convergencia Research estimations

79,5%77,7%75,3%

68,0%

53,3%

26,1%

18,2%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%

Mobile Lines

Fixed Lines

The Mobile Telephony represented in 2006 the most important telecommunications service regarding its contribution to National Connectivity. At the end of 2006 Jamaica’s penetration levels had reached 79.5%; one of the region’s higher levels.





ntributiioon to

15. Puerto Rico


Figure 15.1.1. Puerto Rico: Supply and Demand Evolution of Mobile Telephony 2001-2006

Source: Companies Reports and Balances and Convergencia Research estimations

880 896 941

1.032

1.141

1.232

1.0551.134

933

815802807

0

200

400

600

800

1.000

1.200

1.400

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


6.121Demand:


5.546



Figure 15.1.2. Puerto Rico: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : Puerto Rico's Planning Board, Program of Economic and Social Planning (JPPPES), Balances andResearches of Companies and Convergencia Research estimations

5,0%

1,8%

9,7%10,6%

7,9%

14,5%

1,7%

13,1%

7,6%

-0,6%

0,9%

0,1%

3,1%

0,3%0,7%

-2,0%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


40,0%


40,6%GDP:

Var. ’06 vs. ‘01

5,1%

In the 2001-2006 period, the total increase of Mobile Telephony was 40% for the Supply and 40.6% for the Demand. In the same period Puerto Rico’s economy, as a whole, registered a growth rate of 5.1%.

Figure 15.1.3. Puerto Rico: Mobile Telephony as percentageof GDP 2001-2006

Source : JPPPES, Balances and Researches of Companies and Convergencia Research estimations

1,3% 1,3%1,3% 1,4%

1,4%

1,3%

0,0%

0,5%

1,0%

1,5%

2,0%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 1.3% in 2001. In 2006, the proportion had not signi� cantly varied reaching 1.4% levels of participation.


Figure 15.2.1. Puerto Rico: Mobile Telephony Investment(CAPEX) Evolution 2001-2006

Source : Companies Reports and Balances and Convergencia Research estimations

171185

165182

248 256

0

50

100

150

200

250

300

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


1.207

The Mobile telephony operators in Puerto Rico have invested approximately US $1.207 million in Capital Expenditures (CAPEX) between 2001 and 2006.


Third Part:

Figure 15.2.2. Puerto Rico: Investment / Mobile Telephony Sales vs. Investment / GDP Ratios Comparison 2001-2006

Source: JPPPES, Balances and Researches of Companies and Convergencia Research estimations

15,5%

14,4%15,1%15,2%

15,9%

16,9%

19,4%

20,7%

17,6% 17,6%

20,8%21,7%

10,0%

12,0%

14,0%

16,0%

18,0%

20,0%

22,0%

24,0%

26,0%

2001 2002 2003 2004 2005 2006

Inve

stm

ent %


In the � gure above it is observed the relation between the Investment (CAPEX) as percentage of Mobile Telephony Total Sales compared to the relation of Investment as percentage of Gross Domestic Product at national level for the 2001-2006 period.



Figure 15.3.1. Puerto Rico: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source : JPPPES, Balances and Reasearches of Companies and Convergencia Research estimations

-0,7%

2,6%

0,9%1,7%

0,4%

14,7%13,8%

11,9%

7,9%

6,1%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI :

+ 67,2%


+ 4,8%

In the period 2001-2006, Puerto Rico’s accumulated in� ation was 67.2%.

The evolution that Mobile Telephony has shown regarding its revenues average per user (ARPU) is very below the CPI. The variation in the period under analysis shows an accumulated growth of only 4.8%.


Figure 15.4.1. Puerto Rico: Total Employment (Direct + Indirect)generated by Mobile Telephony 2006


Direct: # 71017,6%

Indirect: # 3.33082,4%


The Mobile Telephony industry in Puerto Rico employed approximately 4.040 people in 2006.

Approximately 710 people were directly employed by Mobile Telephony operators in 2006. While, the industry has indirectly generated 3.330 additional job positions through the � rst link of its Value Chain.


Figure 15.4.2. Puerto Rico: Indirect Employment generated by

Mobile Telephony in the 1st. link of its Value Chain 2006Providers of : # %

Outsourcing Sales Team (Sales Agent) 2.200 66,1%Maintennance and Repairs 500 15,0%Network: Radiobase + Troncal Network + Equipments 280 8,4%Terminals Logistic 130 3,9%Terminal Equipments 120 3,6%IT Systems 50 1,5%Others 50 1,5%Indirect Total Employment 3.330 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and its providers

It is observed that from the total employment generated by Mobile Telephony through the � rst link of its Value Chain, 66.1% is destined to an outsourcing Sales Team. It is also important the employment level generated among network providers (radio bases, troncal network and equipments) and Repairment and Maintenance.



ntributiioon to


Figure 15.5.1. Puerto Rico: Mobiles Lines Evolution Number2001-2006


1.772 1.8331.6461.6201.561

1.938

0

400

800

1.200

1.600

2.000

2.400

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es

In 2006 Puerto Rico had a total of 1.9 million users, while at the end of 2001 1.6 million users existed.

Figure 15.5.2. Puerto Rico: Annual Variation Rate ofMobile Lines Number 2001-2006


-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

% V

aria

ción

Anu

al


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


24,2%

The growth rate of Mobile Telephony users has been 24.2% in the 2001-2006 period.

Figure 15.5.3. Puerto Rico: Mobile Lines Penetration 2001-2006

Source: JPPPES, Balances and Researches of Companies and Convergencia Research estimations

49,3%46,9%45,5%

42,4%42,0%40,7%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%

Mobile Telephony contribution to National Connectivity was a 49.3% penetration level at the end of 2006.

In 5 years, Mobile telephony modi� ed its penetration level from 40.7% in 2001 to 49.3% in 2006.


Third Part:

16. Dominican Republic


Figure 16.1.1. Dominican Republic: Supply and Demand Evolutionof Mobile Telephony 2001-2006

Source : Convergencia Research estimations in base of company's information

309350

414

486

550

859

467

730

413352

298263

0

100

200

300

400

500

600

700

800

900

1.000

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $



2.523



Figure 16.1.2. Dominican Republic: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : ECLAC, Dominican Republic's Central Bank (BCRD), Balances and Researches of Companies and Convergencia Research estimations

18,3%

13,3%17,3%

13,1%

56,3%

5,0% -0,4%2,7% 9,2%

10,7%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


177,6%GDP:

Var. ’06 vs. ‘01

29,9%

In the 2001-2006 period, the total growth of Mobile Telephony was 177.6%. In the same period Dominican Republic’s economy, as a whole, registered a growth rate of 29.9%.

Figure 16.1.3. Dominican Republic: Mobile Telephony as percentageof GDP 2001-2006

Source: ECLAC, BCRD and Convergencia Research estimations

1,4%

2,1%2,2%

1,6%

2,2%

1,3%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

The Mobile Telephony activity as participation percentage regarding nominal GDP was 1.3% in 2001. In 2006, the proportion has been increased 1.8 times reaching participation levels of 2.2%.


Figure 16.2.1. Dominican Republic: Mobile Telephony Investment (CAPEX) Evolution 2001-2006

Source : Convergencia Research estimations in base of company's information

4653

6273

82

129

0

20

40

60

80

100

120

140

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


445

The Mobile telephony operators in Dominican Republic have invested approximately US $445 million in Capital Expenditures (CAPEX) during the 2001 – 2006 period.


Figure 16.3.1. Dominican Republic: Total Employment(Direct + Indirect) generated by Mobile Telephony 2006


Indirect: # 4.80082,3%

Direct: # 1.03217,7%


The Mobile Telephony industry in Dominican Republic employed approximately 5.832 people in 2006.



ntributiioon to

Approximately 1.032 people were directly employed by Mobile Telephony operators. While, the industry has indirectly generated 4.800 additional job positions through the � rst link of its Value Chain.


Figure 16.3.2. Dominican Republic: Indirect Employment generated by Mobile Telephony in the 1st. link of its Value Chain 2006

Providers of : # %

Outsourcing Sales Team (Sales Agent) 3.500 72,9%Maintennance and Repairs 500 10,4%Network: Radiobase + Troncal Network + Equipments 350 7,3%Terminals Logistic 100 2,1%IT Systems 200 4,2%Terminal Equipments 150 3,1%Indirect Total Employment 4.800 100,0%Source : Study carried out by Convergencia Research according to data given by Mobile Telephony Companies and i ts providers

It is observed that from the total employment generated by Mobile Telephony through the � rst link of its Value Chain, 72.9% is destined to an outsourcing Sales Team. It is also important the employment level generated among network providers (radio bases, troncal network and equipments) and Sites Installers.


Figure 16.4.1. Dominican Republic: Number of Mobile-Fixed Linesand Internet Connections Evolution 2001-2006

Source: Dominican Institute of Telecommunications (INDOTEL)

2.534

3.623

2.1231.701

1.270

4.606

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006 Dominican Republic had a total of 4.6 million users, while at the end of 2001 only 1.3 million users existed.

Fixed telephony: The � xed lines total was 897 thousand in 2006; while in 2001 the total number raised 955 thousand lines.

Internet: The total internet connections were 184 thousand in 2006; all Dial-up and Broadband connections are included. An important growth is observed in the period under analysis, since in 2001 64 thousand connections only existed.

Figure 16.4.2. Dominican Republic: Annual Variation Rate ofMobile-Fixed Lines and Internet Connections Number 2001-2006

Source : INDOTEL

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

% V

aria

ción

Anu

al


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

45,0%

50,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


262,6%


185,6%


- 6,1%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 262.6%. Fixed Telephony has also shown a 6.1% decrease. Regarding Internet service has signi� cantly varied registering a growth rate of 185.6%.

Figure 16.4.3. Dominican Republic: Mobile-Fixed Lines andInternet Connections Penetration 2001-2006

Source : INDOTEL

47,9%

38,3%

27,2%23,1%

18,8%

14,3%

9,3%1,9%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



The Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity in 2006; at the end of this year penetration levels had reached 47.9%.


Regarding Fixed Telephony, its contribution to Connectivity remained sFigure during the whole period closing 2006 with an 9.3% penetration.

Internet connections have increased until 2006 closing with a penetration level of 1.9%.


Third Part:

17. Trinidad & Tobago17.1. Mobile Telephony Contributionto Gross Domestic Product

Figure 17.1.1. Trinidad & Tobago: Supply and Demand Evolutionof Mobile Telephony 2001-2006

Source : Telecommunications Authority of Trinidad & Tobago (TATT) and Convergencia Research estimations.

44

70

91

125

163

203

138

173

106

77

60

38

0

20

40

60

80

100

120

140

160

180

200

220

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


696Demand: Accum. ‘01 to ’06

592

From 2001 to 2006, the Mobile Telephony contributed to national GDP providing approximately US $696 million of goods and services.

With respect to Demand, the Mobile Telephony contributed to GDP purchasing approximately US $592 million of goods and services from 2001 to 2006.

Figure 17.1.2. Trinidad & Tobago: Average Annual Variation Rate of Mobile Telephony and GDP 2001-2006

Source : ECLAC, Central Statistics Office (CSO), TATT and Convergencia Research estimations

28,7%

59,4%

37,9%

30,2%

25,0%

4,2%7,9%

14,4%

8,8% 8,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%


360,5%GDP:

Var. ’06 vs. ‘01

62,5%

In the 2001-2006 period, the total increase of Mobile Telephony was 360.5%. In the same period Trinidad & Tobago’s economy, as a whole, registered a growth rate of 62.5%.

Figure 17.1.3. Trinidad & Tobago: Mobile Telephony aspercentage of GDP 2001-2006

Source : ECLAC, CSO, TATT and Convergencia Research estimations.

0,8%0,8%

1,0% 1,1%1,1%

0,5%

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

2001 2002 2003 2004 2005 2006

Part

icip

atio

n %

in G

DP

utoThe Mobile Telephony activity as participation percentage regarding nominal GDP was 0.5% in 2001. In 2006, the proportion has been duplicated reaching participation levels of 1.1%.


Figure 17.2.1. Trinidad & Tobago: Mobile Telephony Investment(CAPEX) Evolution 2001-2006

Source: TATT and Convergencia Research estimations

7

11

14

19

24

30

0

5

10

15

20

25

30

35

2001 2002 2003 2004 2005 2006

Mill

ions

of U

S $


104

Mobile telephony operators in Trinidad & Tobago have invested approximately US $104 million in Capital Expenditures (CAPEX) between 2001 and 2006.



ntributiioon to


Figure 17.3.1. Trinidad & Tobago: Average Annual Variation Rate ofCPI and Mobile Telephony ARPU 2001-2006

Source: CSO, TATT and Convergencia Research estimations

-6,3%

0,0%

-12,1%

-19,7%

-12,6%

8,3%6,8%

3,7%3,8%4,2%

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Accum. Var. CPI :

+ 20,0%


In the period 2001-2006, Trinidad and Tobago’s accumulated in� ation was 20%.

Mobile Telephony has shown a de� ationary evolution regarding its revenues average per user (ARPU). The variation in the period under analysis shows an accumulated decrease of only 42.2%.


Figure 17.4.1. Trinidad & Tobago: Total Employment(Direct + Indirect) generated by Mobile Telephony 2006


Direct: # 19018,5%

Indirect: # 83681,5%


The Mobile Telephony industry in Trinidad & Tobago employed approximately 1.026 people in 2006.

Approximately 190 people are directly employed by Mobile Telephony operators. While, the industry has indirectly generated 836 additional job positions through the � rst link of its Value Chain.

It can be concluded that for each employee directly employed by Mobile telephony, 4.4 employees are indirectly demanded.


Figure 17.5.1. Trinidad & Tobago: Number of Mobile-Fixed Linesand Internet Connections Evolution 2001-2006


530

924

366284

160

1.155

0

200

400

600

800

1.000

1.200

1.400

2001 2002 2003 2004 2005 2006

Thou

sand

s of

Lin

es


Mobile telephony: In 2006 Trinidad & Tobago had a total of 1 Million 155 thousand users, while at the end of 2001 only 160 thousand users existed.

Fixed telephony: The � xed lines total was 343 thousand in 2006; while in 2001 the total number raised to 308 thousand lines.

Internet: The total internet connections were 98 thousand in 2006; all Dial-up and Broadband connections are included. An important growth is observed in the period under analysis, since in 2001 35 thousand connections only existed.

Figure 17.5.2. Trinidad & Tobago: Annual Variation Rate of Mobile-Fixed Lines and Internet Connections Number 2001-2006


-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2002 2003 2004 2005 2006

% V

aria

ción

Anu

al


144,1%


35,3%

Fijas: Var. '06 vs. '01 - 1,2%0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

2002 2003 2004 2005 2006

Ann

ual V

aria

tion

%

Mobiles: Var. ’06 vs. ‘01

622,0%


180,7%Fixed:

’06 vs. ‘01 Var.

11,3%

The growth rate of Mobile Telephony users in the 2001-2006 period has been 622%. Fixed Telephony has also shown a moderated growth of 11.3%. Regarding Internet service has signi� cantly varied registering a growth rate of 180.7%.


Third Part:

Figure 17.5.3. Trinidad & Tobago: Mobile-Fixed Lines andInternet Connections Penetration 2001-2006

Source: ECLAC, TATT and Convergencia Research estimations

87,0%

69,8%

40,2%

27,8%

21,7%12,3% 25,8%

7,4%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

2001 2002 2003 2004 2005 2006

Pene

trat

ion

%



The Mobile Telephony represented the most important telecommunications service regarding its contribution to National Connectivity; at the end of 2006 it has reached penetration levels of 87%, registering the region’s highest index.

In only 5 years, Mobile telephony modi� ed its penetration level from 12.3% in 2001 to 87% in 2006.


Internet connections were increased closing 2006 with a 7.4% penetration.

Annexes


Annexes:

Data and Consulting Sources

1. Argentina

International Organisms: Economic Commission for Latin America and the Caribbean (ECLAC)

National Organisms:National Institute of Statistical and Censuses (INDEC) INDEC - Consumer Defence Ministry of Labour, Employment and Social Security (MTEySS) National Commission Communications (CNC) Secretary of Communications (SECOM)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- CTI- Movistar- Personal- Nextel

Interviews:Company ExecutiveAvanzitBGH Sergio Daniel YáñezBrighstar Alejandro CasabiancaCicomra Alfredo BalarinoComercializador CTI Gustavo AlcainEiffel José FernándezEmerson Anabella LombardiEmerson Hugo FernándezEmerson Sonia CastellanosEricsson Cecilia AmuchasteguiGemalto Federico GiannattasioGemplus Mathias BouzereauGuzman-NacichLeadcom Sr. BufacciLeadcom Eduardo MaradeiLG Diego BarberoMachainMotorola Alberto IglesiasMotorola Gustavo WrobelNokia Siemens Alejo ZagalskiNortel Juan Carlos PerelliPersonal Sabrina RomeroPersonal Mario FarinaQualcomm Guillermo FornaresioRelacom Jorge CarusoSamsung Javier OteroTESUR Vicente CardoneOtros Rodrigo LadeiraInmobiliaria Cesar Iraola

2. Brazil

International Organisms:Economic Commission for Latin America and the Caribbean (ECLAC)

National Organisms:Statistics and Geography Brazilian Institue (IBGE) and CEPALNational Telecommunications Agency (ANATEL) Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Amazonia- Brasil Telecom Celular- Claro- Oi- Telemig- TIM- Vivo

Interviews:CompanyANATELAbeprestAberimestAbineeBenQBGH BrasilBrighstarDireknetG&DGemaltoLeadcomSiemensVisa Vivo


3. Chile


National Organisms:Central Bank of Chile Telecommunications Sub secretary of Chile (SUBTEL) National Statistics Institute of Chile (INE)National Chamber of Commerce, Services and TourismMinistry of PlanningDirection of LabourEconomic Ministry

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Claro- ENTEL PCS- Movistar

Interviews:Company ExecutiveAgencia Prensa Carlos ZavalaA-Novo Enrique VidalA-Novo Marcela LizanaBanco Central de Chile Antonio EscandónBrightstar Vicente CamusCentennial Cristián Canelo Claro Paul GálvezClaro Marco LópezColegio Ingenieros Pedro Torres OjedaEntel PCS Andrés CristiEntel PCS Claudia BizarroEntel PCS Jimmy FloresEntel PCS Jorge Bascur Entel PCS Patricia AstorgaEntel PCS Francisco OchoaEntel PCS Gustavo NicoliniGSM LA Alexis ArancibiaINE Cristina Silva CarrascoInterexportLeadcom Jennifer AlarcónLeadcom Angelo AbaglianoMotorola Cristin FischerTelecom Eduardo De LucaTelecom Alejandro MartínezTelefónica CTC Miguel Angel CruzTelefónica Móviles Jeannette Luna

4. Colombia


National Organisms:National Administrative Department of Statistics (DANE)Superintendence of House Utilities (SSPD),Regulatory Commission for Telecommunications (CRT) Ministry of Communications Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Avantel- Comcel- Movistar- Tigo

Interviews:Company ExecutiveCOPNIA - Consejo Profesional Nacional de Ingenieros

Luz Sofía Aguirre

DANE Estadistica José IglesiasACIEM Asoc. Colombiana

de IngenierosTYCOUT Starcom Fernando CamargoUT Starcom Ing. David BedoyaZTE Carlos MorenoAgencia Prensa Nathaly GarcíaOLA María Valencia RojasTIGO Jairo MuñozTIGO Carlos ArangoComcel Natalia CuellarEricsson Rolando MartínezNokia (region) Claudia HochmanTelefonica Moviles Andrés Gómez HenaoTelefonica Moviles Gerardo GonzálezCMA (Compania Metalicas Asoc.)

Alejandro Coronado

Leadcom Ing. Hernán Zabarain


Annexes:

5. Ecuador

International Organisms: Economic Commission for Latin America and the Caribbean (ECLAC)International Labour Organization (ILO)

National Organisms:Central Bank of Ecuador (BCE)National Institute of Statistics and Census (INEC) Superintendence of Telecommunications (SUPTEL)National Telecommunications Commission (CONATEL)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Alegro- Movistar- Porta

Interviews: Company ExecutiveCONATELSiemens Juan Carlos MolanoSiemens Marcelo RomoPorta Sara GómezLeadcom Daniel NavasAndinatel Vicente MerchanMovistar Juan FloresAIME Asociación Ingenieros de Minas SIDEN Soc.Ingenieros de Ecuador Helena de Armas

SUPTEL - Superintendencia de Telecomunicaciones

Mario Jardin

Ditelpro Patricio JacomeHTM (servicio técnico terminales) Wilson Avila

Brightstar Oswaldo PonceTelefonica Móviles Juan FloresTelefonica Móviles Julien LereboulletTelefonica Móviles Carlos Meythaler

6. Peru


National Organisms:Central Reserve Bank of Peru (BCRP) Supervisor Organism of Private Investment in Telecommunications (OSIPTEL) National Institute of Statistics and Informatics (INEI) Statistics and Labour Studies Program (PEEL)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Claro- Movistar- Nextel

Interviews: Company ExecutiveMovistar J.C. StollMovistar Carlos ZamoraLeadcom Julio BonifazTécnicas Metálicas Sr. TorresAmerica Movil Adriana AlbanZTE Alan CupisCIP Colegio Ingenieros Luisa Ulloa ReynaOSIPTEL Marcia PerrigoBrightstar Marjorie GuttiA-Novo Cristián Aguirre


7. Uruguay


National Organisms:National Institute of Statistics (INE) Telecommunications Services Regulatory Unit (URSEC)Secretary of Communications (SECOM) National Direction of Labour (DINATRA - MTSS)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Ancel (Antel)- CTI- Movistar

Interviews:Company ExecutiveAncel Marcelo ErlichAncel Jorge SuárezAncel Rosana BetbederAncel Jose Carlos LópezAncel Marcelo EviaMovistar Virginia SosaMovistar Daniel de LisanteMovistar Diego RoelDistribuidor Movistar Oscar FerrasPranasys Rafael García Karma Sigueto KubotoBrightstar Juan PoseTeyma Pablo MorelliUltima Milla Arnaldo Castro

8. Venezuela


National Organisms:Central Bank of Venezuela (BCV) National Telecommunications Commission (CONATEL)National Institute of Statistics (INE)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Digitel- Infonet- Movilnet- Movistar

Interviews: Company ExecutiveBrightstar Ricardo De Sousa Colegio de Ingenieros Arq. María QuinteroDigitel RegulatoriaDigitel Luis HerreroINE José LusardoMovistar Ing.José de BritoMovistar Lic.Gabriela KeborMovistar Angel BentancourtMovistar Johann DurreNokia Humberto SalinasRelacom Milangelo Galea


Annexes:

9. Costa Rica


National Organisms:Central Bank of Costa Rica (BCCR) National Institute of Statistics and Census (INEC) Regulatory Authority for the Public Services (ARESEP)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- ICE Telecommunications

Interviews: Company ExecutiveAutoridad Reguladora de los Servicios Públicos

Carlos Matos

Banco Central de Costa Rica

Ana Georgina Azofeifa

Banco Central de Costa Rica

Manfred Vízquez Alcázar

Colegio Federado de Ingenieros y Arquitectos

Jeffrey Zúñiga Arias

Colegio Federado de Ingenieros y Arquitectos

Ingeniera Silvia Ruiz

D-Link Erick MurilloD-Link Rubén MuñozEricsson Luis ObandoGrupo Akar Aron CadenasICE Gabriela VarelaICE Fernando MurilloICE Manuel Córdoba Morales

ICEMarco Vinicio Fernández Montalto

INEC Gabriela SalasRACSA René MedinaRACSA Mario José Zaragoza BorraséSiemens Norberto IzurietaSTG Viviana LutmerZyxel Estela M. Goldberg

10. El Salvador International Organisms: Economic Commission for Latin America and the Caribbean (ECLAC)

National Organisms:Central Reserve Bank of El Salvador (BCR) The General Superintendence of Electricity and Telecommunications (SIGET) General Direction for Census and Statistics (DIGESTYC) Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Claro- Digicel- Movistar- Telemovil

Interviews: Company ExecutiveFESIARA (Federación Salvadoreña de Ingenieros, Arquitectos y Ramas Afines)

Nancy Tecortes

Autoconsa Fernando ResinosBanco Central de Reserva de El Salvador Benjamín Garay

Banco Central de Reserva de El Salvador Selso Coto

Banco Cuscatlan Marisela AlvarengaClaro - Telecom Jaime CastroClaro - Telecom Sergio Vázquez Claro - Telecom Javier OlivaClaro - Telecom Eric Benet Claro - Telecom Alberto DavidsonClaro - Telecom Silvia RodríguezClaro - Telecom Elsa de ZaraviaClaro - Telecom Rodrigo LópezDigicel Sonia VillaltaDigicel Luis La RoccaDirección General de Estadística y Censos Luis Paz

Ericsson Eduardo Santos FESIARA Sr.Cardoza BenítezIntelfon Paola RodríguezSIGET Noel MaldonadoTelecom El Salvador Mónica RicardezTelefónica Mercedes BeunzaTelefónica Xenia ZepedaTelemovil Ramiro AvendañoTelemóvil Mario Méndez

Carmen Argueta


11. Guatemala


National Organisms:Guatemala Bank (BANGUAT) Guatemala’s National Institute of Statistics (INE) Guatemala’s Superintendence of Telecommunications (SIT)Guatemala’s Social Security Institute (IGSS)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Claro- Movistar- Tigo

Interviews: Company ExecutiveBANGUAT Luis EcheverryBANGUAT Ismael Valenzuela BANGUAT Mario Alfredo SalgueroBrightstar Marta NoriegaClaro Enio GuzmánClaro Ing. Marvin ParClaro Alejandro SalgueroComcel Marco ChávezGrupo Mena Roaldo VázquezSIT Rodrigo RoblesTelefonica Móviles Jorge EstevezTelefonica Móviles Flor de María MencosTelgua Caludia MassisTelgua Litza EscobarTelgua Regina Leal Tigo Marlin OlivaTigo Osmar Coronel

12. Panama


National Organisms:Ministry of Economy and Finance (MEF) Panama Authority National Authority of Public Services (ANSEP) Panamanian Association of Company Executives

Mobile Telephony Companies: Balances and Reports (annual and quarterly published))Cable & Wireless PanamáMovistar

Interviews: Company ExecutiveANSEP Edmundo EduardoC&W Panamá Roberto MendozaC&W Panamá Indira DoyenC&W Panamá Carlos Ungo C&W Panamá Abdiel Antonio GutiérrezC&W Panamá Carlos FerrerLeadcom Eric de SedasLG Dennis Teresa LópezLG AbdielLG Electronics Panama Julio FabregaLG Electronics Panama Dennis Teresa LópezSociedad Panameña de Ingenieros y Arquitectos

Martín Isa

Starcom Isabel Ruilobo


Annexes:

13. Mexico


National Organisms:The National Institute of Statistics, Geography and Informatics (INEGI) Bank of Mexico (Banxico) Federal Commission of Telecommunications (COFETEL)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Iusacell- Movistar- Nextel- Telcel (América Móvil)- Unefon

Interviews: Company ExecutiveAlcatel Lucent Gerardo García Alcatel Lucent Ing.Alejandro MartínezBrightstar Braulio HernándezColegio de Ingenieros Dra. Cecilia Martín Del CampoDireccion General de Profesiones

Eberardo Beltrán Corona

Gemalto Mauricio MalpicaGemalto Natalia Da SilvaGemalto Benjamin Binet Iusacell Carlos HirschLeadcom Juan Carlos CalvaMotorola Lic.Alonso AlonsoMovistar Omar CalvoMovistar Susana TorresMovistar Victor Manuel PrietoMovistar Mariana García MenaMovistar Veronica Gómez FerroTelcel Francisco Marin GaribaldiTelcel Jorge GonzálezTelcel Ing. Ricardo Medina

14. JamaicaInternational Organisms: Economic Commission for Latin America and the Caribbean (ECLAC)International Telecommunications Union (ITU)

National Organisms:Bank of Jamaica (BOJ) Statistical Institute of Jamaica (STATINJA)Of� ce of Utilities Regulation (OUR)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Cable & Wireless Jamaica- Digicel- Oceanic

15. Puerto RicoInternational Organisms: Economic Commission for Latin America and the Caribbean (ECLAC)

National Organisms:Puerto Rico’s Planning Board, Program of Economic and Social Planning (JPPPES)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Centenal- Cingular- Movistar- Sprint- Suncom Wireless- Verizon (PRTC)

Interviews:Company ExecutiveBrightstar Julio VegaCentennial Alexis HernándezCentennial Miguel Garcia Rechani Cingular Jennifer BowcockCingular Clay OwenCingular Mark SiegelCingular Belinda BurgosColegio Ingenieros Ing. HernándezCrown Castle Ruth RodríguezMovistar Wandy BorreroMovistar Miguel PérezPuerto Rico Telephone Ing.Manuel HernándezPuerto Rico Telephone Ing. Ivelis QuiñonezPuerto Rico Telephone Gustavo CañasPuerto Rico Telephone Jorge SamalotPuerto Rico Telephone Edwin AvilaSprint Nanci SchwartzSuncom Rose B. Cummings


16. Dominican Republic


National Organisms:Dominican Republic’s Central Bank (BCRD) Dominican Institute of Telecommunications (INDOTEL)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- Centenal- Claro (ex Verizon)- Orange- Tricom

Interviews: Company ExecutiveCentennial Guillermo PeñaCentennial Mite NishioCentennial Tomas HernándezCentennial Richard DelgadoCentennial Eduardo MártinezVerizon Antonio MusaCODETEL Martín Montas Domenech

Colegio de IngenierosIng.Adolfo Cedeño de las Rosas

Brightstar Humberto De JesúsSabre Manuel De La RochaClaro Isabel MorilloClaro Rubén GuzmánClaro Bartolomé Soriano

17. Trinidad & Tobago

International Organisms: Economic Commission for Latin America and the Caribbean (ECLAC)International Monetary Fund (IMF)

National Organisms:Telecommunications Authority of Trinindad & Tobago (TATT) Central Statistical Of� ce (CSO)

Mobile Telephony Companies: Balances and Reports (annual and quarterly published)- TSTT

18. Regional

Interviews: Company Executive3Com Román BaudritAlcatel Johnny VegaD-Link Jorge GuillénEricsson Gilberto MataEricsson Alexander TellezLeadcom Juan Manuel GómezLeadcom Yamile FrancoMotorola Juan Carlos PerdomoNokia Manuel González ArceNokia Jorge AguileraNortel José PortoNortel Pierre BissonetteNortel Fabiana CoeloNortel Ivan GoridcoPalm Zorena AlbarranPalm Erika García VenegasPanasonic Latin America Karen A. Turner M.Siemens Eric NuñezSiemens Centroamérica Erwin EllerSiemens Centroamérica Otto ZúñigaSony Ericsson Centroamérica

Judith Fraguela


Annexes:

II. Working Group

Mariana Rodriguez ZaniGeneral Director of ConvergencialatinaProject Coordinator• Bachelor of Communication (ULZ – Argentina) and MBA

(UTDT – Argentina and St. Gallen – Suiza).• Founding member of Grupo Convergencia. She was

responsible of product development.• Since 2000 she manages Convergencialatina and since 2003

she participates of the area research development.

Susana LandeiraResponsible of Project Research• Bachelor of Social Communication (UNQ - Argentina).• She has carried out researches on journalism means, graphic,

radio and television means.

Gustavo JorgeProject Director • Public Accountant (UBA - Argentina), He holds an MBA

(UTDT - Argentina and WHU - Germany).• He worked in leading banks of Argentina (BST, Bansud,

Quilmes), in commercial areas (Special Projects & Structuring) and staff (Strategic Planning & Management Control)

• He has carried out Consulting and Reaseach for Convergencia Research (Argentina), ING (Uruguay) and Cemex (Germany).

mobiletelephony contribution

Documents

countries of latin america

gsm association latin

views of gsm latin america

mobile development

fixed telephony

caribbean economiesfirst

caribbean economies1

associate members