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Mobile Internet Seen Taking Off Slowly in Mexico
Posted: 02-Jun-2000 [Source: Reuters]

[Two months after the launch of the Mobile Internet in Mexico the results are still mixed.]

Mexico City -- "Mexico's three major cellular phone companies are all launching wireless Internet services, but analysts say mobile Web services will catch on slowly and will not generate big revenues in the short term.

"Mexican cellphone use exploded in 1999, with subscriber growth of 128 percent to 7.6 million, but most of the clients buy blocks of ``prepaid'' calling minutes whereas analysts said the most likely wireless Internet customers are contract clients who are billed monthly.

"Given the small percentage of contract customers -- 20 to 25 percent in the biggest Mexican cellphone companies -- the impact of Internet services on the average revenues per user (ARPU), will be minimal in the first year, analysts said.

"In terms of impact it's very premature. I do not see a huge impact on ARPU or the companies,'' said Ronald Aitken, Latin America Telecommunications analyst for UBS Warburg.

"Analysts also said a relatively low number of cellphone users in Mexico have digital handsets equipped for Web surfing, and exchanging handsets will be expensive and slow.

"Grupo Iusacell (CEL.N), Mexico's No 2 cellular company, launched Web access services in March, and newer cellphone company Pegaso PCS followed in May.

"Telcel, the cellular division of phone giant Telefonos de Mexico (Telmex) (TMX.N), plans to launch the service mid-year.

"Iusacell, 37.4-percent owned by and fully administered by U.S. company Bell Atlantic (BEL.N), projects 2 million cellular subscribers by year's end, and expects 60,000 of them will be using Internet services.

"Iusacell officials expect Internet growth to boom in the next two years.

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