Latin America’s digital ecosystem expands

May 18, 2022

Latin America’s digital ecosystem expands
Luisa headshot

Luisa Muneratti

SVP – Iberia and Latin America

I was recently invited to speak at one of the seminal events for the mobile ecosystem in São Paulo. Titled MobiXD, the event brought together senior executives from leading mobile carriers and digital brands like Meta and Google. The agenda was focused on the latest developments in apps and the subscription economy in Latin America. During my talk, I attempted to unpack some of the latest trends focusing on mobile content and payments.

Latin America is witnessing an unprecedented wave of digitization thanks to the surge in smartphone penetration and resulting mobile data consumption. By 2025, data traffic is expected to grow five times to 30 GB/ month for every smartphone, according to GSMA Intelligence. This data consumption is also transforming the nature and volume of entertainment content being consumed on affordable Android-based smartphones in the region.

Explosion in streaming video and gaming

Streaming video is set to surpass linear tv, with OTT subscriptions slated to grow to over 110 million by 2024, according to Statista. A survey conducted by consultancy Netscribes shows that by 2021 the streaming market in Latin America is likely to reach $7 billion ($5.5 billion for video and $1.2 billion for audio). Brazil will continue to be the biggest market in the region with 36 million of those subscriptions coming from the country. Netflix is the dominant OTT player in the region, even though the market share is expected to shrink due to intense competition from regional players like Claro TV and Blim. Netflix is expected to have 48.4m by 2026, ahead of Disney+ (32.5m), Amazon Prime Video (19.4m), HBO Max (10.2m), and Apple TV+ (8.1m). Claro Video, the streaming platform owned by Mexican telco América Móvil, is expected to have 3.9m subscribers by 2025. Mobile gaming is yet another category growing at a healthy clip of almost 11%, given a fillip with the rollout of faster, lower latency 5G networks.

Rise of digital payments

A fintech revolution has blossomed in Brazil’s most significant and historically underbanked market, making it easier for consumers to adopt digital payments. Launched in November 2020, Pix launched by the central bank is an instant-payment system that allows consumers and merchants to receive money using a QR code. In April 2022, 118 million people, or two-thirds of Brazilian adults used the platform. According to Mastercard, a credit-card giant, Brazil reduced its unbanked population by 73% during the pandemic. The rapid adoption of Pix has meant a faster shift toward digital payments, including instruments like direct carrier billing. And Pix will pave the way for other countries in the region to emulate and adopt digital payments at scale, thereby accelerating both mobile commerce and mobile content consumption. Transaction volumes have spiked to $91.1billion and are expected to grow at almost 15% until 2025, according to Statista.

OTT partnerships with mobile carriers

Most content brands recognize they may not have mobile carriers’ distribution prowess and scale in new markets. And that is why they rely on partnering with carriers, especially when entering new markets. Omdia[i] estimates that Netflix had as many as 24 OTT bundling partnerships across Latin America in 2021, ahead of Amazon Prime Video with 19. América Móvil started bundling Netflix within the mobile plans offered by its Claro subsidiary in Brazil in 2019, while Telefónica and Vivo have 14 similar partnerships in the same country alongside Oi (nine) and Claro Brasil (five). In Mexico, Totalplay has nine OTT partnerships, says Omdia (most service integrations into pay-TV platforms), Televisa, and América Móvil, four each. Disney+ was integrated into regional services from operators including Telmex, Izzi Telecom, Telcel, and Telecom Argentina from its launch in November 2020.

At DOCOMO Digital, we specialize in making payment and subscription bundling partnerships between mobile carriers and OTT brands happen. And our experience in the region has enabled me to share many such examples during my talk at the MobiXD event. I was enthused by the delegates’ energy and the quality of the discussions that ensued, and we all agreed that the digital revolution in the region is just getting started.


[i] TBI Tech & Analysis: Where next for Lat Am as OTT overtakes pay-TV?, TBI, 4th October 2021

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