Mobile TV services grow in Mexico

Implications: According to the most optimistic scenarios, if the price of cell phones keeps falling, the earnings of mobile TV in the Mexican market will reach 18 percent of the total in Latin America, that is around 300 million dollars within five years.

Analysis: Mexico is becoming an interesting potential market for the mobile TV service through the cellular phone. According to an analysis of The Competitive Intelligence Unit, there are estimates that point to the more than 70 million users of mobile phones in Mexico, of which 7.25 could access this technology given the equipment that they currently own. Out of this number, 2.5 million could be interested in paying for the service.  

Currently, only two companies in Mexico offer mobile TV services to their clients: Telcel and IUSACELL. But it is likely than in the upcoming auction of frequencies issued by COFETEL, the Federal Telecom Commission, other firms such as TELEFONICA will look for a concession to be able to offer this service also.  

In Mexico there are more than 40,000 users of mobile TV. IUSACELL was the first company to introduce the service in Mexico and currently has largest number of clients due to its 3G CDMA technology. Recently, TELMEX also entered the market.   It is estimated that Mexico has around 29 million TV viewers that have access to some sort of pay TV service. Mexicans spend an average of 5 percent of their income in telecom services.  

Mexico already has the equipment, the networks and the contents. What is missing is the consolidation of elements to be able to make a wider offer of mobile TV services. Companies in the field are expecting that the regulatory authorities set aside spectrum to increase the supply of multimedia services and support a neutral technology that allow operators to choose the model that best suits their interests.  

Also, it would be important to deal with the pricing issue. One of the main barriers to the penetration on mobile TV in Mexico is the cost of the service and the equipment. Firms will have to undertake aggressive marketing campaigns and offer attractive programming to the users. The production of more contents that are specifically designed for the cellular phone is needed.