CANTO Weekly Newsletter – BNamericas 10/30/14

CANTO Weekly Newsletter – BNamericas 10/30/14

What’s LAC lacking as a global value chain player? – Regional

Samsung sees Q3 profit freefall – Regional

Huawei’s LatAm unit underperforms in Q3 – Regional

NET, Embratel post Q3 losses – Brazil, Regional

Movistar, Tigo to start 4G LTE in Guatemala – Guatemala

 

What’s LAC lacking as a global value chain player? – Regional Latin America and the Caribbean (LAC) needs better logistics infrastructure, closer regional integration and stronger rule of law to become a key player in global value chains, according to the IDB.LAC countries could boost their exports significantly and diversify into more sophisticated products if they take steps to become “reliable partners” in global value chains, the IDB said in a new study, Synchronized Factories: Latin America and the Caribbean in the Era of Global Value Chains.The ability of LAC nations to participate in global value chains is limited by the fact the region ranks well below Europe and Asia in terms of logistics capabilities, including physical infrastructure such as ports and airports as well as information and communication technology, the study said.

LAC also lags other regions in terms of reduction of regulatory obstacles and number of free trade agreements, it added.

Global value chains provide developing countries with the opportunity to enter new business areas without having to master every step in the production of a final good, said Juan Blyde, IDB’s lead integration and trade economist and coordinator of the study. “But to take full advantage of this phenomenon, it’s vital to improve transport and logistics infrastructure and the ease of doing business,” he added.

The study reveals that LAC could attract 20% more foreign direct investment associated with value chains if it can upgrade transportation and logistics to levels comparable to those of the EU.

The region could also attract more value chain production from international firms by improving the rule of law as it takes an average of 733 days to enforce a contract compared with an average of 398 days in Asia, according to the study.

Samsung sees Q3 profit freefall – Regional Samsung Electronics said its Q3 operating profit fell 60.1% year-on-year to 4.1tn Korean won (US$3.9bn).

Quarterly sales fell 19.7% year-on-year to 47.5tn Korean won, according to the South Korean firm’s latest financials.

Samsung’s IT & mobile communications segment saw sales of 24.6tn Korean won, down 32.8% from 3Q13 and 13.6% sequentially. Mobile sales, the primary revenue driver within the segment, generated 23.5tn Korean won.

Consumer electronics sales fell 3.7% to 11.6tn Korean won, while device solutions dropped 9% to 16.3tn.

The tech giant said that its TV earnings, included in consumer electronics, fell sequentially, which the firm partially attributed to strong first half shipments to Latin American prior to the World Cup.

Ebitda margin stood at 18% in Q3 compared to 24% in the corresponding year-ago period.

Huawei’s LatAm unit underperforms in Q3 – Regional Chinese telecom company Huawei’s Consumer Business Group (CBG), comprising mobile phones, tablets and related products, grew 51% in Latin America in Q3.

Nevertheless, the firm said that the region underperformed against other emerging markets.

CBG reported a 322% year-on-year revenue jump in Middle East and 98% growth in Asia-Pacific. Globally, the division recorded a 26% revenue increase.

Huawei shipped over 32mn consumer devices worldwide, including 16.8mn smartphones, the company said.

NET, Embratel post Q3 losses – Brazil, Regional América Móvil’s Brazilian carriers NET and Embratel reported third quarter losses.

Pay TV market leader and fixed operator NET posted a loss of 44.8mn reais (US$18.6mn) compared with net income of 45.4mn a year earlier, according to its earnings release.

The company attributed the results to the depreciation of Brazil’s real against the dollar and to effects of the federal tax refinancing program (Refis).

Revenue grew 21% to 2.98bn reais mostly on a surge of subscribers, the company said.

Embratel recorded a loss of 380mn reais against a profit of 26.6mn reais a year ago.

Revenue increased 10.7% to nearly 6bn reais driven mainly by a 15.2% growth in pay TV income and 13.5% in data communications.

Movistar, Tigo to start 4G LTE in Guatemala – Guatemala Telefónica launched 4G LTE services in Guatemala through its mobile carrier Movistar, while Tigo announced it would launch its own service in the second quarter of next year.

Movistar said in a press release that the network will operate on the carrier’s 1,900MHz and will be available for post and pre-paid users in Guatemala City and other key areas of the country. Telefónica said it invested US$100mn in the launch to complement Movistar’s 3G coverage.

Tigo will be focusing on the metropolitan area of Guatemala first, and gradually bringing 4G to the rest of the country over the following three years, it said in a release.

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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