Latin America always has been a very strong region in terms of adopting technological devices as well as contracting mobile services –carriers. In 2013 the region reached a new market category that seemed impossible a few years before: in just 10 years, the region doubled its income, reaching 170 million dollars a year.
The region, in terms of population, represents 8% of the world population and in terms of number of devices, reaches 10% of the global share.
Mobile penetration reached 104%, a percentage inferior only to that of Central Europe – Oriental where the rate is 154%, in Western Europe the metric reaches 129% penetration.
With these numbers, the Latin American market seems like a dream that every entrepreneur focused on mobile technology looks for. However, these numbers should be analyzed in correlation with others in order to have a complete and realistic view in order to identify opportunities in the creation of products and services.
The broad acceptance of mobile telefonees in Latin America can partly be understood by a basic infrastructure problem, that they made it easier for people to acquire a mobile phone than a landline telephone.
The Latin American culture itself is an emerging economy, unlike others such as the United States and Europe that have to create an opportunity within the purchase of additional services, like an improvement in the quality of life. For Latin America, the concept of investment quality will be linked to the ability to control it.
Hence, 82% of cell phone lines in Latin America continue to be prepaid, and Argentina is the only country where additional services produce higher revenues to voice calls.
In this context, whoever wants to do business in Latin America from the mobile perspective, should take this cultural habit into account. Saving is a smart way to invest money and time; therefore any application that is able to tie into this concept has ample opportunities to be successful in the region. Facebook and, above all, Whatsapp are very clear examples of this.
Entrepreneurs that are now thinking of running their applications in Latin America, should prepare them for a market that is about to explode: LTE or 4G technology. Market forces will require operators to deploy technology rapidly.
If we analyze the type of content that Latin America prefers, the first thing to take into account is that the average inhabitant of the region spends a lot of time on social networks and is increasingly consuming more video content.
This means that these applications or content that are able to capitalize on the spaces where people are already consuming a high percentage of their time online are more likely to be sustained over time.
To put it plainly, it is better for entrepreneurs to think of products that work well with Facebook, Linkedin, Instagram and Twitter –we must take a closer look at users via SMS, despite what the reports say– and not try to be the “new Facebook”, “new Instagram” or the “new Linkedin”.
In my experience as an entrepreneur focused on mobile development and accelerating companies with this development model, I have found that the opportunity for entrepreneurs to start monetizing mobile products in the region, without a doubt comes from on heels of mobile operators that are currently the most important digital payment gateway.
Think from day one on a product and business model that can articulate the rules of the existing game, where carriers are partners of exploration.
To close this analysis it should be noted that these differences or gaps in the Latin American market – which is not only given by banking and the ability to make payments online –is an opportunity to think outside the global box “made in Silicon Valley”, and to suggest solutions that improve the quality of life of the greater population.
We are faced with a great opportunist not only in terms of business, but in terms of generating emerging, distinct, creative processes.
The trend is that everything that we develop today grows, because the ground from which we start now is high, interesting and profitable.
About Antonio Peña
Antonio Peña studied Law at the University of Buenos Aires, In 1998, he co-founded Novacash, the first no-bank debit card in the region which exited in 2000. In 2003 he co-founded Netpeople, a mobile content aggregator in Latin America that was acquired in 2007 by Zed. He also co-founded MundoMovil, e-platform for prepaid products that was acquired by Cargaya.
He currently leads the company builder for startups based in mobile, Overboost, and chairs Mobile Monday Buenos Aires.