CANTO Weekly Newsletter – BNamericas 05/01/15

CANTO Weekly Newsletter – BNamericas 05/01/15

Roundup: Bolivia smartphones, Jamaica cable TV, Movistar Nicaragua – Regional
SPOTLIGHT: Squeezed TCL to tailor phones to LatAm – Regional
Appointments watch: TIM CMO, Telebras CEO, Mavens, Zenvia – Brazil, Regional
Satellite over-supply ‘worsening in LatAm’ – Regional
Samsung regains smartphone crown in Q1 – Regional

Roundup: Bolivia smartphones, Jamaica cable TV, Movistar Nicaragua – Regional

There were around 1.58mn smartphones in Bolivia at the end of last year, for a market penetration of 46%. Smartphone use has been growing at an average rate of 400% a year since 2012 in the country, local paper El Día said, citing Entel.
Mobile internet grew 133% last year, from 1.1mn to 2.7mn connections.
Entel reported that 740,000 mobile lines out of its total of 4.5mn corresponded to smartphones. Tigo reported that 31% of its 3.1mn lines corresponded to smartphones while Viva reported that smartphones represented 38% of its 1.5mn lines.
***
The Jamaican Broadcasting Commission said that 49 cable companies had been found to be in breach of copyright law, paper the Gleaner reported.
The commission alleged the cable companies had been found to be showing 98 channels without authorization. The regulator has told the operators to remove the channels or “regularize them.”
***
Movistar Nicaragua announced the launch of SmartStore, the country’s first digital customer center.
Telefónica invested US$150,000 in SmartStore, launched to help improve customer service. Customers will be able to access the store from their phones and tablets, where they will be able to check their bills, browse plans and offers and top up their phones.

SPOTLIGHT: Squeezed TCL to tailor phones to LatAm – Regional

Despite a solid first quarter in Latin America, Chinese mobile phone manufacturer TCL, which makes Alcatel OneTouch brand handsets, is under pressure.
It is facing challenges from both the high and low ends and is planning to launch a new line of phones covering the full spectrum of price points in order to compete.
“While local players have leveraged their geographical advantages to compete aggressively in the feature phone and entry-level smartphone segments, the group has also been presented with intensified competition from first-tier brands in the mid-to-high-end smartphone segment,” the company said in a statement.
It added: “These have posed challenges to the group in respect of product technology and pricing.
“In response to these, the group will launch a range of innovative smartphones and devices from entry-level to mid- to high-end models, with customized features and targeted pricing strategies, to address the differing needs of markets within South America, in a bid to sustain strong growth momentum in this region.”
Alcatel is a joint venture between TCL and France’s Alcatel-Lucent.
GOOD GROWTH TO DATE
To date, growth has not been a problem for the company in emerging markets.
South America saw an 18% increase in sales of handsets and other products in the first quarter of 2015 for sales of 2.11bn Hong Kong dollars (HKD) (US$272mn) compared with 1.80bn in 1Q14. The region accounted for 31% of total sales.
North America was also strong, seeing a 26% increase, while China and the Middle East and Africa stormed ahead with sales growth of 161% and 174%, respectively.
The more mature markets of Europe and Asia Pacific saw drops in sales of 16% and 67%, respectively.
Globally, sales rose 21% to 6.69bn HKD on handset volume of 15.8mn units, up 16% year-on-year. Some 9.7mn, or 62% of total shipments, were smart devices, up 54%.
TCL has positioned itself strongly in emerging markets with smartphones, using both the Android and Firefox operating systems at entry level prices. Given the brand’s success, the average selling price rose from US$52.20 to US$54.70.
Despite the level of competition in the smartphone space, the company was able to keep its gross profit margin from falling too much – it was 19.1%, down from 19.6% a year ago – and make a 185mn HKD net profit, up 3%.
But can those margins be maintained? The struggle is fierce at the top between the big two players of Samsung and Apple, while LG and Microsoft Lumia fight with low- to mid-high tier alternatives.
But in many markets in Latin America, cheap Asian devices and even white labels are soaking up the bottom feeders.
SOUTH AMERICA
In the South American region, TCL said that users were progressively moving away from feature phones to smartphones. This was evidenced by a 6% decrease in overall handset volume in the quarter to 5.4mn units but a 54% increase in sales of smart devices to 3.4mn units, for 63% of total shipments.
Alcatel OneTouch has been one of the best-selling brands in Latin America and is also one of the main brands that carry the Firefox operating system, as well as Android.

Appointments watch: TIM CMO, Telebras CEO, Mavens, Zenvia – Brazil, Regional

Brazilian mobile carrier TIM has appointed a new chief marketing officer.
After six years in the company, Roger Solé submitted his resignation from the post to “take on new challenges” and will be temporarily replaced by Rogerio Takayanagi, TIM said in a statement. Takayanagi has held the position before and leaves the post of head of Live TIM, the company’s fixed broadband unit.
According to media reports, Solé will take over as VP of innovation at US carrier Sprint.
***
The board of Brazilian state-run telco Telebras is likely to confirm on Wednesday Jorge Bittar as the new president of the company.
Bittar is an engineer affiliated to the ruling workers’ party. He replaces interim president Francisco Ziober Filho, who took on the role in January 2014 after the resignation of Caio Cezar Bonilha.
Bittar was federal deputy for four legislatures, during which period he was a member of the lower house committee on science and technology, communication and information.
***
UK digital research, strategy and marketing consultancy Mavens of London appointed Amanda Valle and Carol Lara as chief strategy officers for their new US and Latin American offices.
Mavens has announced it will open new offices in San Diego, California and São Paulo, Brazil.
The company said its expansion coincides with a global boom in big data. According to the IDC’s Worldwide Big Data Technologies and Services 2012-16 forecast, sector revenue will grow from US$14.3bn in 2014 to US$23.8bn in 2016; an 18.55% CAGR.
***
Brazilian mobile digital firm Zenvia appointed Daniel Bulach as head of new businesses for its messaging area.
Messaging looks after multi-channel communication, such as SMS, email, USSD, voice torpedo, among other technologies.
Bulach will be responsible for developing new services for the segment to support Zenvia’s expansion plans, the company said. This is the second Zenvia appointment in a month.

Satellite over-supply ‘worsening in LatAm’ – Regional

Traditional communications satellites serving Latin America are likely to be operating at 70% capacity on average in 2017, compared with 80% capacity in 2014, according to satellite sector consultancy Euroconsult.
“The trend of falling fill rates is most profound in Ku-band, where utilization levels are dropping from 86% in 2010 to an expected 64% by 2017, causing serious concerns for over-supply,” said Nathan de Ruiter, senior consultant at Euroconsult.
Satellite operators have invested heavily in response to growing demand and Euroconsult expects the supply of total regular capacity in Latin America – not including High Throughput Satellite (HTS) capacity – to double by 2017, compared to the amount available in 2010.
HTS is incipient, with 18Gbps capacity available – and fully leased – in 2014, but set to grow to over 370Gbps available by 2017, although current projections suggest only 17.7% of it (66Gbps) will be leased at that time.
Euroconsult projects total capacity leased to grow at a 10% CAGR over the next decade, translating to more than 330Gbps of traffic flowing over satellite by 2024, compared to 127Gbps in 2014.
Latin America ended 2014 with more than 1,600 pay TV channels using satellite connectivity and more than 50,000 VSATs, as well as capacity used for telecom trunking and backhaul. Satellite capacity usage grew at 8% CAGR during 2009-14.
In the short to medium term, market growth will be hampered by the economic slowdown that should limit the progress of the middle class and may potentially cause instability or delays to government programs and funding. Furthermore, the analog switch-off process will somewhat temper the capacity additions from 2018 until 2022.
Euroconsult notes that Brazil and Mexico will represent more than half of Latin America’s satellite connectivity demand in 2024, and the countries are preparing accordingly.
Mexican national venture Mexsat is preparing to add a second satellite and a third later this year. The Mexican government believes Mexsat will be Latin America’s most advanced national satellite firm once all three units are in place, serving 60,000 sites versus 5,000 today.
Meanwhile, Brazil auctioned four satellite orbit slots in 2014 and will be auctioning more slots next month.

Samsung regains smartphone crown in Q1 – Regional

South Korean electronics giant Samsung reasserted its dominance over Apple at the top of the global smartphone market in the first quarter with a renewed focus on lower-cost devices.
That’s based on data from consultancies IDC and Strategy Analytics.
Apple tied with Samsung in the fourth quarter of 2014 at 74.5mn smartphone shipments on the strength of sales of the new iPhone 6/6 Plus, particularly in China.
According to Strategy Analytics and IDC, Samsung recaptured the top spot with around 83mn smartphones shipped in Q1 compared with Apple’s 61.2mn.
“Samsung’s shipments, given that the S6 was not launched into the market for the full quarter, were driven by large volumes into emerging markets and steady demand for its midrange and lower-priced smartphones,” Anthony Scarsella, IDC research manager said.
IDC analyst Melissa Chau added that the rest of the year would be characterized by a battle between the S6/S6 Edge and the iPhone 6/6 Plus, while all vendors would be squeezed by falling average selling prices for devices.
GLOBALLY
Global smartphone shipments grew 21% in Q1 to 345mn from 285mn in the same quarter a year ago, though experienced a slowdown in growth from the 33% year-on-year growth registered in 1Q14, due to maturity in the US, Europe, and China, according to Strategy Analytics.
IDC’s figures showed global smartphone shipments slightly lower, at 336.5mn, growth of 16.7% from 1Q14, but down 10% from the 377.5mn units shipped in 4Q14.
Top smartphone vendors worldwide 1Q15 (Credit: IDC)
Huawei was fourth with 5%, up from 4.7% a year ago, according to both IDC and Strategy Analytics, with its Y-series selling well as a low-cost model and its mid-range models accounting for a third of shipments.
Regaining fifth place, according to IDC, was LG Electronics which increased its market share to 4.6% from 4.3% a year ago.
“LG’s diverse portfolio, with models ranging in prices, features, and design, enabled the brand to overtake Xiaomi’s more limited geographic presence to hit the top five,” IDC said.

The information presented and opinions expressed herein are those of the author and do not necessarily represent the views of CANTO and/or its members

It's Day 3 of CANTO's 138th Board Meeting in Aruba! *Top pic* Recently appointed V.C. David Cox (L) & CANTO Chair Julian Wilkins (R) met with Aruba's Regulator Ludwig Jansen, Directie Telecommunicatie. *Bottom pic* The Board also met with Roland Croes (L) Director of @SETARnv pic.twitter.com/4Q4ZNG0uJk

About 15 hours ago from CANTO's Twitter via TweetDeck

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