March 19, 2001

Digital broadcast satellite (DBS) will increase its current market share in the Latin American region from 18% to 25% over the next six years, according to the new report from The Strategis Group, Latin America Cable and Satellite. Despite this significant increase in market share, however, DBS still trails cable in Latin America by a considerable margin. Overall, The Strategis Group predicts total pay television subscribers in the region will more than double over the same six-year period.

"Since its introduction in 1996, DBS has done extremely well in this region," says Charles Dorrier, analyst, broadband research with The Strategis Group. "The technology is an excellent fit in these countries; operators are not dependent upon wireline build-out and are able to provision new service areas much faster than their cable counterparts. The DBS providers can offer their services anywhere, and as equipment prices have gone down, attracting new subscribers is now much easier."

Despite the expected successes for DBS, the study predicts that cable will remain the dominant force in the region, primarily because cable has the advantage of lower basic service prices and the ability to offer two-way high- speed services using cable modems. The report indicates that cable modem subscribers will increase sixteen-fold by 2006.

"By offering tiered programming the cable operators have lowered the price of basic service, thereby achieving much higher penetration of low-income households in the region," says Peter Jarich, Director of Broadband Research with The Strategis Group. "This new base of potential customers, along with increased demand for high-speed Internet, will fuel rapid growth in the Latin American cable industry."

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