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UK set top maker set to gain from Latin America pay TV surge

Keeping up the Pace

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Last year in Latin America pay TV growth overtook virtual the entire world, with the revenues from Pay TV in Latin America growing at about $1 billion a month, while the region added some 6.7 million new homes.

And funnily enough it is a UK set top vendor, Pace, the number one in the world, which is best positioned to make hay in this market, because it already has a 50 per cent market share in Latin America.

Although India and China added more pay TV homes, because the amount paid for subscriptions is so low there, Latin American pay TV operators enjoyed revenue growth as big as those two markets combined.

All of Europe added just 4.7 million new pay TV homes last year across all technologies, cable satellite and IPTV, compared to the 6.7 million added in Latin America and virtual stagnation in the US.

These are the findings of a new report from UK research company Rethink Technology Research which says that Latin American subscriptions will rise from 38 million today to almost double by 2014, at 67 million.

This accounts for a huge influx of manufacturing in the region and new representation for most Pay TV equipment manufacturers there in the past two years, desperate not to miss out on the bonanza of a continent with an economy growing almost as fast as China.

UK set top maker Pace will try to make further inroads, says Rethink, by integrating its new Conditional Access software from its Latens acquisition into set tops at the low end of the market.

The Average Revenue Per User (ARPU) in Latin America varies between $50 a month to $76 a month, way higher than the tiny $6 a month payments most Satellite TV operators get in say India And it is this high ARPU that is driving set top sales there.

Although the US has almost stagnated in new subscribers for pay TV, the APRU there rises as prices go up and extra services are added, and US Pay TV revenues are growing at about $500m a month, but this is now only half of the growth of Latin America.

The report Pay TV in Latin America – Economic Miracle or another False Dawn shows that much of the power is concentrated among three operators in the region - DirecTV, Telmex International and Spain’s Telefonica.

In technology terms this is a market that cable is currently winning, but can’t continue to win. Today it has a 59 per cent market share of a 38 million home market; by 2014 it will have grown in absolute numbers, but its market share will have fallen to a mere 39 per cent as satellite dwarfs it, and IPTV finally takes a firm grip in some key markets. ®

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