Why is Cellular growing more in Argentina than Brazil?
Brasil and Argentina are the biggest cellular markets of South America. Brazil has a population of almost 5 times bigger than Argentina and finished 2006 with 3 times more cellulars.
| Brazil | Argentina | |
| POP | 187,665 | 38,971 |
| GDP per capita (US$)* | 5,176 | 5,745 |
| Cellulars | 99,919 | 31,510 |
| Pre-pay | 80.64% | 91.3% |
| Density | 53.24 | 80.86 |
* Source: FMI.
Even though both countries GDP per capita are similar to the cellular density in Argentina in the end of 2006, that was 50% bigger than Brazil.
Argentina surpassed Brazil in density in 2004 and has been presenting higher taxes of growth.
The growth of Argentina in 2004/2005 is, in part, because of the fast financial economic recovery. This growth continued, however, faster than Brazil in 2006. In Jan-Feb/07 Argentina with net adds of 1,793 thousand cellulars surpassed Brazil and had 1,268 thousand cellulars of net adds. Consult In Brazil- Is Cellular decreasing gorwth because of Vivo?
This difference of growth between both countries happen although Telefonica, América Móvil and Telecom Italia control the 3 biggest cellular operators in these countries.
| Argentina | Brazil | |
| Telefonica | Movistar | Vivo |
| América Móvil | CTI | Claro |
| Telecom Italia | Personal | Tim |
Telefonica is leader in both countries. In Argentina got the leadership in 2004 after acquiring Bell South operator. Movistar grew 34.4% in 2006 while Vivo grew -2.5 % in 2006.
CTI is the operator that had bigger growth in 2006 in Argentina (52%). Claro grew 28% in 2006. CTI surpassed personal in 2004, while Claro was surpassed by Tim in the same year.
Tim disputes the leadership of brazilian market, grew 26% in 2006, while Personal occupies the 3rd position in Argentina's market, grew 37%.
América Móvil (CTI and Claro) and Telecom Italia (Tim and Personal) control the operators that had grown in 2006 in Argentina and Brazil. These operators present, however, different indicators for both countries.
| EBITDA Margin |
ARPU R$ | MOU | Pre-pay | |
| Claro | 13.3% | 28.0 | 72 | 83% |
| CTI | 19.3% | 23.3 | 135 | 90% |
| Tim | 24.6% | 37.0 | 95 | 79% |
| Personal | 22.0% | 28.3 | 94 | 66% |
Note: Ebitda margin in 2006 and other indicators to 4Q06.
Claro presents ARPU bigger than CTI, but CTI presents MOU and EBITDA margin even bigger.
One of the main reasons of cellular growth in Argentina is the price of pre-pay. The price per minute of recharge varies from R$ 0.30 to R$ 0.48 according to the value of the card, while in Brazil the price of pre-pay minute is close to R$ 1,00.
TIM surpass Personal in all of the indicators, except in percentage of pre-pay. Personal has been growning lesser than CTI in pre-pay, comparing to Brazil they have similar prices.
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