Cell phone duopoly in Latin America
Basically, there are now two big companies left in the rapidly expanding Latin American cell phone market, according to a BusinessWeek article ("A Race to Get People Talking:, 7/3/06).
One is América Móvil, owned by Mexican multimillionaire Carlos Slim. That company has 100 million wireless services in 14 Latin American countries. The company was spun off form fixed-line operator, Telmex, in 2000.
The other one is Telefónica Móviles, owned by Spanish telephone giant Telefónica. It has 74 million customers in 13 Latin American countries. (It also has 20 million Spanish subscribers. Telefónica also owns fixed-line operations in six countries.
The total number of current subscribers in the area is 234 million, so América Móvil and Telefónica Móviles between them own around 76% of the market in the Latin American area. Even better, unlike in more developed countries, the market is still growing fast, with less than 50% penetration to adults in the area and increasing wealth in a number of countries due to the high prices of commodities like oil, copper, iron, and soybeans. The two companies are among the fastest growing in the world.
US companies were once dominant in the area, including AT&T, MCI, BellSouth, and SBC. But all retreated several years ago, selling off their ventures in various countries.
Even though there are two players, there is still real competition. América Móvil is pushing strongly in Brazil, where Telefónica Móviles is dominant, partly through a company called Vico, a joint venture with Portugal telecom. Contrarily, Telefónica Móviles is making a strong push into Mexico, which is América Móvil's home turf.
There are several big challenges for the two. One is the relative poverty of much of the continent. This means lower revenue per customer than in the US, Japan, or Europe. Second, there is the vast area that the companies have to cover with a network of cell towers. Add to that the dominance in some areas of guerillas and indigenous peoples, and it is astonishing how big teh cell phone market is.
6:19:39 PM 
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