Digital LATAM Ripe for CVM Evolution

The volume of data generated every day in Latin America is enormous. Most of the countries in the region are in the middle of a digital revolution due to high mobile penetration, expanding IoT ecosystem, rising adoption of cloud, social media, and e-government initiatives. This data revolution is allowing banks and telecom companies to leverage Big Data and Analytics (BDA) capabilities for creating value for their customers, which in turn, promise to bolster their revenues while bringing down costs.

Telecom LATAM: Going digital

According to Analysys Mason, the telecom industry is going to grow to $140 billion by the year 2020. Mobile data service will overtake voice revenues by 2020, as it will be fueled by Latin America’s increasing internet and smartphone penetration. Similarly, LTE is making a big impact in LATAM, and it is expected that by 2020 most mobile SIMS will be on LTE. In Brazil, Chile, Peru, Venezuela, Argentina the rise of data consumption (on LTE) and fixed broadband services will drive service revenues. However, all markets are not on a similar growth path, with some growing at a slower pace than the others.

Segmenting the Markets

Basis data collected from GSMA Intelligence, the markets can be segmented into the following –

Growth Markets

By the year 2020, Latin America is expected to add 60 million new subscribers. Mexico (31%), Brazil (22%), Colombia (12%) and Peru (9%) will grow the fastest in the region. Growth catalysts include Latin America’s economic recovery, as well as the increasing uptake of mobile data services in the region..

Stagnant Markets

According to GSMA forecasts, growth will slow down or stagnate in Argentina, Guatemala, Nicaragua, Uruguay, Chile and Venezuela. The economy and saturated markets will contribute to slowing down of growth in the region.

Competitive Market

Of all markets, the Brazilian telecom market shows the lowest spread in Market share and ARPUs, which characterizes it as a highly competitive market. On the other end of the spectrum, we have market monopoly in countries like Mexico, Uruguay, Colombia, and Venezuela, which are dominated by a single operator.


In most developing markets telecom companies are struggling to maintain profitability. The market in Latin America is no different. The high cost of customer acquisitions, rising price wars, and increasing customer churn are some of the factors contributing to low ARPUs across the board. The years 2011 to 2017 were marked by new customer acquisitions, with double digit growth in several markets. However, in 2018, it is increasingly becoming clear that the industry’s long standing orientation for customer acquisitions have not worked, which is evident from low ARPUs and churn in the markets. The time has come for operators to strike a fine balance between acquiring new customers and catering to their existing customers in order to increase their profitability.

The advantage of CVM is that it is an end to end holistic solution that can be fitted to customer acquisition, retention or even up-selling and cross-selling in growth markets as well as markets showing the characteristics of having attained maturity.

Growth Markets

Brazil, Mexico, Colombia are adding new customers every-day. Telecom ARPUs in these markets are low because of the subsidies given to new customers, as well as retailer commissions. According to Strategy & analysis cutting off the payback period at eight months will yield greater than 40% saving on customer acquisition costs. In these markets, CVM solutions will help to evaluate the price elasticity of certain customers with regard to subsidies and credit which will help in reducing the payback period for new customers

Saturated Markets

In many of these countries, the market is saturated. Market penetration, which is estimated in % unique subscribers, is over 90% in Argentina, Chile, and Uruguay. By 2020, we expect more countries, like Mexico, Peru, and Colombia, to grow their base of unique subscribers. Once markets becomes saturated, it will become necessary for telecom operators to shift their focus towards retaining customers through dedicated, one to one campaigns, based on a holistic understanding of the customer’s past behavior.

Stagnant Markets

In stagnant markets, it is no longer profitable to increase market share. Instead, telecom companies must look to increasing profitability from their existing customer base. In general, the operators will have to strike a fine balance between aligning channel activities, optimizing customer contact and improve product portfolios.

What can Analytics do as of now in a predominantly pre-paid market?

Big data and analytics capabilities are helping operators to devise customized services, pricing plans, marketing campaigns, promotional strategies, with less effort and more success.

Since the telecom market in LATAM is largely a prepaid market, low credit can potentially lead to millions of dropped calls or terminated data sessions, which can easily lead to loss in operator revenues, or even worse, when the customer churns to the operator’s competitor.

An end to end CVM solution would leverage big data and analytics to mine actionable insights from customer data, and using that information to offer relevant and contextual services through the customer’s preferred channel.

This would mean capturing customer events on a real time basis, running analytics based on customer profile, and then orchestrating services like marketing automation, call completion services, e-payments, and financed telecom services that will help the subscriber to enjoy uninterrupted services on their mobile devices.

The use of AI and Machine learning will only help in optimizing the services further by optimizing services as well as delivery across the subscriber’s preferred channels.

LATAM Banking: Trending towards Inclusion

The year 2016 saw the exodus of a number of international banks from Latin America due to weak earnings, continuing losses, and stringent banking regulations.

This provided regional banks with a great opportunity to expand their business by increasing their focus on their customers. Key challenges before banks include acquiring and retaining “profitable customers” while keeping costs under check. However, all markets are not the same. Some are maturing fast, while some are still in the initial stages of growth. Basis data collected from Findex 2018, we’ve segmented the markets on the basis of their growth state and potential.

Matured Markets

These markets have grown the quickest in the region, with banking services reaching to over 60% of the population. In some of the countries the banking penetration has doubled in the period 2011 to 2016. The countries that belong in this group include Brazil, Uruguay, Chile, Venezuela and Bolivia.

Digital Adopters

Besides high bank penetration, these markets are characterized by higher than average mobile phone penetration, data consumption. Indecently, these countries have higher uptake of digital payments compared to other countries in the region. The countries in this group include Chile, Brazil, Venezuela and Uruguay. Digital laggards will include Mexico, Colombia, and Peru.

Growth Markets

Many of the countries have low banking penetration because of the lack of access to branches, or the lack of funds. Mexico, Colombia, Argentina, Guatemala are some of the countries that can be put into this bracket. However, these countries have a high mobile penetration, which provides an opportunity to leverage digital channels for providing banking to all.


CVM solutions are very flexible as they are applicable in a growing market as well as an emerging market. In a growth market CVM solutions are allowing banks to improve the payback period of their new customers. Similarly, in advanced markets, CVM solutions allow banks to explore newer source of revenues and increase their return on investments.

Growth Markets

In the growth markets of Argentina, Mexico, and Colombia the rise of Digital Only Banks promises to bring banking services to the financially excluded. Digital only banks will be in a better position to tackle major roadblocks to banking like lack of access, funds and trust, and thus helping in providing banking for all. CVM solutions will help to cater to these prospects in a cost effective and profitable manner by providing contextual, one to one services, like savings, loans, credits, transparently, without friction.

Matured Markets

In the advanced markets of Chile, Brazil, Venezuela, Uruguay, CVM can help banks to increase customer stickiness and increase the customer lifetime value. Here, banks can leverage customer data generated across chat services, facebook, SMS, email for creating a more engaged customer base. The benefits would be the following –

  • CVM solutions will help incumbent banks to deliver an Omni-channel, personalized and responsive digital experience to their customers.

  • It will allow banks grow value from their existing customer base by influencing monetary as well as relationship metrics.

  • CVM will provide banks visibility into customer intent and leveraging this information to influence customer’s behavior in line with business goals.

  • It will help in creating stickiness and customer value through upselling, cross selling new products and services like loans, and insurance.

A good example here would be a customer using his card or mobile wallet for online or offline payments. As soon as the customer swipes his card or pays for online goods, the banks will be able to initiate a real time offer or promotion that will help to incentivize usage of the card or digital wallet.

Similarly, in competitive markets, like Venezuela, Chile, CVM will help to differentiate through innovative services and products like loans, tailored savings plan, loyalty point management. In Chile, a leading bank is allowing its customers to redeem points at international online stores. In Venezuela, a leading bank is providing end to end loan applications on their mobile app, which is aligned to their customer’s contextual needs and requirements.

What can Analytics do in this market?

Big data and analytics can help banks in LATAM to measure near term gains for individual customer, as well as estimate future opportunities in growth markets. In matured markets, it helps in increasing wallet share by identifying relevant cross sell and upsell opportunities. Targeted marketing based on a better understanding of the customer through analytics will help to migrate the customer from less profitable relationships to more profitable ones.


For banks and telecom companies looking to differentiate themselves in an increasingly competitive market, with low ROIs, leveraging CVM has become essential to winning and retaining customers. In the coming days, one can expect Banks and Telcos using AI/Machine learning powered CVM solutions to get that one bit closer to their customers, with contextual and personalized solutions that are meaningful and that relates to the what the customer needs.

Amit Sanyal

Amit Sanyal

Amit Sanyal, Chief Operating Officer - Consumer Value Solutions at Mahindra Comviva, a business focused on Customer Value & Life-cycle Management solutions in the telecom space. A marketer at heart and with over 11...