This document provides an overview of key market data and regulatory statuses for telecommunications markets across Latin America. It summarizes broadband, mobile, pay TV, and telephony subscriber statistics for 2009 in countries like Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Venezuela. It also outlines major M&A activity and key drivers for growth in voice, data and connectivity in the region, noting the need for further network upgrades and investments to meet rising exponential demand.

1. MARKET INSIGHT: KEY MARKET DATA,
STATISTICS AND GROWTH PATTERNS
Marco Pangos
marco.pangos@ieee.org

2. Regulatory status – Argentina
Page 2
New Regulation for Universal Service
Radio electrical Spectrum
– Cooperative Mobile Services
VoIP services
Triple Play
– Cable TV vs. Telcos
Define new Tariff policy to promote growth
Define Present & Future Investments Financing
Risk of Nationalization of Carriers TASA - TECO

3. Regulatory status – Brazil
Page 3
Voice
– Number Portability ( approved Mar’07 - < Mar’09)
– VoIP services
– Efficient use of the spectrum
Data
– Auction of 3G (Band H) & WiMax frequencies
Video
– Bill 29 – Pay TV Law
Tariffs
– Cost Modeling for Interconnect Network Use
– Weighted Average Cost Of Capital (WACC) Regulation

4. Regulatory status – Chile
Page 4
Universal Access to Telephony
VoIP service regulation whenever it involves need of a PSTN
Number Portability – Fixed and Mobile
New Law to allow to subsidize telecommunication projects of interest to
the demand (today’s Chilean Law only allows to subsidize the offer)
Law declaring Internet neutral from the flow of the services it carries.
Generation of indicators of quality of service for Internet access operators.

5. Regulatory status – Colombia
Page 5
Definition of relevant markets and dominant position in convergent
markets of telecommunications
Regulation measures for generation of wholesale telecom supply
Number Portability (approved May’08 – until 2012)
Regulation of convergent networks
Regulation on cyber-security
Numbering plan for nomadic telephony

6. Regulatory status – Ecuador
Page 6
Identification of prepaid mobile subscribers
Number portability (approved May’08)
Regulation for Infrastructure sharing
Technical Regulation on Access to Emergency Services
Regulation of the Centers of Internet Access and Cyber Cafes.

7. Regulatory status – Peru
Page 7
Number Portability (approved Apr’07 - > Jan’10)
New Regulatory framework for Digital TV
Approval of a bill for the development of telecommunication services in
rural areas
New Classification of Services
Regulation for Infrastructure Sharing

8. Regulatory status – Mexico
Page 8
Cofetel auction of 1900 MHz band for fixed wireless or mobile telephony
Cofetel auction of WiMax frequency band (3.4 GHz – 3.7 GHz)
Cofetel auction of 3G frequency band (1.7 GHz – 2.1 GHz)
Obligation to register PrePay mobile phone users
Number Portability (> Jul’08)
Fundamental Technical Plan of Interconnection and
Interoperability
The Regulator does not exist

9. M&A activity in Latin America
Page 9
Argentina
– Telmex – Ertach
Brazil
– Oi – Brasil Telecom
– TIM - Intelig
– NET - Big TV
– Vivo - TIM
Chile
– Telmex - ZAP TV
Colombia
– Telmex – TV Cable – Cable Centro – Cable Pacifico – Superview- SatelCaribe
Mexico
– Telmex – MVS alliance
– Telefonica – Televisa alliance
– Telefonica – Axtel alliance
Venezuela
– Telmex – CANTV
– Risk of nationalization of other carriers
Conclusion
– Search for quadruple play offer, lower cost for subscriber, fidelize voice & data users adding video/TV services.
– May become monopoly if not regulated

10. Argentina - 2009
Page 10
BASE
BROADBAND MOBILE PAY TV
TELEPHONY
31.0% 48.0% 34.2%
30.0% 42.0% 28.7%
27.0% 52.0%
34.8%
Cooperatives 5.3%
Rest of mkt 12.0% 4.7% 2.3% 48.0%
Total (‘000) 3.348 9.345 43.369 6.022

11. Brazil - 2009
Page 11
BASE
BROADBAND MOBILE PAY TV
TELEPHONY
25.2% 26.5% 29.8% 8.5%
18.6% 19.1% 3.7%
20.7% 34.5% 16.2%
22.7% 15.0% 25.7% 50.4%
30.1%
24.2%
1.9%
0.7% 2.9%
Rest of mkt 12.1% 4.8% 0.4% 6.2%
Total (‘000) 9.862 41.563 150.641 6.162

12. Central America - 2009
Page 12
EL
GUATEMALA NICARAGUA PANAMA COSTA RICA HONDURAS
SALVADOR
22.2% 16.7% 31.1% 49.5%
35.0% 25.6% 68.9% 42.2%
42.8% 42.6% 57.8%
14.8%
0.3%
50.5%
100.0%
Total Mobile 10.079 5.858 3.123 3.053 1.714 4.954
lines -2009
(‘000)
Total Fixed lines 1.355 1.080 248 447 1.437 822
(2007)

13. Chile - 2009
Page 13
BASE
BROADBAND MOBILE PAY TV
TELEPHONY
10.0% 63.5% 43.4% 17.5%
38.5%
40.9% 18.1% 59.6%
0.8% 1.6% 18.2% 12.2%
2.3% 4.0% 38.4%
2.1% 4.4%
4.7% 5.9%
0.4%
7.2%
Rest of mkt 0.3% 2.5% 3.5%
Total (‘000) 1.430 3.333 15.491 1.475

14. Colombia - 2009
Page 14
BASE
BROADBAND MOBILE PAY TV
TELEPHONY
20.6% 29.2% 24.5% 4.5%
21.2% 18.1% 16.4%
19.9% 3.9% 66.3% 57.5%
20.7% 26.2%
9.2%
6.7%
5.5%
Rest of mkt 17.6% 22.6% 9.4%
Total (‘000) 1.920 7.817 40.740 3.189

15. Ecuador - 2009
Page 15
BASE
BROADBAND MOBILE PAY TV
TELEPHONY
3.3% 26.4%
18.6% 53.3%
38.3%
6.6%
54.2% 69.5%
3.2%
0.1%
2.2% 70.1%
4.4% 3.5%
10.7%
Rest of mkt 14.1% 1.7% 19.8%
Total (‘000) 119 1.859 11.163 244

16. Mexico - 2009
Page 16
BASE
BROADBAND MOBILE PAY TV
TELEPHONY
0.3% 19.8%
76.1% 88.0% 71.5%
5.2%
3.5%
0.5% 2.0% 0.3%
3.6% 0.5% 11.9%
3.1% 0.3% 8.4%
23.6%
6.5% 1.5% 21.7%
1.6% 4.8%
0.3% 0.3%
Rest of mkt 8.3% 2.3% 34.1%
Total (‘000) 6.550 20.023 78.192 7.056

17. Peru - 2009
Page 17
BASE
BROADBAND MOBILE PAY TV
TELEPHONY
90.6% 96.1% 62.4% 73.4%
4.1%
1.1% 0.6%
3.1% 2.8% 34.5% 5.2%
0.1% 3.1%
6.2%
Rest of mkt 1.0% 0.5% 15.2%
Total (‘000) 732 2.900 17.000 891

18. Venezuela - 2009
Page 18
BASE
BROADBAND MOBILE PAY TV
TELEPHONY
0.3% 20.9% 37.3%
79.5% 77.9% 43.0%
19.7%
13.0%
20.2% 40.2%
33.4%
5.8%
Rest of mkt 1.2% 7.6%
Total (‘000) 1.312 5.896 28.232 1.800

19. Key drivers for voice and data in Latin America
Page 19
Substitution Fixed – Mobile
– The fixed-mobile substitution keeps growing
– The substitution effect is more accentuated in the base of the pyramid and in the young
segment
– UMTS vs ADSL
Broadband Growth
– Economic expansion, credit, incentives, etc.
– Diffusion of computers is a fundamental requisite for universal use
– Governmental actions might speed up the process of universalization
New Technologies
– 3G/LTE (4G)
– WiMax
– FTTx

20. Key drivers for voice and data in Latin America
Page 20
VoIP
– VoIP poses a threat to the fixed voice market, and tends to increase with the broadband expansion
– Phone-to-phone model via cable operators is clearly the largest threat among the VoIP players
– Broadband penetration and price are the key drivers of VoIP adoption
Erosion of the Business frontiers
– Bundles play a key role in the market and make sense to operators and clients
– Triple play will be the most expressive bundle and TV will play a core role
Content and aggregation
– SMS
Corporate Business Applications
– Require increased bandwidth and QoS
– For National/International traffic, private VPN and QoS are key requirements
The crisis boosts use of “free” products (Skype, You Tube)

21. Regional connectivity and capacity
Page 21
Limited capacity in Mexico and Central America.
Project Puebla – Panama
Very limited network flexibility
Lack of good connectivity at country level
Submarine Cables with good capacity and with
possibility to further expand its performance using
DWMD at access line
Incoming platforms present too high latency in nodes
Corporate demand requires for a technology upgrade:
– FR to VPN
– MTLS protocol
Capacity is measurable … what about demand?

22. Regional connectivity and capacity
Page 22
Latin America is increasing Internet use
The region needs to communicate with
the world
Market penetration is higher than the
worldwide average
Current trend is of fast growth

23. Regional connectivity and capacity
Page 23

24. Regional connectivity and capacity
Page 24
Cisco Forecasts 44 Exabytes per
Month of IP Traffic in 2012
Cisco’s Global Consumer Internet
Traffic Forecast

25. Regional connectivity and capacity - Conclusion
Page 25
2008 Latin American Capacity & Demand projections show:
Capacity is growing in a linear mode
Demand is growing in an exponential mode
Result: capacity reaching saturation much quicker than expected
Brazil may reach saturation by year 2011 at actual growth rates
Need for further network upgrades and new investments
Important : Need to negotiate as a Latin America economic block not
individually.
Emergent markets in strong need for communication and connectivity
Business will exist and grow as much as we can communicate regionally and
to the world

26. Obrigado - Gracias - Thank you
Marco Pangos
marco.pangos@ieee.org