Latin America Mobilizes Segmenting Demand Creates Opportunities

Latin America Mobilizes Segmenting Demand Creates Opportunities

Roberto Vazquez Ferrero, Latin American Director, Telecom Practice Group, The Nielsen Company

In Latin America, Nielsen reports sales of mobile phones have had a noteworthy increase in the last years, even though they are starting to have a diminution in the growth rate. Comparing the first quarter of 2009 against the same period of 2008, the sales rate has slowed down to 12%.

Countries such as Mexico and Brazil—where the density of devices per inhabitant is still smaller than that of the regional average—prompted sales with double digit unit gains of 20% and 16% respectively. Corresponding U.S. dollar sales rates were more modest, at 3% for Mexico and 6% for Brazil. Together, given their relative size, mobile device sales in these two countries offset the combined unit sales losses unilaterally in Argentina, Chile, Colombia and Venezuela.


Considering the market size in the region, if each mobile phone owner has at least one line, it is estimated that there are 460 million active lines in Latin America. This represents an important new growth channel and significant opportunities for the Telecom industry. It is estimated that in the next few years, sales of Smartphones will continue to increase, giving rise to the growth of the Value Added Services (VAS) penetration.

Like their North American counterparts, Latin Americans were interested in mobile phone features. In the last year, handsets sold in the region included camera (61%), radio (55%) and MP3 player (35%). All of these features showed considerable growth when compared to the previous year.

Motivating factors

An in-depth segmentation analysis in Brazil was conducted to understand what cell phone users in the region were looking for—convergence, greater connectivity, more entertainment or features. Four distinct segments of cell phone consumers were identified: 16% of Brazilian subscribers use only voice features, 28% use voice and SMS capabilities, 37% use features offline (such as; camera, MP3 player, etc.) and finally, 19% use value-added services, which include Internet access, ringtone downloads, etc.

Value-added service users accrue greater expenses—bills are typically 20% more than the average voice-only mobile user’s tab. These consumers tend to be younger (almost two-thirds are under age 34) and 40% reside in more affluent socio-economic levels, which makes the middle class an important market opportunity for expansion.

In Brazil, the VAS consumers are using the device as a downloader tool, when going online.

Understanding the particular segmentations in each market becomes crucial in order to reach the consumer with the most appropriate offer. This kind of analysis provides a more complete and insightful look into subscribers to understand motivations that drive the decision-making process.