Caribbean EVDO & CDMA Roaming Market: Potential Revenue: 2005 2010 Jose F. Otero Signals Telecom Consulting CDMA Roaming Forum Rio de Janeiro, Brazil April 18, 2005 Prepared for:
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Agenda Project Scope The Caribbean Region Liberalization Present Liberalization Positive Developments CDMA Roaming Potential Aruba Bahamas Cayman Islands Conclusions
Project Scope Caribbean EVDO Revenues Caribbean CDMA Roaming Revenues Target Operators for CDMA Network Deployment Country Profiles Anguilla Antigua & Barbuda Aruba Bahamas Barbados British Virgin Islands Cayman Islands French Antilles French Guiana Grenada Honduras Netherlands Antilles St. Kitts & Nevis Saint Lucia St. Vincent & the Grenadine Trinidad & Tobago Turks & Caicos
The Caribbean Region
Liberalization Present Asymmetric development throughout the region Delayed entrance of competition in the English speaking Caribbean Young regulatory entities: education is needed! Liberalization is just beginning Guyana, Trinidad & Tobago, Suriname, Bahamas, etc. Liberalized Markets Regulation impacting Opex/Capex Number portability, E911, etc.
OECS Commercial Mobile Operations 1Q05
Liberalization : Positive Developments Rapid increase of the mobile telephony subscriber base with most markets surpassing 70% penetration levels; Benefits to consumers Improvement in coverage Improvement in QoS Introduction of new services Introduction of new technologies Diversity of subscription plans Telecom operators new paradigm
CDMA Roaming Revenues Caribbean Total CDMA Revenues by Service $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $- 2005 2006 2007 2008 2009 2010 EVDO Revenues $2,575,262 $5,509,650 $8,755,040 $12,541,699 $16,063,392 $19,512,424 Canada CDMA Roaming $15,925,092 $15,992,046 $16,127,713 $15,891,334 $15,664,289 $15,364,455 US CDMA Roaming $73,328,832 $78,911,508 $82,994,819 $83,979,680 $90,430,416 $90,490,151
Target Operators Main target for deployment of CDMA network for roaming should be incumbent mobile operators: Most challenged by the arrival of competition at the hands of pan- Caribbean operators such as Cingular Wireless & Digicel Lack of large quantities of GSM 850 MHzenabled handsets limits the ability of these networks of capturing roaming revenues New entrants to mobile arena Could use CDMA roaming as a additional captive revenue to speed-up the operator s ROI Could leverage CDMA network to provide WLL services ILECs, ISPs, CATVs
Aruba Population: 71.218 (July 2004) Area: 193 Km 2 Political Status: Language: Dutch Overseas Dept. Dutch & Papiamento Two operators offering mobile services: SETAR GSM (GSM 900/1800/1900 MHz) and Digicel (GSM 900/1800 MHz). Although Cingular Wireless has not mentioned Aruba on its expansion plans for 2005 the island fits into the pan- Caribbean operator regional strategy.
Aruba Aruba - Tourism by Region of Origin Canada & US provide 68% of all incoming visitors; 58% of these visitors stay overnight. Caribbean 4% Other Regions 1% Other Europe 1% Canada 3% South America 14% Western Europe 10% Northern Europe 2% USA 65% 99% of all overnight visitors arrive by air with 4,36% being business travelers. 13% of visitors originate in countries with GSM at 900/1800 MHz. The Netherlands holds the largest share of this group as it provides 8,6% of the total visitors to Aruba. Curacao provides 1,63% of the total visitors to Aruba.
Aruba Aruba Total CDMA Revenues $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- 2005 2006 2007 2008 2009 2010 EVDO Revenues $86,418 $195,051 $350,836 $557,575 $743,002 $905,621 Canada CDMA Roaming $793,886 $794,425 $798,404 $784,116 $770,331 $753,028 US CDMA Roaming $9,281,850 $9,994,496 $10,516,205 $10,642,751 $11,462,251 $11,471,767
Bahamas Population: 299.697 (July 2004) Area: 13.940 Km 2 Political Status: Language: Commonwealth Nation English Telecommunications market still is a monopoly in most services. Privatization and liberalization efforts have failed. Mobile incumbent Batelco launched GSM 1900 MHz in February 2004, but coverage needs to improve to reach the same level of service of the old TDMA network Digicel & Cingular Wireless interested in entering the market
Bahamas Bahamas - Tourism by Region of Origin One of the most attractive roaming markets in the Caribbean with more than 4.5 million annual visitors. Caribbean 1% Canada 4% Other Regions 1% Western Europe 2% Southern Europe 1% Northern Europe 3% Asia 1% USA 87% 87% of all the travelers visiting the Bahamas arrive from the US and 4% from Canada. Meanwhile, only 6% of visitors originate in countries with GSM at 900/1800 MHz. 69% of all visitors arrive by cruise ships for a 8 12 hours stay. Business travelers represent 2,76% of all visitors; and 33% of visitors stay overnight.
Bahamas Bahamas Total CDMA Revenues $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- 2005 2006 2007 2008 2009 2010 EVDO Revenues $189,315 $427,295 $768,571 $1,221,470 $1,627,682 $1,983,929 Canada CDMA Roaming $3,103,012 $3,099,299 $3,110,616 $3,053,371 $2,998,051 $2,929,151 US CDMA Roaming $28,297,074 $30,444,472 $32,014,600 $32,392,478 $34,878,340 $34,899,138
Cayman Islands Population: 43.103 (July 2004) Area: 262 Km 2 Political Status: Language: UK Overseas Territory English Considered one of the most important and competitive markets in the Eastern Caribbean Cayman Islands has three mobile operators offering service: Cable & Wireless (GSM 850/1900 MHz), Digicel (GSM 900/1800 MHz) and Cingular Wireless (GSM 850/1900 MHz). 4 th mobile licensee TWTC is not expected to launch services in the foreseeable future as the investors are betting to their success in their Guyana operation, Cel*Star.
Cayman Islands Cayman Islands - Tourism by Region of Origin 79% of all the travelers visiting the Cayman Islands arrive from the US and 5% from Canada. Asia 1% Canada 5% USA 79% Caribbean 7% Central America 1% Western Europe 1% Southern Europe 1% Northern Europe 5% 85,98% of all Caribbean visitors arrive from Jamaica; 70,38% of all European visitors arrive from the UK. Only 7% of visitors originate in countries with GSM at 900/1800 MHz. Business travelers represent 4,5% of all visitors; 86% of all visitors arrive on cruise ships.
Cayman Islands Cayman Total CDMA Revenues $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- 2005 2006 2007 2008 2009 2010 EVDO Revenues $39,086 $88,220 $158,680 $252,186 $336,052 $409,603 Canada CDMA Roaming $761,881 $777,749 $779,005 $783,432 $769,610 $756,284 US CDMA Roaming $8,086,416 $8,703,256 $9,154,521 $9,263,505 $9,975,464 $9,982,444
Conclusions Caribbean mobile operators interested in increasing their revenues will start considering focalized network deployments that will allow them to provide roaming services to visitors subscribed to CDMA mobile services. Key potential Caribbean CDMA roaming markets include Aruba, Bahamas, Cayman Islands and the British Virgin Islands. While intensive data usage is not likely for vacationers, image and location based services are well positioned to stimulate future growth. Due to the expected growth in CDMA market share of US mobile subscribers through 2010, the potential CDMA roaming revenues will grow from 45,2% of all US roaming revenues in the region in 2005 to 51,3% in 2010. Business travelers are small but vital Segment of US CDMA roaming revenues. While representing only 4,6% of all travelers, business users generate 18,7% of all Caribbean basin CDMA roaming revenues
THANK YOU! Jose F. Otero President Signals Telecom Consulting Jose.Otero@SignalsConsulting.com Tel: +1 786 866 9729