Crosstown traffic: cellular phone providers, although fewer in number, will reach even more customers.

Wireless penetration in Latin America has improved, but experts expect it to increase by 20 percentage points by 2010, to 63%. The change from then to now is that the playing field is shrinking, with some companies gaining considerable size while others have simply left the game, leaving even more room for the big boys to grow.

In 2002, Latin America had 102 million cellular phone users, and the market was divided mostly between America Movil, BellSouth, Telefonica, TIM and Verizon. Today, America Movil and Telefonica control 67% of the market and expect to have between them 286 million customers, a rate of penetration that would be greater than the worldwide level of cellular use, according to projections by Pyramid Research, a U.S. tech consultant.

At the global level, penetration of mobile services four years ago surpassed fixed-line customers to reach 1.13 cellular phones for every fixed-line phone. Since then, the gap has widened. By 2010, there should be 2.5 wireless phone customers for each fixed line. In Latin America, the figure will be 3.6 cellular customers for each fixed user.

"There are segments of the population that could still become wireless customers; in fact, there are some wireless users who have been disconnecting their fixed lines," says Sergio Cruz, manager for Latin America at Pyramid. In rural areas, for instance, cellular phones are useful for coordinating activities and improving the local economy, since they become tools for work. "People who work in fields like plumbing can keep their balance at a minimum and use it just to be found, avoiding the tedious task of giving out a fixed-line number for taking messages," says Cruz.

America Movil, owned by Mexican billionaire Carlos Slim, controls roughly 40% of the region and has expanded dramatically in recent years. In April the company bought 100% of Verizon Dominicana, 52% of Telecomunicaciones de Puerto Rico and, through a co-investment with Telefonos de Mexico, Slim's fixed-line giant, bought 28.5% of Venezuelan phone company Compania Anonima Nacional Telefonos de Venezuela, pending regulatory approval.

All across the Americas--the company is present in the United States as well--America Movil has now 100.6 million mobile customers, 37.5 million of whom are in Mexico. With the purchases mentioned above, that figure would rise to 108 million.

And, although the spectacular growth among lower-income customers is unlikely to be repeated, there are still a lot of new customers to reach, as well as value-added services. "The countries where penetration is still low are almost the exception," says Carlos Garcia, administration and finance director of America Movil. "I think we'll begin to see nearly all of the countries moving forward at the same rate."

In effect, in Mexico, where America Movil dominates the total market of 47 million customers as of December 2005--at 77% of the market--its competitors have begun to concentrate on higher-value services. In June, Iusacell, which controls 4% of the market, was the first to offer a cellular phone that streams live television, although just two channels, and video on demand. "People are surprised because they believe that this kind of service is not available in Mexico," says Gustavo Guevara, director of 3G product development for Iusacell. Tireless. Although Telefonica has competed against America Movil across the region, home now to half of the revenues of the Spanish giant, Mexico has been a trial thanks to the overwhelming presence of Slim. To win ground, Telefonica has tirelessly launched promotions. "We decided to use the Spanish company because it has attractive plans for business, which America Movil did not offer," says Israel Flores, head of technology for consulting firm Webb Mexico.