Secret to Multiplay Success in Latin America Requires Mass Market Appeal, Finds Pyramid

CAMBRIDGE, Massachusetts -

As operators continue to exhaust the high-income consumer segments in Latin America, the bundling strategies with the best chance of success involve broadened offerings that will attract lower-income households to broadband and pay-TV, according to a new report from Pyramid Research (www.pyr.com), the telecom research arm of the Light Reading Communications Network (www.lightreading.com).

Multiplay Services in Latin America: Operators Target the Mass Market examines the multiplay strategies of several leading operators in Latin America and the rationale for engaging customers outside the higher-income population segments. This 12-page report compares the cost of multiplay services across several markets to demonstrate that there is potential for costs to come down in Latin America, which would boost penetration. Case studies of two integrated operators — NET Servicos in Brazil and Claro in Central America — examine the strategic challenges and choices involved in expanding target markets through bundling. Download an excerpt of this report here: www.pyr.com/downloads.htm?id=5&sc=PR062609_INLA1.4. Multiplay Services Forecasts (www.pyramidresearch.com/multiplayfcst.htm) are also available and provide service demand and revenue trends for bundled and blended telecom and media products worldwide.

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

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

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

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

Download an excerpt of this report here: www.pyr.com/downloads.htm?id=5&sc=PR062609_INLA1.4. This report is priced at US$595 and can be purchased online here: www.pyramidresearch.com/store/ins_la_090619.htm?sc=LR070109_INLA1.4 or by contacting Jeff Claudino via email at claudino@pyr.com or telephone at +1-619-229-9940.

About Pyramid Research

Pyramid Research (www.pyr.com) offers practical solutions to the complex demands our clients face in the telecommunications, media and technology industries. Our analysis is uniquely positioned at the intersection of emerging markets, emerging technologies and emerging business models, powered by the bottom-up methodology of our market forecasts for over 100 countries-a distinction that has remained unmatched for more than 25 years. As the telecom research arm of the Light Reading Communications Network, Pyramid Research works with Heavy Reading, providing the communications industry’s most comprehensive market data, trusted research and insightful technology analysis.

About Light Reading

Founded in 2000, Light Reading (www.lightreading.com) is the leading online media, research, and focused event company serving the US$3 trillion worldwide communications market. Lightreading.com is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. Light Reading’s research arms, Heavy Reading and Pyramid Research, provide the most comprehensive communications research, market data, and technology analysis in close to 100 markets around the world. Light Reading produces nearly 20 targeted communications events including TelcoTV, Ethernet Expo New York and Ethernet Expo London, The Tower Summit @ CTIA, and Optical Expo, as well as focused one-day events tailored for cable, mobile, and wireline executives. Light Reading was acquired by United Business Media in August 2005 and operates as a unit of TechWeb.

About TechWeb

TechWeb (techweb.com/aboutus), the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 13.3 million* business technology professionals actively engage in our communities created around our global face-to-face events, Interop, Web 2.0, Black Hat, and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise, InformationWeek.com, bMighty.com, and The Financial Technology Network; and the market leading, award-winning InformationWeek, TechNet Magazine, MSDN Magazine, and Wall Street & Technology magazines. TechWeb also provides end-to-end services including next-generation performance marketing, integrated media, research, and analyst services. TechWeb is a division of United Business Media, a global provider of news distribution and specialist information services with a market capitalization of more than US$2.5 billion.

*13.3 million business decision-makers: based on number of monthly connections

About United Business Media Limited

UBM (UBM.L) focuses on two principal activities: worldwide information distribution, targeting and monitoring; and, the development and monetization of B2B communities and markets. UBM’s businesses inform markets and serve professional commercial communities - from doctors to game developers, from journalists to jewelry traders, from farmers to pharmacists - with integrated events, online, print and business information products. Our 6,500 staff in more than 30 countries are organized into specialist teams that serve these communities, bringing buyers and sellers together, helping them to do business and their markets to work effectively and efficiently. For more information, go to www.unitedbusinessmedia.com.

Press contact: Jennifer Baker +1-617-871-1910 jbaker@pyr.com

Source: Pyramid Research

Jennifer Baker, Pyramid Research, +1-617-871-1910, jbaker at pyr.com