The document summarizes an MVNO conference in Latin America held in Sao Paulo, Brazil. It discusses the MVNO landscape in Latin America, with a case study on Colombia. In Colombia, the top three mobile operators control over 90% of the market. Uff Movil is highlighted as the leading MVNO in Colombia, growing to over 350,000 subscribers through offering affordable international calling rates. Bancolombia later acquired a majority stake in Uff Movil to expand its digital banking and financial inclusion offerings. Fixed operators like ETB and UNE are also launching MVNOs to provide mobile services bundled with their existing offerings.

1. MVNO Latin America 2013
Sao Paulo
August 2013
GUGST
Ari Lopes
Principal Analyst, LATAM
Informa Telecoms & Media
Ari.lopes@informa.com

2. 8/27/2013 2
Agenda
1. MVNO landscape in LATAM
2. Case study: Colombia
3. Conclusions
www.informatandm.com © 2013 Not for reproduction without permission

3. 8/27/2013 3
MVNO Landscape in Latin America
www.informatandm.com © 2013 Not for reproduction without permission

4. 8/27/2013 4
Colombian market
www.informatandm.com © 2013 Not for reproduction without permission

5. 8/27/2013 5
Telecom market statistics
www.informatandm.com © 2013 Not for reproduction without permission
12%
64%
24%
13.1
12.4
9.1
0%
10%
20%
30%
40%
50%
60%
70%
Tigo Claro Movistar
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
Market share and ARPU Q1'13 - Top 3
Market Share ARPU
80%
20%
Prepaid
Postpaid
11%
66%
23%
MVNO Market Share
ETB Uff! Movil UNE
• Colombia has a penetration rate of
105%, Claro has been the leading operator
for more than 10 years, this is reflected at
its high EBITDA margin, 42% in Q1’13.
• As most countries in LATAM, the country
shows predominance of prepaid subs
(80%) and low ARPUs (no more than
USD13.1.
• MVNO market has around 535,000 subs in
Q1’13, Uff Móvil is the leader in this market
Tigo Claro
EBITDA Margin 37% 42%

6. 8/27/2013 6
Diversified MVNO landscape
www.informatandm.com © 2013 Not for reproduction without permission
MVNO
Colombia
Entrepren
eurs
Retailers
BanksYouth
Fixed
Operators

7. 8/27/2013 7
Uff Móvil
www.informatandm.com © 2013 Not for reproduction without permission
• Of all MVNO launches tracked by Informa Telecoms & Media since the start of
2008, Uff has experienced the strongest growth in its first three quarters.
Latin America, subscriptions for selected MVNOs, 4Q10 – 4Q11
Entrepreneur

8. 8/27/2013 8
Uff Móvil
www.informatandm.com © 2013 Not for reproduction without permission
Favourable
Regulation
Network
Capacity
Market
Concentration
• Informa estimates that since Nov’10 Uff Móvil has
grown to 350k subs.
• Market segment: Its main target was cheap
international calls for prepaid market. The target
was relatives of Colombians living abroad; the high
prices MNOs charged for this traffic also posed as
an opportunity to have a competitive and economic
viable pricing.
• Lean organization: Uff Móvil has 12
employees, and outsources almost all processes.
• In Aug’12 Bancolombia has acquired 70% of Uff
Móvil.
Entrepreneur

9. 8/27/2013 9
Uff Móvil & Bancolombia
Services offered by “ahorro a la mano”:
• International money transfer
• Money transfer to other accounts
• Receive payments
• Money deposit/withdrawal (ATMs&branchs)
• Prepaid top-up
• Pay utility bills
• No monthly maintenance fee, plus a basic health
insurance if certain balance is kept
• Savings account – pay interest
www.informatandm.com © 2013 Not for reproduction without permission
• Bancolombia has two goals with this acquisition:
Innovation and Inclusion.
• 1/3 of 48M Colombians do not have access to
the banking system
• Offer more and better services to Bancolombia
customers
• ‘Plan Fácil’ – Bancolombia customers have free
internet (2GB) and 300mins (local+North America)
• ‘Ahorro a la mano’ - launched in March, 19th – an
innovative m-banking solution
• Tigo and Claro also offers “ahorro...”, but UFF Móvil
customers have more benefits, like access to contact
center
Entrepreneur/Bank

10. 8/27/2013 10
ETB and UNE
www.informatandm.com © 2013 Not for reproduction without permission
• Fixed operators are among the most active companies launching MVNOs
worldwide, it offers a quick and relatively cheap way of adding mobility to its
portfolio at a relatively low CAPEX and without depending on spectrum
auction. Additionally, operators can use existing distribution channels.
• ETB and UNE are building its multiplay strategy.
• Main target is the existing customer base, mobile service is an add-on that
increases customer ARPU and positively impacts churn rates.
• UNE has launched its own LTE network (~52k subs), but keeps a MVNO on
Tigo 3G network.
• UNE and Tigo are merging, but in parallel UNE and ETB are bidding together
for 4G spectrum
Fixed
Telephony
Broadband TV
ETB 32% 14% 0%
UNE 24% 28% 23%
Colombia, market share for selected services, Q4’12
Fixed operators

11. 8/27/2013 11
Virgin and Exito
www.informatandm.com © 2013 Not for reproduction without permission
• Leading retailer in Colombia
• 484 stores
• 36,000 employees
• USD 4.8B in revenues (2011)
• MVNO launched in May, 15th
• SIM cards and top-ups in Exito stores (+80 cities)
and licenced distributors, but nation wide coverage
• Loyalty cards points redeemed for minutes
• International group focused on youth
segment, large experience with the
MVNO model, present in 10
countries, ambition is to build a
regional presence in Latin America
• MVNO will introduce Virgin’s brand in
Latin America
• Already has around 150,000 customers
in Chile, launched in Colombia in
March, Brazil is expected to be the
next country
Retailers / Youth

12. 8/27/2013 12
2.Conclusions
www.informatandm.com © 2013 Not for reproduction without permission

13. Conclusions
• Chile and Colombia are ahead of its neighbours
• The 3 biggest countries: Brazil, Mexico and
Argentina are still lagging behind
LATAM MVNO market has evolved at
different speeds …
• Uff “validated” the business model by having an
aggressive growth rate crowned by its acquisition by
Bancolombia
• It is likely that smaller companies will look to launch
its own MVNOs
…Colombia has already proved the
feasibility of the business model…
• Market concentration and regulation alone does not
explain MVNO success – Colombia and Chile have
completely different market and regulatory
landscape
• Vast majority of MVNOs have a lean cost structure –
they outsource, they leverage existing
brand, customer base and distribution channels
• Strong partnership between MVNO-MNO is key
…Lessons so far.

14. Thank you!