November 25, 2011
Leave a comment
| Share this article
The Latin American Challenge
Birdstep is committed to Latin America!
Together with our partnership with Ericsson, Birdstep is in the right place, at the right time with the right products and resources. We hired a Latin America Sales Director, Juan Alvarez end of last year. We opened a local São Paulo, Brazil office and hired a local presales/project management resource. And we furthermore adapted our products to fit the local market requirements.
Entering any new market brings new challenges, but we believe Latin America is a very worthwhile endeavor.
Why expand into Latin America? Latin America is a vast mobile market, second in size only to Asia, and what’s more, it’s still growing rapidly. As of the end of 2010, there were more than 585 million mobile subscribers in Latin America, with Brazil showing a 10 percent year-over-year growth and 115 percent mobile penetration. Also, 3G growth in Brazil in 2010 was 237 percent and 4G Americas estimates overall 3G growth in Latin America for this year to be more than 90 percent.
With all this growth, the Latin American market is a great opportunity, but in order to take advantage of the opportunity, there is much you must be prepared for. Here are some things we have learned.
On a practical level, there are cultural challenges for a company based in a different part of the world. Obviously, success in Latin America requires the ability to speak Spanish, Portuguese and English fluently. You also need deep knowledge of the diverse local cultures and telecommunications markets from sales, project management and marketing perspectives. Without this, you can’t successfully navigate and negotiate between your company’s culture and the local cultures. Developing knowledge of the region requires resources in region and close contact with customers, prospects and partners. Relationships have to be built and there are no shortcuts, just time and dedication.
Financially, in general, Latin American operators have to make do with less. In the mobile market, there are more prepaid subscribers (85 percent) than in the U.S. and Europe, which contributes to a lower ARPU ($16). By contrast, the ARPU in Europe is $34 and in the U.S., $50. Operators will also have to manage high import taxes, about two or three times more than operators pay in the U.S.
While a top tier U.S. operator may have a floor of people dedicated to a single product or product line, in Latin America you may find one person responsible for more than 10 products. In response, operators expect closer collaboration and anticipation of their needs. They want full solutions, not just a product handed over for them to integrate themselves. They also expect agility in meeting demands that may change frequently.
Overall, operators in the region fully expect you will work with them as they are. You can’t ask them to work with you the way you are working with your customers in Europe and the U.S. You must adapt to the culture and the financial realities. If you can do so, it is well worth the effort!
Together with our partner Ericsson in Mexico & Latin America, Birdstep is successfully addressing each of these challenges - with the recent new launch in Mexico as an strong indicator of success.