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Latin Americans find answer in cell phones

Residents of Latin America are embracing cell phones in huge numbers as an alternative to the spotty service that mars land-based phones in the region.

Residents of Latin America are embracing cell phones in huge numbers as an alternative to the spotty service that mars land-based phones in the region, according to a new report.

That market for cell phones is exploding, according to a new study by market research firm Dataquest, as a result of falling prices on cell phone services and the land-based problems. The total Latin America market for cell phone handsets is projected to reach 24.5 million units this year, according to Dataquest.

Sales of handsets to Latin American countries topped 9.8 million units in the first half of 1999, according to the survey. Phones from Nokia, Ericsson, and Motorola accounted for 78 percent of sales.

Analog handsets were selling strongly in the first half of this year, garnering 54 percent of sales, but Dataquest predicts that digital sales will steadily pick up market share in the second half of the year. Analog phones likely will account for only 29 percent of all phone sales in 1999, the study said.

"Operators have introduced aggressive prepaid plans that make wireless services accessible to subscribers from across the full socioeconomic spectrum of society," Bryan Prohm, senior industry analyst for Dataquest, said in the report.

Among handset manufacturers, Nokia is the most popular in Latin America, with more than 34 percent of the market. Following Nokia is Motorola with 26.6 percent, Ericsson with 17.3 percent, Philips with 17.3 percent, and Qualcomm with 3.4 percent of the market, according to the report.

"In a region of the world with low landline penetration and a historical perception of wireless as a luxury item, the sudden affordability of mobile [phones] has naturally led to extraordinary increases in demand," Prohm said.

The growth of cell phone handset sales, driven by the sharp discounts on pricing plans and aggressive marketing, has resulted in the emergence of the gadgets as a full-blown consumer electronics market segment, Prohm says, noting that the Latin American market represents 500 million potential customers.