Telecommunications Market Entry in LatAm
Market Entry; Competitive Intelligence
Our client, a global long distance telco carrier was considering entry into a major LatAm telco market that was opening up for the first time to competition. Over six companies had pledged investments to back their market entry in an effort to take market share from a well ensconced incumbent player. Our client needed a realistic understanding of its prospects as a new competitor in the market.
Americas Market Intelligence (AMI) studied the strengths and weaknesses of each of the new potential competitors as well as the former monopolistic player who wielded enormous regulatory influence and would resist losing too much market share.
After interviewing major players, regulators, industry watchers, media and others, we prepared a war gaming exercise to try to predict the eventual market equilibrium the might be attained within 18-24 months after the market opened to competition.
AMI’s predictions were rather dire. We foresaw no more than 20% market share loss by the incumbent, to be split among six hungry competitors who would drive pricing into a tailspin. We advised our client to stay out of the market, which they did for several more years, saving potentially hundreds of millions of dollars in the process.
AMI’s findings revealed that the prospects for entering a specific new market were not favorable and the client avoided making an unprofitable investment.