Michelle Clancy ©RapidTVNews | 19-08-2011

After a bleak 2009, 2010 represented a solid rebound for the Latin American region when it came to pay-TV service uptake, according to new research from Frost & Sullivan. And 2011 promises to be even brighter.

In 2009, the economies of all Latin American countries were impacted by the economic downturn, and it reduced the growth expectations of some countries that were intensely affected; impacts were felt in most of the industries, including the telecommunications market, Frost research reveals.

Now, movements by operators to supercharge their spending in the sector are likely to make CALA one of the hottest areas of investment.

For instance, Telefónica S.A. plans to launch full commercial IPTV services in Peru and Chile during 2011, as well as in Brazil, when allowed by the approval of PLC116. Telmex Internacional is integrating its cable TV, direct-to-home (DTH), fixed and mobile operations in Brazil as it has done in other countries in the region, allowing it to offer convergent bundles. And DirecTV, a traditional market participant in the premium segment, has had success in Latin America with a pre paid strategy and an increasing customer base.

Other cable TV operators are launching value-added services throughout the region to increase average revenue per subscriber and differentiate the offer.

Frost finds that the main drivers of the pay-TV market in Latin America are: Increased geographic coverage from Cable TV and DTH operators; competition among DTH, cable TV and IPTV; and bundles combining TV, fixed, mobile and broadband.

That's not to say operators don't still face some challenges. Frost notes that the main restraints are a lack of competition in remote areas and small cities, subscribers' demand for more and better services at the same price, and a dependency on content providers to create a compelling offer. Content acquisition remains expensive.