Latin American CDMA Decline Continues As Vivo GSM Service Takes off

n Q1 2007 the number of CDMA customers in Caribbean & Latin America (CALA) declined for the first time. Data for the second quarter shows that this was result was not a statistical aberration, but rather a consequence of the fact that almost all of the region's CDMA champions - including, most significantly, Vivo - have now chosen to adopt GSM technology.


After a 2.5% decline in the CDMA base in the first quarter, the total fell another 3.7% in the second quarter to reach 61.2m. In absolute terms, there were 2.4m disconnections on a net basis, of which slightly more than half were accounted for by Vivo. The CDMA disconnection rate at CALA's largest CDMA operator is accelerating, amounting as it did to 0.58m in August 2007 alone, after a similar figure in July. The adoption of GSM at Vivo saw more than 3m new connections made in Q2 2007, helping net additions to a new record of 23.84m in the quarter, almost 40% more than the total number of net additions at the continental level.

iDEN was the only other technology in use in the region to see growth in the period, with another 0.25m connections made. The AMPS/TDMA base declined by almost 20% between March and June, with 4.6m disconnections as customers switch in droves to GSM services.

At the end of Q2 2007, more than 75% of mobile customers in CALA used technologies from the GSM family, up from 62% a year earlier and 45% a year before that, as the total base exceeded a quarter of a billion. The Q2 2007 figure includes W-CDMA customers for the first time as the region's first 3GSM networks launched in Argentina and Mexico during the quarter. The contribution of the CDMA customer base to the overall total declined 5pp from 23% to 18% over the year to 30th June 2007, although the part of the base using EV-DO technology increased its contribution from 3.21% to 3.33% during the quarter as customer numbers rose by almost a million in the three month period. Meanwhile, the rapidly declining AMPS/TDMA group went from constituting 14% to just 5.6%.

At current rates, it is likely that the CALA customer base will be around 90% GSM by the end of the second quarter 2008.


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