During the long run-in to next week's Americas Com conference in Rio de Janeiro, I naturally look fairly closely at the competitive landscape in most the countries of Latin America. In the mobile space, this can be summarised in many markets as a battle between varying combinations of three companies. Two of these are telecoms giants - America Movil and Telefonica. The third is a smaller business headquartered in Luxembourg, Millicom International Cellular.
Millicom, whose services across Latin America are branded Tigo, is present in El Salvador and Guatemala and Honduras, where its local operations are market leaders. In South America, the company is present in Bolivia, Colombia. and Paraguay. Millicom has the largest market share only in the last of these three South American markets.
Earlier this week, in an interview with Investor's Business Daily, Millicom CEO Marc Beuls denied that larger competitors enjoy overwhelming competitive advantages: "Size isn't a reason for any of our competitors to be more successful in these markets than us. In Latin America, we compete against two giants, America Movil and Telefonica. This industry has more to do with innovation and launching new products and services, not so much technology, because much of that is the same among operators."
Having visited two Tigo-branded cellcos' HQs back in April (in Paraguay and Bolivia), I was disappointed not to have secured the participation of either for next week's conference. Frankly, across the group (in Latin America, Africa and SE Asia) we find Millicom subsidiaries to be a little wary of speaking or otherwise having a very visible presence at our conferences. We hope to resolve that in 2009.
Beuls says that "it was only three years ago that we started focusing on Africa and began investing substantial amounts of money. We've been able to improve our market position in most markets, the only exception being Sierra Leone. In Ghana, our largest market in revenue, we're No. 2 out of four operators. We're No. 3 in Tanzania, with 22% share, and gaining ground on the two largest operators."
Noting Vodafone's move on the Ghanaian market, the interviewer asked Beuls whether bigger operators have an edge because they can purchase mobile phones in large volumes and sell them in retail stores priced as low as $20. Beuls responds: "We don't play the handset game. We don't sell any handsets in Africa. The handset supply is there. A lot of the phones you find at (retail) dealers are second-hand, used phones. You can get a mobile phone at any price, a used one for $10 or a new one for $200. There is no need to get involved in that part of the market, whereas in Latin America operators are involved in the phone business."
Buels was asked whether bigger groups enjoyed advantages around roaming. Zain's promotion of services across national boundaries was mentioned, something which is now more relevant for Millicom given the Kuwaiti-headquartered cellco's presence in some 15 African countries.
Beuls argues that in the prepaid segment in Africa there is not much value in roaming: "Those customers are not mobile, they're not traveling. Maybe they're going from town to town, but not out of the country."
I am not closely involved in our Africa-specific events. These are managed by my colleague Julie Rey. However, I am close enough to the action to say confidently that October's Africa Com conference in Cape Town looks set to be bigger, busier and more exciting than ever. I daresay some of the questions mulled over this week by Millicom's Beuls will be discussed on stage and offline at the event.