Yankee: Latin America wireless thrives on young and restless

They’re young, talkative, want to be entertained and refuse to be tied down. They’re also driving the rapidly growing wireless market in Latin America, according to research from the Yankee Group Inc.

In an audio conference Friday, the Boston-based research group predicted that Latin American wireless subscribers would climb from roughly 85 million in 2001 to nearly 165 million in 2006.

What’s more, given that on average there are twice as many cell phones as PCs in the region, wireless devices are going to become the primary or only Internet access that Latin Americans have in the next few years, Yankee analysts said.

“The predominant group using (wireless services) is the young population,” said Yankee Group analyst Andy Castonguay. “As pricing and services become more attractive, we believe this group will be on the vanguard, pushing these services along.”

The Latin American population is predominantly young and open to new technologies, Yankee analysts said. Furthermore, compared to their northern counterparts who seek content like financial news on the Net, Latin America’s wireless users are more interested in entertainment content such as movie listings.

Although it’s clear that local operators will have to cater to this market’s specific interests to attract more users, vendors will also have to shape services around the unequal income distribution and education levels that characterize the region, analysts said.

Given that many potential users fall into lower income and education-level brackets, operators should concentrate on fewer text-oriented services, such as voice portals and imaging.

Making services “faster and more interactive is an important piece in pulling these segments into heavier usage patterns on mobile networks,” Castonguay said.

Furthermore, the interface for these services must be as robust and interesting as possible to drive the growth, Castonguay added.

But if regional telecommunication operators are planning to net this young and restless market into WAP (wireless application protocol) services, analysts said, prices need to come down and quality needs to notch up.

Current prices are based on airtime, which is still relatively expensive in the market, the researchers said. Furthermore, the service is slow, leading to even more sluggish growth of WAP devices.

Despite these challenges, however, the Yankee analysts predicted that as wireless technology improves, the Latin American market would be one to watch.

“We are looking at an unequaled area of (wireless) growth in the region,” Castonguay said.

Yankee Group, in Boston, can be reached at http://www.yankeegroup.com/.

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