How data bundles are dominating Latin America

Jun 18
How data bundles are dominating Latin America

Within the first half of 2017, smartphone adoption across Latin America and the Caribbean reached 59%, with a rapid uptake in key markets like Brazil and Mexico. By the end of the decade, the GSMA anticipates the region to hit 71%. When put into context, that’s an additional 171 million new smartphone users in the next two years. With this new-found acceptance and availability of modern technology, mobile network operators, distributors, retailers (and more!) need to be primed and ready to accommodate and supplement almost half a billion unique mobile subscribers across Latin America and the Caribbean, 80% of whom are prepaid phone users.

Demand for data

The region is seeing a steady growth in mobile data usage, attributed to this traction of smartphone ownership with over 35 million units sold in Latin America in the last quarter of 2017. A burgeoning popularity of social media (59% penetration rate in South America) is also a contributor to this adoption. In 2016, Latin America saw an overall mobile data usage growth of 64% and an accelerating migration towards 4G. The region’s mobile operators are beginning to reap the rewards of data consumption. Mobile top-ups and data are improving revenue for operators and satisfying demand.However, there is still lots of room for growth.

The boon of data bundles

Over 22 million residents of the United States originate from the Caribbean, Central, and Latin America. Typical migration trends from developing countries occur for the main purpose of moving to a more developed country in search of better employment, and in turn, economic opportunities to support loved ones back home.As a mobile operator, international mobile top-ups are a proven business case and seen as a value-added service that can offer a sizeable margin. With the typical transaction value often not exceeding US$15, these top-ups offer are a low-cost solution for the sending customer yet remain high value for the recipient. Ultimately, for the customer on the ground, international mobile top-ups are the most straightforward and cheapest way to send low values without facing hefty transactional fees. Due to the low monetary value nature of top-ups, customers are sending more frequently, generally making more than one transaction per month – resulting in a customer retention rate of up to 80%.An evolved product stemming from mobile top-ups is data bundles - packages containing a sliding scale combination of calling airtime, SMS and mobile data for internet access. Worldwide, but particularly across the Americas, there is a booming demand for data bundles. Consumers receive more value for their money and distributors can diversify and revamp their portfolio and suite of offerings. Data bundles last for varying periods of time, from one day to one month, and so, leads to an increase in the frequency of customer purchase. With no registration needed for the end-user and only the mobile phone number required, top-ups can be administered rapidly and with ease to any phone, anywhere in the world, at any time.As the end recipient, receiving a data bundle is a useful gift, considered a meaningful value, and making a significant contribution to the daily life of the receiver. While on the other hand, the sender has full control to ensure the amount sent is used for the given purpose.

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