CAMBRIDGE, Mass., Dec. 3, 2010 /PRNewswire/ -- As mobile penetration in Latin America nears 100 percent, mobile remittance solutions represent a large opportunity for mobile operators in Latin America to generate incremental revenues and reduce churn, according to a new report from Pyramid Research (www.pyr.com).
Mobile Remittances: Network Operators Look to Cash In On a $60 Billion Market highlights why remittances represent a large opportunity for mobile operators, but require a significant paradigm shift in order to be fully realized. It also reviews the features that a mobile remittance service must include to be competitive, the current competition and why it will be a steep challenge to overcome, and the additional benefits of having such an offering in the marketplace.
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Due to the significant immigration to the US and Europe over the last 20 years, Latin America depends on family remittances to sustain local consumption. This has created a virtual bridge of capital from the host countries to Latin America, and in some cases the flows exceed 10 percent of nominal GDP. The flow of remittances has dramatically changed the economic structure of certain countries that rely heavily on the capital sent by these workers," says Jose Magana, Senior Analyst at Pyramid.
Pan-regional operator Telefonica utilized remittances as a growth engine to help the company quickly recover from the global economic slowdown. "Mobile operators are well-positioned to benefit from any service that requires access to users, since almost 100 percent of the population is covered by mobile networks," notes Magana.
"With an average banking penetration of 50 percent, and the advantage of an already-developed infrastructure, it is obvious that mobile players have first mover advantage over any other industry to provide a variety of additional services, including mobile remittances," indicates Magana. In addition, slowness in response from operators risks them being left out of the value chain or playing a low-value role in the equation, similar to what appears to be happening in the content and mobile advertising businesses.
SOURCE Pyramid Research