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 Friday, June 27, 2008

The number of mobile connections in Argentina is almost certain to have surpassed 40m at the time of writing, having reached 39.47m at the end of Q1 08. Furthermore, if Q2 net additions match last year's figure, then penetration will have broken the 100% barrier by the end of the current quarter, with Q1's figure standing at 97.3%.

Customers, America Movil vs. Telefonica, Q2 06 – Q1 08

Annual growth stood at 21.1%, an impressive figure given the maturity of the market, although exactly half the 42.2% rate recorded in the prior twelve months. Annual net additions totalled 6.87m, while on a quarterly basis there were just 0.89m new connections due to the combined effect of first-quarter slump and high penetration.

The biggest story of the quarter was the change in market leader, with America Movil's customer base overtaking that of Telefonica. At the end of Q1, AM had 13.99m customers to 13.75m for Telefonica, compared to Q1 07 figures of 10.93m and 11.68m respectively. As the graph on the left shows, the trajectories of the two companies over the past two years made the change in leadership all but inevitable, with AM outpacing Telefonica in terms of quarterly net additions for the past eight quarters. In fact, AM's Q1 08 figure of 511k was its lowest for three years, but Telefonica had an even worse quarter with just 125k net additions, its worst result since Q3 03.

Meanwhile, third player Telecom Personal - the mobile subsidiary of Telecom Argentina - added 216k to finish on 10.88m, while Nextel reached 0.85m thanks to record first-quarter net additions of 39k.

GSM dominates in Argentina, and as in the rest of the continent its domination has been steadily increasing. At the end of Q1 08, 92.9% of the total customer base was using GSM technology, up from 86.5% a year earlier. CDMA's proportion dropped from 7.5% to 3.8%, while AMPS and TDMA connections dwindled to just 0.8% from 3.9% a year earlier. W- CDMA, which was launched by Telecom Personal in Q2 07 and by Telefonica in Q4 07, had an estimated 0.15m customers at the end of Q1, giving it 0.4% of the country's total customer base. Finally, Nextel's iDEN technology improved its share slightly, from 2.1% to 2.2%.

Source: Cellular News.