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Expanding Footprint of Cable TV and DTH Operators Enhances Prospects for the Latin America Pay TV Services Market Notes Frost & Sullivan - Innovative Low-priced Plans Can Offset the Lack of Government Incentives for the Market
Expanding Footprint of Cable TV and DTH Operators Enhances Prospects for the Latin America Pay TV Services Market Notes Frost & Sullivan

 

PRZOOM - /newswire/ - São Paulo, Brazil, 2011/09/05 - Innovative Low-priced Plans Can Offset the Lack of Government Incentives for the Market.

   
 
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The Latin America pay TV services markets are expected to witness fast-paced growth, stimulated by the increased geographic coverage from cable TV and direct-to-home (DTH) operators. Although pay TV services penetration in urban areas is already high in Latin America, it is still limited in non-urban areas and small and medium cities, and investments by cable TV and DTH operators are likely to drive the growth of pay TV services in those underpenetrated areas.

New analysis from Frost & Sullivan (ipcommunications.frost.com), Latin America Pay TV Services Markets 2010, finds that the market earned revenues of $9.62 billion in 2009 and estimates this to reach $19.13 billion in 2015.

"Although the currencies of the top-six economies in Latin America - Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela - suffered important devaluations in 2009 due to the global recession, the revenues of the Latin American pay TV services market rose by 4.9 percent the same year," says Frost & Sullivan Industry Analyst Renato Pasquini. "The bundling of services is one of the reasons that helped cable TV operators retain customers during the economic crisis."

Where cable TV and DTH networks coexist, there is growing competition among operators to improve the availability and quality of services. This has contributed to more innovative service offerings and price reductions.

The entry of telecom operators in the pay TV market will increase the trend of convergence and service integration, causing a proliferation of triple and quadruple-play services, thereby reducing the regular price of telecom services and boosting household penetration of pay TV service.

As the market is expected to reach a saturation stage in some countries in the following years, growth rate is expected to decline in the foreseeable future. Companies are likely to focus on minimizing the decline of average revenue per subscriber (ARPS), caused by competition and by the expansion of the service with prepaid and lower price offerings, with the development of value-added services, such as video on demand (VoD), high definition TV (HDTV) and pay-per-view (PPV).

To reach distant geographic areas and small cities, pay TV services operators need to make investments that include the costs of licenses, networks, equipment, marketing and sales, among others. The heavy tax burden over pay TV services, especially in Brazil, and the difficulty in obtaining return on investment (ROI) for service providers on the implementation of networks in far flung areas and small cities challenges operators to gain scale and offer convergent services over networks. Unless there are government incentives and tax reductions that stimulate investments and attract service providers, most operators, cable TV operators, for instance, will not be able to reach these areas.

"In the current scenario, Latin America pay TV operators have to negotiate with content providers and suppliers to launch innovative lower priced plans and even prepaid plans, which can minimize the impact of the lack of government incentives and the high taxes for pay TV services and help operators gain scale," says Pasquini. "Investments in wireless technologies and hybrid set-top-boxes with Internet access for video streaming will also enable lower price services aimed at low-income users."

If you are interested in more information on this study, please send an email to Tatiana Brull at tatiana.brull[.]frost.com, with your contact details.

Latin America Pay TV Services Markets 2010 is part of the Communications Services Growth Partnership Service program, which also includes research in the following markets: Latin American Mobile Services Markets Outlook, Latin American Datacommunications Services Markets, Latin America Mobile Content Markets, and Latin American Broadband Services Markets. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents.

Latin America Pay TV Services Markets 2010 / N8C7

 
 
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Expanding Footprint of Cable TV and DTH Operators Enhances Prospects for the Latin America Pay TV Services Market Notes Frost & Sullivan

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