Strategic Challenges in a Global Market
Chapter 6: Structural and Strategic Adjustment in Latin American Mobile Telecommunications
6.1 INTRODUCTION Latin America is generally held to comprise the countries lying south of the US border (together with the Falkland Islands). However, there is no clear separation between these countries and what is generically described as the Caribbean, which comprises roughly 25 (groups of) islands. Of the latter, few have large numbers of mobile subscribers – although the Dominican Republic has over 5 million – and hence the discussion that follows is essentially concerned with events in the main countries.1 Nevertheless, since the main thrust in what follows is to investigate the strategic behaviour of a small number of operators, it is where they operate that dictates the sample set of countries and islands, and as a consequence certain Caribbean islands have a signiﬁcant role to play. The pivotal event occurred in March 2004 when Telefónica tabled a bid for the Latin American assets of BellSouth at a cost of $4.5 billion in cash plus $1.5 billion of inherited debt – the withdrawal of US operators from overseas ventures is detailed in Chapter 8. BellSouth’s withdrawal from Latin America was, nevertheless, a touch ironic, since it had entered during the 1980s when the prevailing opinion was that it was a part of the world best shunned because of its dubious economic performance, and it was now withdrawing at a time when Latin American mobile markets were growing very rapidly. 6.2 BACKGROUND Through until the end of 2003, BellSouth was a major player in the Latin American mobile market, ranking third...
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