Like most of the Middle East and Africa, Latin America is skipping the 100% wired stage of telecoms. Governments in those countries were too financially unstable &/or corrupt to mandate buildouts beyond the wealthy enclaves and business districts of their major cities. The beauty of wireless is that it is so much less capital intensive. Consequently, wireless telephony penetration in LatAm now approximates 60-70%. Moore’s Law continues to reduce the cost/increase the functionality of handsets (and you can have either, but not both, as a consumer). In LatAm, prepaid service is a much bigger mode of payment for service, as it facilitates budget management. Also, calling party pays, not the one called. Finally, network convergence is driving all the margin out of the historically high margin voice telecom service (in late nineties 45% OPERATING profit was the norm), whether wired or wireless. (more…)