Smartphone Trends in Latin America: The Impact of Government Policies and Regulatory Intervention

Summary Smartphone Trends in Latin America: The Impact of Government Policies and Regulatory Intervention, a Telecom Insider Report by Pyramid Research, examines and sizes the handset and smartphone markets at the global and Latin American levels. The report discusses the major handset-related regulations implemented in the region, and it then presents case studies of Argentina, Brazil, Colombia, Ecuador, Peru and Venezuela, analyzing the impact of imposed regulations. The report concludes with a summary of key findings and a set of recommendations. Key Findings - Imposing hefty duties on handset imports is a viable option to foster local industry growth. However, the absence of a fully developed production value chain (i.e., infrastructure, transportation, technology, labor, etc.) can translate into domestically-made handsets that are more expensive than similar imported products in a scenario with lower import tariffs, to the detriment of consumers, particularly those in low income segments. - The reason the adoption of smartphones, and particularly LTE-enabled smartphones, is important is the positive impact these devices can have on ARPS levels. In Latin America, the higher price of LTE-capable smartphones remains a major inhibitor to mass LTE adoption. The deployment of LTE networks is in full swing in most major Latin American markets, but service adoption remains low. Mobile operators are under a lot of pressure to offer LTE-capable smartphones at affordable prices, to get a critical mass of subscribers and more quickly recoup their LTE investments. - It is crucial for mobile operators to be able to expeditiously procure enough smartphones to support the rollout of new technologies (e.g., LTE). In Venezuela, for instance, the adoption of LTE services has been muted, mainly because of the unavailability of LTE-capable smartphones. In Ecuador, if not revised, government-imposed quotas on mobile handsets imports will negatively affect LTE rollout efforts by the countrys largest mobile operators Claro and Movistar, which were recently granted additional spectrum for the deployment of their LTE networks. - Regulators across the region are increasingly resorting to banning the selling of carrier-locked handsets and forcing carriers to unlock all previously sold, with the goal of fueling competition at the service layer. Banning the selling of locked handsets in itself doesnt change the structure of the market, but it helps level the playing field in the mobile segment. In Peru, the SIM lock removal, coupled with improvements in the mobile number porting process, has helped smaller operators Entel and Bitel to steal subscribers from incumbent operators Movistar and Claro. - In Colombia, the removal of minimum contract periods (handset subsidies) has resulted in a shift to lower smartphone price bands, as consumers are unable to pay the full price of high-end and premium devices. This has negatively affected smartphone brands that are more dependent on carrier subsidies (e.g., Apple). Synopsis “Smartphone Trends in Latin America: The Impact of Government Policies and Regulatory Intervention,” a new Latin America Telecom Insider by Pyramid Research examines and sizes the handset and smartphone markets at the global and Latin American levels. The report describes measures undertaken by governments and regulators that directly impact the sale of mobile handsets, particularly smartphones, including implementing import mechanisms and tax policies that favor locally-made handsets and banning the sale of carrier-locked handsets. Further, the report analyses the impact of these measures on different industry players: mobile operators, local and international handset manufacturers, handset distributors and retail outlets, with a focus on the major Latin American markets: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Venezuela. Six case studies are presented, bringing evidence from some of the most prominent handset-related regulations in Latin America. The report concludes with a summary of key findings and a set of recommendations for regulators, governments, handset vendors and distributors, and mobile operators. Reasons To Buy - This Telecom Insider helps executives build proactive, profitable growth strategies by offering comprehensive, relevant analysis of the handset sales regulatory environment in Latin America. - The report offers a wealth of data on handset and smartphone sell-through in Latin America, with a focus on the regions major markets: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Venezuela. - The report is designed for an executive-level audience, boasting presentation quality that allows it to be turned into presentable material immediately. - The broad yet detailed perspective will help operators, handset vendors and other telecom industry players to succeed in the challenging mobile telecommunications market in Latin America. Key Highlights NA