New Market Research Report: Argentina Telecommunications Report Q2 2010

PRLog (Press Release) - Apr 08, 2010 -
Argentina's placing in our Business Environment Rankings fell to sixth in Q109 as it reached 100% penetration reducing the future growth prospects for the market. The political and economic situation has also deteriorated, reducing the country risk score placing Argentina further down the rankings. As the global recession hits the Argentine government is looking to increase spending while the popularity of Cristina Fernández's government is continues to decline. Nonetheless Argentina benefits from a highly urbanised population that has helped the growth of telecoms services in the country, making it one of the most developed markets in the region. The introduction of 3G services has been boosting revenues for operators and will help average revenues per user (ARPUs) to rise as subscribers increase their use of value-added services (VAS). Meanwhile, the anti-trust commission has ruled that  Telefónica's acquisition of a minority stake in  Telecom Italia (TI) does contravene the rules set in place when the state-owned incumbent was privatised in 1990. Telecom Italia has a stake in  Telecom Argentina (TA) while Telefónica owns rival incumbent  Telefónica Argentina SA (TASA). Cross ownership was prohibited by the law that privatised and created the incumbents. Telecom Argentina has already indicated it would seek redress if it faces sanction over Telefónica's stake in Telecom Italia. At the time of writing there was no indication of how the regulator and competition commission intended to proceed. The news is certainly another blow to the operators as they face declining revenues and a shrinking market. In Q308 fixed-lines in service began to decline, in line with  BMI expectations and we believe it is unlikely the market will see any significant recovery. Argentina's fixed-line incumbents will face additional competition when cable TV operator  Cablevisión begins to offer voice services in April 2009. While Telecom Argentina and TASA are prohibited from offering pay-TV services, there have been a number of announcements of pay-TV operators entering the fixed-line market. This is unlikely, however, to have any great impact on the market's decline as voice services will serve primarily to encourage loyalty from existing subscribers. The incumbents will feel the greatest impact of this and are likely to step up their calls for broadcasting licences in order to offer tripleplay services. Although the Argentine mobile market has reached maturity there is still growth potential. Operators will increase their focus on VAS and postpaid take-up in order to guarantee future revenues, but  BMI expects the market to continue expanding well beyond the 100% penetration point. We forecast that by 2013 the mobile market will have 54mn subscribers and a penetration rate of almost 130%.

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