According to research from Informa Telecoms & Media’s Ari Lopes, Latin America (LatAm) has experienced some of the world’s fastest growth with mobile market penetration rates, rising from 19% in 2002 to 110% in 2012. In 2013, Informa’s Marceli Passoni tells us that the LatAm mobile market will grow at 7.1%, and although voice remains the main revenue stream for operators accounting for 76% of service revenues, data revenues will increase a whopping 18% year-on-year, topping US$27.7 billion. Also, smartphone use is growing rapidly and expected to account for 46% of total handset sales in 2013 with the number of smartphone connections in LatAm increasing an astonishing 35% year-on-year in 2013, to 140.7 million.
While these numbers represent a significant opportunity for mobile network operators in the region they also point to a looming challenge. With much of the low hanging mobile fruit already picked in high-density metro areas, rural areas and lower tier metro markets are rapidly becoming the last untapped opportunity in the region. Additionally, the increasing affordability and prevalence of smart devices and their corresponding increased data growth rates will soon present LatAm operators in metro regions with the same problem faced in more mature mobile markets—namely, how to meet the growing bandwidth demand while also maintaining profitability. As market penetration rates continue to expand and approach saturation, competition for subscriber revenues increases, driving the need for operators to differentiate their services based on something more than just price.
Deep Packet Inspection (DPI) is a technology that is uniquely qualified to assist mobile operators with this maturing market problem for two reasons. First, DPI-enabled intelligent policy enforcement and management enables operators to better control network traffic, allowing them to optimize their existing infrastructure investments by preventing bottlenecks, delaying the need for costly new investments and maintaining subscriber QoE. Second, the granular visibility and analytics into subscriber traffic provided by DPI-based network intelligence solutions give operators valuable insight into consumer behavior, allowing them to create customized new sticky services that consumers want, thereby increasing revenues while reducing churn.
For example, online game usage has exploded in the region, with Mexico and Brazil exhibiting particularly game hungry appetites. Knowing this, operators could offer a gaming “happy hour” service for a small additional fee whereby online video game usage is zero-rated during certain times of day or on certain sites when the network is less congested. This would not only increase revenues to pay for additional needed infrastructure but drive customer loyalty by creating a desirable sticky service. As LatAm’s hunger deepens for higher bandwidth applications like social media, online gaming, music and video downloads, this growth in bandwidth demand represents the next big opportunity for mobile operators in LatAm.