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February 11, 2010
Claro’s Q4 2009 financial and operational results showed that its performance in Central America has remained relatively flat despite a challenging economic environment and fierce competition. The operator closed 2009 with 9.5m subscribers, and the fourth quarter showed the largest net adds since Q3 2008 (see Exhibit 1).
Exhibit 1: Claro’s revenue (fixed and mobile) and total mobile subscribers in Central America, 2008 and 2009
Source: Claro
In terms of financial margins, the operator still has a lot to do before claiming victory. Its revenue remained roughly flat on a quarterly basis for 2009, evidence that mobile revenue and data are starting to compensate for the decline in fixed voice services. Nevertheless, margins remain slightly shy of 2008 levels (an average of 43% in 2009 compared with an average of 45% in 2008), showing that more emphasis on maximizing revenue per user is needed in a business that relies heavily on economies of scale. We believe that recent commercial strategies — such as giving away airtime with purchases and handset subsidies focused on postpaid subscribers — are consistent with the operator’s effort to improve profitability. However, the Central American mobile market is extremely competitive, with all mobile operators going after the same high-end subscribers.
In the fixed market, leveraging its large PSTN customer base in Guatemala, El Salvador and Nicaragua to gain bundled broadband and pay-TV subscribers is critical in Claro’s fight against cable operator Amnet (Millicom). As described in our Q4 2009 Fixed Forecasts for El Salvador, Guatemala, Honduras and Nicaragua, with less than 10% of households subscribed to a broadband service and less than 20% subscribed to pay-TV in Central America, both markets remain largely underpenetrated and represent an untapped opportunity.
— Jose Magana, Senior Analyst
Related resources:
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.
Latin America Mobile Operator KPI Forecasts
Forecasts published quarterly
Our Mobile Operator Key Performance Indicators 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 subscription totals, market shares, net and gross additions, prepaid and postpaid subscriptions, business subscriptions, data ARPS, aggregate ARPS, prepaid and postpaid MOU, churn and total service revenue — all broken down for the mobile operators in the respective markets. We believe our Mobile Operator KPI Forecasts are superior because they capture granular data gathered through extensive field research and use a thorough methodology consistently applied to all markets.
Latin America Mobile Demand Forecast
Forecasts published quarterly
Our Mobile Demand Forecast products provide complete pictures of demand trends for 19 geographical markets in Latin America. The Excel output includes five years of historical data and five years of market projections for metrics such as GDP, mobile penetration, subscriptions (by operator, type of package, technology), ARPS and total mobile service revenue (data and voice). The Forecasts are based on extensive field research and use a consistent methodology across all markets, aiming to capture the total spending, from an end-user perspective, on mobile communication services in each market. Data from these Forecasts is available online for subscribers to our DataTracker service.
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