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Latin America Reaches a Mobile Service Milestone

Latin America will pass the milestone of 100 percent mobile phone penetration by the end of the first quarter 2011, according to the latest market study by Informa Telecoms & Media.

However, despite this accomplishment, there are still 178 million people in the region without mobile communication services -- which represents 30 percent of its population.

Brazil, the largest and most important mobile market in South America, had already passed the milestones of 100 percent penetration and 200 million subscriptions by the end of 2010.

With 105 percent penetration at the end of December, Brazil is now the sixth-largest market globally with 206 million subscriptions and the seventh-largest by revenues.

"Passing 100 percent penetration is a huge milestone for the mobile industry, but it's important to note that it does not mean that everyone in Latin America has a mobile phone," says Daniele Tricarico, senior analyst at Informa Telecoms & Media.

Informa's research finds mobile penetration rates of 120 percent and higher in some urban areas where users have multiple subscriptions, but in rural areas mobile penetration rates can fall to 60 percent or lower -- partly due to a lack of network coverage.

Across Latin America, about 27 percent of the total 568 million mobile subscriptions, including mobile broadband connections, are classified as multiple subscriptions -- where customers have more than one SIM card, or have a portable device subscription as well as a mobile phone plan.

This figure also includes double counting of subscriptions, which occur when customers change service provider. This contrasts with North America, where, although year-end penetration stood at a lower 93 percent, multiple SIM and portable devices of some kind and double counting only account for 14 percent of the overall subscription base.

"If we were to look only at unique subscribers when comparing Latin America and North America then the picture would be rather different," says Tricarico. "With lower average disposable income, a high proportion of prepaid customers, who represent over 80 percent of the overall Latin American customer base, tend to switch SIM card to take advantage of the best prices depending on the operator and the time of the day."

At the same time, an increasing number of high-value customers are adding mobile broadband to their existing voice services, sometimes to complement their existing fixed broadband, but more and more often as their primary broadband service. As a result, more people tend to have multiple subscriptions, which is pushing up the overall national penetration figures.

The rapid growth of the Brazilian mobile market, which alone accounts for 36 percent of all Latin American subscriptions, is boosting overall regional penetration. However, even in Brazil there were about 56 million people without a mobile subscription of some kind at the end of 2010.

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