Latin America Telecom Insider

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1 Vol. 3, No. 7, November 2011 Pyramid Research Latin America Telecom Insider Operators Embrace Video on Demand to Overcome Regulations Stifling IPTV Market TABLE OF CONTENTS INTRODUCTION 2 REGULATORY ENVIRONMENT 4 A. Regulatory constraints remain the greatest barrier to IPTV in Latin American markets 4 B. Restrictions force telcos to partner with potential future competitors 8 C. Telcos see VoD as a proxy to IPTV 9 MARKET DETAIL 12 CASE STUDY: Argentina Telefónica VoD 12 CASE STUDY: Brasil Telecom s Videon 13 CONCLUSIONS 14 Key findings 14 Recommendations 14 RELATED RESOURCES 15 HIGHLIGHTS The declining revenue from traditional voice services, the deceleration of data growth and the rising participation of cable companies in the traditional telco space (voice and broadband) are increasingly affecting telcos traditional business segments. Over the past few years, telecom operators have tried to broaden their scope of action by intensifying activities in the media segment. The media and pay-tv markets traditionally have been regulated in very distinct ways from the telecom sector. Restrictions have been imposed on telecom operators in order to prevent the market concentration that would occur if incumbent operators with substantial market power were allowed to launch pay-tv services over their networks. Under current restrictions, many incumbent operators look at VoD services as a way to bypass the law and enter into the media market. However, as pay-tv markets in the region become more mature and as competition heats up, this strategy becomes less effective. PYRAMID RESEARCH 2011 ID# 996

2 Revenue (US$m) Introduction The declining revenue from traditional voice services, the deceleration of data growth and the rising participation of cable companies in the traditional telco space (voice and broadband) are increasingly affecting telcos traditional business segments (see Exhibit 1). Over the past few years, telecom operators have tried to broaden their scope of action by intensifying activities in the media segment and by bundling services together to improve ARPU, increase customer loyalty and reduce churn in their voice and data segments. Exhibit 1: Voice revenue evolution in Latin America, Argentina Brazil Chile Colombia Italy Mexico $25 Spain United Kingdom Venezuela $20 $15 $10 $5 $ Source: Pyramid Research By offering IPTV and convergent services, operators can leverage their current network infrastructure and capture a greater slice of the household expenses. This technology also brings some advantages to traditional pay-tv delivered over satellite and cable because it allows for the delivery of significantly more content and functionality. Thus, the combined advantages have led many service providers to make the investments that are necessary in order to capitalize on an IPTV offering. Although IPTV technology has been gaining popularity in Latin America, it is still in early stages of development, with only 0.2% of households in the region subscribed to IPTV services as of year-end 2010 and an estimated 0.3% as of year-end Latin America s IPTV market is largely underdeveloped because of its low broadband household penetration levels and the existence of regulatory hurdles in some of its largest economies, such as Mexico and Argentina. Restrictions in these markets have traditionally been imposed on telecom operators in order to PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 2

3 Penetration prevent the market concentration that would occur if incumbent operators with substantial market power were allowed to launch pay-tv services over their networks. As of the end of 2010, Colombia was Latin America s most developed IPTV market, with a household penetration of nearly 1% followed by Chile with 0.7%. Moving forward, we expect regulatory hurdles for Telmex to be eliminated, helping boost the country s penetration rates from 0.7% in 2010 to 4.9% by Exhibit 2: Estimated IPTV household penetration in major Latin American markets, 2010 and % % 4% 4.1% 4.9% 3% 2% 1% 0% 2.4% 1.5% 0.9% 0.7% 0.2% 0.0% Colombia Chile Mexico Brazil Source: Pyramid Research, 2011 This report examines the main regulatory restrictions that operators in Latin America face when launching IPTV services in the region. We look at some of the strategies that have been adopted by some telcos to overcome these restrictions. Our analysis focuses on three countries Argentina, Brazil and Mexico where different regulatory hurdles have been penalizing incumbent operators and delaying the development of the IPTV segment. Finally, we include two case studies to illustrate one of the strategies adopted by incumbent operators to enter the IPTV space: the launch of VoD services. PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 3

4 Regulatory environment A. Regulatory constraints remain the greatest barrier to IPTV in Latin American markets This section describes the main regulatory obstacles that telecom incumbents in Argentina and Mexico face in launching pay-tv and IPTV services. As part of this description, we also include references to Brazil, where incumbent telcos experienced regulatory restrictions until very recently. Argentina: New regulation maintains old restrictions With some 7.1m subscriptions as of year-end 2010, Argentina is Latin America s third biggest pay-tv market after Mexico and Brazil. However, in terms of service penetration, Argentina is at the top, with 66% of the households subscribed to the service, well above the regional average (see Exhibit 3). In terms of technology, cable continues to account for the bulk of connections (84%), followed by DTH/satellite (16%). The IPTV segment is still underdeveloped due to the existence of regulatory and legal obstacles that impede fixed-line incumbents Telefónica and Telecom Argentina from launching IPTV services and hence triple- and quadplay services. Exhibit 3: Pay-TV subscriber penetration in Latin America as of year-end 2010 Bolivia Guatemala Paraguay Ecuador Nicaragua Peru Brazil Honduras El Salvador Colombia Panama Uruguay Puerto Costa Rica Venezuela Mexico Chile Argentina 4% 5% 7% 11% 12% 18% 19% 20% 25% 26% Regional average, 28% 37% 37% 38% 39% 40% 40% 66% 0% 10% 20% 30% 40% 50% 60% 70% Source: Pyramid Research, Q Household penetration PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 4

5 Subscriptions (m) Exhibit 4: Pay-TV subscriptions by technology, Argentina, year-end 2010 IPTV MMDS/LMDS 9 DTH/Satellite Cable 74% 8 72% % 68% 66% 64% 62% 60% 58% 56% Penetration (%) A 2009A 2010A 2011E 2012E 2013E 2014E 2015E 2016E 54% Source: Pyramid Research, Q Regulation Argentina s media sector is governed by a controversial audiovisual communication law (Law 26,522) passed in October The bill, which replaces the country s outdated media regulation from 1980 (Law 22,285), set forth a new regulatory framework for the sector with a clear aim to decentralize and democratize the market by encouraging more local providers and by limiting the power of controlling groups, such as incumbent telecom operators Telefónica and Telecom Argentina, and media giant Grupo Clarín. The law also established a new regulatory authority for broadcasting, the Federal Authority of Audio-Visual Media Services (Autoridad Federal de Servicios de Comunicación Audiovisual, AFSCA), to replace the former broadcast regulator, Comité Federal de Radio Difusión (COMFER). One of the novelties brought by this law (Section 30) is that it opened the door for telecom cooperatives to enter the media segment by allowing nonprofit organizations to launch pay-tv services. According to the Argentine Chamber of Telecommunications Cooperatives (Cámara de Cooperativas de Telecomunicaciones, CATEL), since the approval of the law, more than 80 cooperatives have requested AFSCA licenses to launch pay-tv services in their respective areas of operation. So far 11 cooperatives have already obtained the corresponding permission. However, the commercial launch of pay-tv services will have to wait a few more months, because a federal judge has issued a precautionary ruling that suspends the application of Section 30 of the law. The magistrate alleges that the special tax status to which cooperatives are subject could represent an advantage over other industry players. The issue is now in the hands of Argentina's Competition Commission. In the meantime, three telephone cooperatives associated with CATEL (Telpin, Telviso and TelVGG) announced plans to launch video-on- PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 5

6 Subscriptions (millions) demand (VoD) services during the last quarter of 2011, however it is unclear if this will in fact take place. We do not expect, however, that the eventual launch of IPTV services by cooperatives will have a major impact on the pay-tv market or the IPTV segment because their areas of operation are traditionally limited to populations not served by incumbent operators and therefore exclude the major cities in the country. As of today, cooperatives still account for a very small share of the broadband market and, getting the support of the federal government to gain access to last-mile infrastructure, we do not believe that their situation will radically change. Mexico: Regulator penalizes market leader to promote new entrants in the market The Mexican pay-tv market is one of the biggest in the region in terms of capitalization, with estimated revenue of US$2.1bn in At the end of 2010 there were 10.8m pay-tv subscribers, equating to a 40% penetration rate. In terms of technology, cable (49.5%) and DTH/satellite (47.1%) are the most popular options. The IPTV segment continues to be underdeveloped due to the existence of obstacles that impede the entry of telecom incumbent Teléfonos de México (Telmex) which currently has 98% of the DSL market into the pay-tv segment. Exhibit 5: Pay-TV subscriptions by technology, Mexico, IPTV DTH/Satellite PayTV Penetration MMDS/LMDS Cable 70% 60% 50% 40% 30% 20% 10% Penetration (%) A 2009A 2010A 2011E 2012E 2013E 2014E 2015E 2016E 0% Source: Pyramid Research, 2011 Regulation The Mexican telecom regulator does not specifically forbid telecom operators from launching pay-tv or IPTV services, and a few local players Maxcom (2008) and Iusacel (2010) have already launched IPTV services in the market. In fact, Mexico was one of the first countries in Latin America to regulate telecom convergence. In October 2006, the regulator passed an amendment to the Federal Telecommunications Law that opened the door to operators PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 6

7 Subscriptions (m) providing other services not included in their original concessions, such as pay-tv, through compliance with a series of technical and legal requirements regarding number portability, interconnection and interoperability. This new regulation gave fixed-line carriers like Maxcom the opportunity to enter the pay-tv market and launch multiplay services nationwide. Mexico's leading fixed-line operator, Telmex, has also asked the Mexican Ministry of Communications and Transportation for permission to provide pay-tv services nationwide. This request, however, has been denied several times, the last being in May In this case, the authorities ruled that the operator had not satisfied all the requirements put forward by the regulator and maintained their prohibition. Brazil: Do telecom operators face a new era? With 9.8m pay-tv subscribers at year-end 2010, the Brazilian market leads Latin America when it comes to revenue generation (US$3.9bn in 2010). However, with a pay-tv penetration rate of 19%, there is still room for growth. When it comes to technology, cable continues to be the most popular option, accounting for almost 51% of total pay-tv accounts in the country, followed by DTH/satellite (47%) connections. These two technologies will continue to grow at double-digit numbers, although as we move forward, we expect that satellite will overtake cable in terms of market share. Exhibit 6: Pay-TV subscriptions by technology in Brazil, IPTV MMDS/LMDS DTH/Satellite Cable PayTV Penetration 45% 40% 35% % 25% 20% 15% 10% 5% Penetration (%) A 2009A 2010A 2011E 2012E 2013E 2014E 2015E 2016E 0% Source: Pyramid Research, 2011 Regulation As of today, IPTV merely accounts for 0.1% of the total pay-tv subscriptions in Brazil. This technology has been penalized by regulatory restrictions until later this year, when more favorable regulatory changes were introduced. In Brazil, the situation used to be similar to the one in Argentina. Under the former legislation, only cable companies with 51% of their stock held by Brazilian citizens were allowed to provide pay-tv services in their concession areas. In addition to this, cable companies were also PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 7

8 allowed to launch voice and broadband services and thus provide triple-play services. Telecom incumbents, however, were not permitted to launch cable-tv or IPTV services in their concession areas, which frustrated their entry into the triple-play market. Since telecom operators were not allowed to broadcast linear IPTV service over their telecom networks, their only option to set foot in the media segment was by launching VoD services. This situation, however, changed drastically in August 2011, as the Brazilian senate passed a new law (PL 116, formerly known as PL 29). The long-awaited bill unifies pay-tv market rules, enables the arrival of telecom operators in the cable TV market and creates a national content quota policy, among other issues. GVT and Oi are already preparing to launch IPTV services in the short term, while Telefónica has already launched IPTV though FTTH via cable arm TVA. B. Restrictions force telcos to partner with potential future competitors Regulatory restrictions on IPTV have forced telecom operators to rely on third parties to provide video services. These commercial alliances allow telcos to position themselves in the pay-tv and triple-play markets and to compete with pure triple-play providers in a quicker and less expensive manner, without having to roll out their own IPTV services. In markets where telcos have their entry into the pay-tv segment blocked, alliances with DTH providers tend to be very popular. Often, in emerging markets, satellite television providers have significant market shares, and these players can offer PPV, NVoD and DVRs as well as extensive VoD libraries, with a broadband connection. Most incumbent operators in Argentina, Mexico and Brazil have opted for this strategy while they await a more favorable regulatory environment: Argentina: In April 2009, Telefónica and Telecom Argentina signed alliances with DTH/satellite pay-tv provider DirecTV to launch triple-play packages in their respective areas of operation. These commercial offers, available under the Trío and Superpack brands, respectively, are still operational throughout the market despite some initial legal problems. Mexico: In November 2008, Telmex signed an agreement with satellite TV operator Dish Mexico to offer fixed-line and broadband services, bundled with DTH/satellite pay- TV services currently offered by Dish Mexico. According to the terms of this agreement, Telmex only provides Dish with billing and collection services through the telephone bill. Brazil: The Brazilian unit of Telefónica reached an agreement in 2007 with local DTHsatellite TV provider Você TV to offer a commercial triple-play package including voice, broadband and media services in its area of operation. Eventually, the operator ended up developing its own DTH platform. PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 8

9 Exhibit 7: Commercial triple-play offerings from Argentine incumbents Telefónica and Telecom Argentina and from Telmex in Mexico, 2011 Sources: DirecTV and Telmex Although bundling services with a third party can help increase brand loyalty and hence reduce churn, it also presents a number of disadvantages for telcos: They lose control over the final product, and the revenue split tends to be quite unfavorable for them. This limits the magnitude of the discounts they can offer to the customers because these have a more significant impact on their bottom line. C. Telcos see VoD as a proxy to IPTV Launching VoD services has become the best strategy for some incumbent operators to enter into the media market. At a regional level, this strategy was first adopted in 2008 by Brazilian Internet service provider Brasil Telecom (now Oi) and more recently by Argentine incumbents Telefónica and Telecom Argentina (2011). In Argentina, we expect that this move will also be replicated by a handful of telecom cooperatives and former operator Telmex, now operating under the Claro brand. In fact, over the last few months, the latter has been upgrading its preexisting fiber network and now offers FTTH broadband in some neighborhoods of greater Buenos Aires (September 2011). These launches, however, are part of two different business strategies: Telecom cooperatives are launching VoD as a preamble to their future full pay-tv via IP, while, for Telefónica and Telecom, VoD is as far as they can go in the media segment (at least under current regulation). Telcos are not alone in the VoD segment because they compete with very experienced and much better positioned players in the media market, such as cable-tv operators or OTT PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 9

10 providers. As competition in the media arena intensifies, traditional pay-tv operators have rushed to increase the appeal of their offerings by launching VoD in preparation for the arrival of US video streaming provider Netflix. In Argentina, for example, VoD is being currently offered by several cable operators in association with premium content provider LAPTV, a joint venture formed by Twentieth Century Fox, Metro-Goldwyn-Mayer, Paramount Pictures and Fox Latin American Channels. LAPTV, which runs several film and television series channels such as Cinecanal, The Film Zone and Moviecity, offers its VoD service, Moviecity Play, to cable TV clients subscribed to the Moviecity premium pack. Exhibit 8: Overview of subscription VoD offerings available in Argentina, September 2011 Provider Telefónica Commercial brand On Video Contents Films, music concerts, documentaries, series Price (pesos) P39.9* Notes Service available to all Speedy broadband clients with connections of 1Mbps or more. Contents are available via set-top box and computer. Telecom Argentina ArnetPlay Films, music concerts, documentaries, series P40* Service available to all Arnet broadband clients via set-top box and computer. The subscription does not include new releases, but these titles are available on a payper-view basis from 16 pesos (US$3.8) each. Netflix Netflix Films, music concerts, documentaries, series P39 Clients can access the service via computer or game console (see Exhibit 9). LAPTV Moviecity Play Films, music concerts, documentaries, series P34-40** Service available to all Cablevisión, Supercanal and DirecTV customers subscribed to LAPTV s premium pack Moviecity. Users can access the service through any device connected to Internet (recommended speed is 3MB). *Does not include set-top-box rental **Cost of Moviecity premium subscription Sources: Operators, September 2011 After months of preparations, Netflix disembarked in Latin America and the Caribbean in September 2011 amid intense marketing campaigns. The service, which was first launched in Brazil on Sept. 5, is now available in 46 countries across the region. The company offers its video-streaming-only service for a monthly fee of US$8-9, depending on the country, more or less the same fee it charges to its subscribers in US and Canada, where it is a mass market product. Taking into account Latin America s lower per capita purchasing power, the service will be directed toward middle- to upper-class audiences with broadband connections and traditional pay-tv subscriptions. PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 10

11 Exhibit 9: Example of devices streaming from Netflix, 2011 Source: Netflix, 2011 It is difficult to assess at this point the success that Telefónica and Netflix s propositions will have in Latin America in VoD-only services because this segment is still at a very early stage of development, not only in the country but also in the rest of the region. The success of any OTT/VoD offering will depend on two main factors: 1. Availability of broadband connections fast enough to deliver streaming video. 2. Understanding of regional customers content preferences to build an offering for which customers are willing to pay. The major challenge here would be not to treat Latin America as a unique market with homogeneous characteristics there are many differences in content preferences and consumption patterns. In Argentina for example, where broadband penetration of households is among the highest in the region (36.8% at year-end 2010 and 43.5% in 2011), and where there is such a strong pay-tv culture, we expect that selling VoD without a linear programming element will be a great challenge for telcos. Customers will continue to demand a traditional full-service TV offering, so few will buy a monthly subscription to have VoD alone. It is also important to take into account the extended availability of free illegal content in the country that customers can stream from online platforms, such as Cuevana.tv, or buy on the streets of any major city (e.g., pirated DVDs purchased on the streets are typically available for P10, about US$2.4). PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 11

12 Market detail CASE STUDY: Argentina Telefónica VoD Local incumbent Telefónica has been the first operator to exploit this regulatory gap in Argentina by launching in December 2010 On Video, a video-streaming service available to all its Speedy ADSL broadband clients with Internet connections of 1Mbps or over, although the operator recommends the service for connections with speeds of 3Mbps. For a monthly fee of P39.9 (US$9.50), On Video customers can stream unlimited content from a media library including films, documentaries, music videos and concerts. Customers also have the option to purchase additional content, such as premium content and films in HD, on a per-use basis (see Exhibit 11). Contents can be visualized on a TV, via set-top-box provided by the operator, or on a computer with a broadband connection (i.e., desktop, laptop). Telefónica presents On Video as a value-added service to complement its broadband offering, rather than a stand-alone service designed to compete with traditional pay-tv offerings. Therefore, Telefónica s VoD service follows a business model more similar to the one adopted by Netflix, which launched its VoD services in Argentina on Sept. 7, The VoD streaming provider, in fact, entered the market with a very similar offer to the one launched by Telefónica in terms of features and price (P39), and it will be competing directly with the incumbent s VoD service. Exhibit 10: Examples of Telefónica and Arnet commercial IPTV offers in Argentina, 2011 Sources: Telefónica and Arnet Telefónica plans to eventually launch On Video in other countries of the region where it has fixed operations, with the closest launch scheduled for Brazil and Chile. Since, in most of these countries, Telefónica does not face restrictions to launching IPTV services, its VoD service will be positioned as a complement to its linear pay-tv service rather than its broadband services. In this case, the operator will be able to benefit from the experience accumulated in its home market, Spain, where it already offers pay-tv services via IPs (Imagenio) as well as VoD contents (Imagenio Videoclub) on a pay-per-view basis. PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 12

13 Exhibit 11: Telefónica s IPTV footprint in Latin America and Spain, Q Country Service Subscribers* % of broadband customer base Brazil IPTV via DTTH 11,110 <0.01%** Chile IPTV via DSL 372, % Spain IPTV via DSL 784, % * Subscribers as of end of December 2010 **Over total broadband base (DTTH and DSL) Sources: Telefónica Q and Pyramid Research CASE STUDY: Brasil Telecom s Videon In October 2006, while still waiting for a favorable change in legislation, telecom operator Brasil Telecom (now Oi) launched the first trials of its subscriber VoD service Videon for a small base of customers in Brazil. The telco which signed partnerships with a number of international content providers, among them MGM, Disney, Universal, DLA, Playboy, Turner and Viacom (Nicklodeon and VH1), in addition to agreements with Brazilian producers such as TV Cultura, Lumiére, SESC TV, the Ministry of Education and TV Escola offered a vast library with 18,000 VoD titles consisting of general interest, adult movies and music, drama and children's programming. At the time of the commercial release, in September 2008, Videon cost roughly R49.90 (US$25) per month, while pay-per-view contents, which were available for viewing for a 24-hour period, cost R8.90 ($4.45) for new releases and adult content, while older contents were priced at R2.90 ($1.45). This strategy was aimed at gaining a better understanding of customer preferences in the country while preparing its platform to launch full IPTV services. Regulatory restrictions, however, were not lifted within the expected time frame, and Videon failed to take off without the support of traditional linear TV. Roughly six months after its commercial release, the Videon service had reached a customer base of only 400 subscribers, and the telco discontinued the service and shifted its media strategy, focusing on the deployment of a pay- TV strategy built upon its merger with Oi, which offered satellite pay-tv services. PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 13

14 Conclusions Key findings Although IPTV technology has been gaining popularity in Latin America, it is still in the early stages of development, with 0.2% of households in the region subscribed to IPTV services as of the end of December The explanation behind Latin America s underdeveloped IPTV market is largely due to its low broadband household penetration levels and the existence of regulatory hurdles in some of its largest economies, such as Mexico and Argentina. As of the end of 2010, Colombia was Latin America s most developed IPTV market, with a household penetration of nearly 1%, followed by Chile with 0.7%. Moving forward, we expect Mexico to move to the top of the ranking as regulatory hurdles for Telmex clear, helping boost the country s penetration rates from 0.7% in 2010 to 4.9% by Regulatory restrictions on IPTV have forced telecom operators to rely on third parties to provide video services. These commercial alliances allow telcos to position themselves in the pay-tv and triple-play markets and compete with pure triple-play providers in a quicker and less expensive manner, without having to roll out their own IPTV services. In markets where telcos have their entry to the pay-tv segment blocked, alliances with DTH providers tend to be very popular. Launching VoD services has become a valid strategy for some incumbent operators to enter the media market. At a regional level, this strategy was first adopted in 2008 by Brazilian Internet service provider Brasil Telecom (now Oi) and more recently by Argentine incumbents Telefónica and Telecom Argentina (2011). Recommendations Telcos In countries where regulatory restrictions on IPTV are still in place, partnering with satellite DTH providers continues to be a good strategy for entering the media/video segment. Cable companies Focus on network digitalization so you can improve and increase premium content delivery and offer VoD services to an increasing share of your customer base before telcos launch full IPTV services. DTH providers Partnering with telcom operators continues to be an excellent option for increasing your current product portfolio and attracting/retaining pay-tv customers. Operators should also consider developing good premium content offerings and VoD capabilities for their customers in order to attract a greater chunk of household spend, before OTT providers such as Netflix strengthen their presence in the region.. Author: Eulalia Marín-Sorribes, Research Analyst (emsorribes@pyr.com) Editor: Matt Donnelly, Managing Editor (mdonnelly@pyr.com) Support: (info@pyr.com) 14 PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7

15 Related resources Why a Fixed/Mobile Fight to the Death Does Not Make Sense for Latin American Operators Telecom Insider published June 2011 Latin America has historically been a follower when it comes to technology adoption. The region is usually two to five years behind the developed world when it comes to new products and services that involve technology deployments in the telecom industry. But now, for once, Latin America is taking the leadership in mobile broadband adoption, and the impact will be as hard to predict as it has been when trying to forecast uptake across other technologies in other regions. This Insider explores the many reasons why Latin America skipped the high fixed Internet penetration level market phase before mobile broadband uptake, as seen in other markets. Latin America Media Forecasts Forecasts updated quarterly With telcos and mobile operators increasingly offering TV and video services, Pyramid Research s Media Forecasts are designed to provide competitive intelligence on the pay-tv and mobile TV dynamics for 60 countries as well as regionally and globally. The Media Forecasts track demand patterns for free and paid TV services over terrestrial, satellite and mobile platforms worldwide, providing market share information at both the technology and operator levels as well as five-year adoption and revenue projections. Data from these Forecasts is available online for subscribers to our DataTracker service. Latin America Fixed Communications Forecasts Forecasts published quarterly Our Fixed Communications Forecast products provide a complete picture of wireline voice and data communications in each of 19 Latin American markets. The Excel output includes five years of historical data and five years of market projections for metrics such as demographics and economic trends, penetration of broadband and narrowband lines, Internet users, business users, voice telephony lines, VoIP, PCs, IPTV and revenue. We believe our Fixed Communications Forecasts are superior because they capture granular data gathered through extensive field research and use a thorough methodology consistently applied to all markets. Data from these Forecasts is available online for subscribers to our DataTracker service. Why Cloud Computing Services Are Good for Operators and SMEs in Latin America Telecom Insider published July 2011 Cloud computing can help operators in Latin America reduce their internal costs and develop competencies that can help them sell these same services to small and midsize clients needing to become leaner and more agile in a global marketplace. And since cloud computing rides on top of the broadband networks being built out by operators today, it provides another important way for operators to achieve a greater return on their investment. This report examines what cloud computing is, the framework behind this model and identifies the main drivers behind its adoption in Latin America. Three case studies look at fixed operators in Mexico that offer cloud services with an eye to what they understand to be cloud computing, the main reasons they adopted cloud computing, and the different services they offer. TV Anywhere: How the Internet and Mobile Technologies Will Change the Pay-TV Industry Research Report published October 2010 In this report, Pyramid Research analyzes trends and strategies related to IPTV, which include how emerging Internet TV and established pay-tv offerings are both parts of a broader market dynamic that places content providers, Internet access providers, pay-tv service providers and even consumer electronics suppliers together as collaborators and competitors, sometimes both at once. It analyzes technological and behavioral trends for viewing content on a wide variety of devices, describes and compares the latest devices and software for delivering and distributing content and examines Internet TV business models in detail. Developments and opportunities related to the growth and implications of Internet TV for all of the players are also discussed. Argentina: Affordable Mobile Broadband Is a Huge Operator Opportunity Country Intelligence Report published March 2011 Argentina: Affordable Mobile Broadband Is a Huge Operator Opportunity offers a precise, incisive profile of the Argentine converged telecom, media and technology sectors based on proprietary data from our research in the Argentine market. It provides detailed competitive analysis of the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies. Published annually, this study provides a comprehensive view of the communications market by analyzing key trends, nearterm opportunities and upcoming risks factors. To learn more about Pyramid Research s product offerings and how they can be of service to your company, please contact sales@pyr.com or visit us on the Web at PYRAMID RESEARCH LATIN AMERICA TELECOM INSIDER VOL. 3, NO. 7 15

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