Millicom registered an increase in revenues of 7.1% year-on-year despite a 4.4% decline in Central America

22 Oct 2010 • by Natalie Aster

London - In 2009, Millicom registered an increase in revenues of 7.1% year-on-year despite a 4.4% decline in Central America. An increase in taxes (VAT), a reduction in interconnection rates in El Salvador and Honduras, and increasingly saturated market conditions combined to negatively impact Millicom’s performance in Central America. In 1Q10, Millicom has continued its strong performance, reporting a 16.2% year-on-year increase in revenues. This positive revenue growth has been backed by strong performance in Chad and Tanzania in Africa and in Colombia and Bolivia in South America. Stabilizing economic conditions and the resulting strengthening of currencies also positively affected Millicom’s revenues. The organic revenue growth in local currency was 11%.

Millicom is focusing on increasing customer penetration of its fixed broadband services and aims to cross-sell fixed broadband to its existing mobile and cable TV subscribers. To this end, it has introduced bundled offerings and has started rebranding some of Amnet’s products to leverage the high brand recognition of Tigo in the region. Millicom aims to address the high demand for mobile broadband services through 3G. To push mobile Internet adoption, it offers both monthly flat- rate and usage-based data packages.

The report “Millicom” by Ovum provides with the market study on Millicom (a diverse mobile operator with operations in a number of different geographic regions), its primary markets and investments in Africa.

Report Details:

Millicom

Published: June, 2010
Pages: 16
Price: USD 895

Report Sample Abstract on Value-added services:

Millicom considers VASs to be a powerful tool to stabilize its declining ARPU by generating additional revenue streams. It also believes that targeted VAS offerings can help reduce churn and improve customer loyalty.

To exploit the full potential of VASs, Millicom customizes its offerings according to both country and specific customer segment. Its VAS offerings range from ringback tones and sports updates to balance transfers and interactive 3G services such as mobile TV. In addition, Millicom has initiated a marketing drive to educate both sales representatives and customers about its VAS offering. In 2009, it trained approximately 4 million people across Latin America in the use of its VASs. We consider this to be an important initiative as it improves adoption by familiarizing end users with its services.

The strategy has worked well for Millicom. In 1Q10, VAS revenue increased by 40% year-on-year to represent 21% of total mobile revenues, up from 16% in 1Q09. Going forward, VASs will remain a prime revenue driver for Millicom’s business in the region. In addition, we believe that as subscriber growth starts to slow in Africa, some of Millicom’s successful VAS strategies could be replicated in those markets.

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