Latin America :In some Latin American mobile markets, such as Argentina and Chile, voice service has begun to reach saturation levels. As such, Value Added Services (VAS) like
Mobile TV represent an alternative that allow operators to increase both revenues
and customer loyalty. This situation has gained even more potential thanks to the
roll out of 3G networks in the region.

The Mobile TV offering provided by Latin American mobile operators is focused on
Unicast services running in 2.75G networks (Oi – Brazil & Telcel – Mexico) and 3G
networks (Entel PCS – Chile & lusacell – Mexico). Signals defines Unicast as those
Mobile TV transmissions that are distributed only via the use of operator data
networks and 2.75G networks as those offering EDGE services.

This impedes the implementation of this type of service on a massive scale. Signals
points out that as long as the Unicast type business model, running in 3G networks,
is the only Mobile TV alternative in the marketplace, this type of service will not
generate significant revenues for the mobile market. As such, by 2013, Mobile TV
revenue would reach US$ 1.8 billion in the seven largest Latin American
telecommunications markets, a figure that would represent just 2.7% of total sector
revenues.

The launch of 3G networks as from 4Q07 has acted as a new opportunity for the roll
out of Mobile TV services. Signals believes, however, that said offering is still in the
development stage and it is unlikely that such can be offered on a massive scale due
to the following:

- The focus on high consumption users. This is demonstrated by high access
costs, both for handsets as well as for the service itself.

- The absence of easy to understand user plans. As of 1Q08, there was no
uniform type of invoicing among operators which offer this product as a 3G
bonus (TIM – Brazil), per time of use (Entel PCS – Chile) or per KB
downloaded (Digitel – Venezuela).

- Programming that isn’t very attractive, without a defined target market, with
few channels available and lacking exclusive programming for mobile.

Moreover, the service has not received a significant push by operators. America
Movil, for example, does not have Mobile TV available via all its regional affiliates
(Claro Chile, for example, doesn’t offer the service and it could in order to compete
with that offered by Entel PCS) and Telefonica does not make a point of pushing this
service in its most important markets (only Uruguay has a Mobile TV offering running
on UMTS/HSPA). As such, Signals believes that the development of Unicast Mobile
TV will be tied to coverage gains and 3G network scales and will only see real growth
possibilities as from 2010 – 2011. Prior to this, operators will not encourage its use
via alternative mass offerings because this would suppose a strong usage of trunk
broadband which could cause possible network congestion problems.

The service is however taken advantage of by operators in order to improve their
image as innovators (something achieved by Entel PCS – Chile) and give them
greater chances of incorporating new 3G users by giving the service away free of
charge as a bonus for 3G use. Moreover, the launch of new handsets, with
multimedia capacities (like 3G iPhone), suppose an opportunity to increase the
demand for Mobile TV.

With this scenario in mind, growth expectations for the service are based on the
possible roll out of dedicated networks, because these do not input spectrum
resources used by mobile telephony (although they do obligate operators to acquire UHF bands). Signals believes that mobile operators, mainly those enjoying a
regional scope (like America Movil and Telefonica) will possibly end up acquiring UHF
bands in order to develop dedicated networks. They will do so in order to reach
positions that are coordinated on a regional level with main world markets in order to
lowers service costs via the scale they hope to reach with this type of service.

Signals points out that the development of Mobile TV on dedicated networks still
poses many questions for the region. This is mainly due to the fact that only a small
group of countries have decided on a TDT norm (Brazil – ISDB, Honduras & Mexico –
ATSC and Uruguay – DVB), something which is fundamental for operators who need
to know where they stand in the face of the possible development of Mobile TV on
dedicated networks. Moreover, of the markets which have chosen a TDT standard,
only Uruguay (with the possibility of deploying DVB-H) has a technology that has a
business model appropriate for mobile operators with experiences that could be
repeated in the region.

Even supposing a roll out of Mobile TV dedicated networks, Latin American operators
will have to adjust some points of how they present their corresponding offering to
include programming oriented exclusively to mobile services, the possibility of
offering lowers cost handsets, and the implementation of service invoicing models
that are easily understood by the user.