Was hosting the 2014 FIFA World Cup worth it for Brazil? Depends on whom you ask. Yes, it was really expensive, there were several failures and some pretty embarrassing losses, but overall, Brazil hosted a successful World Cup for the second time, its first being in 1950. Despite Brazil’s disappointing and disastrous end as contenders in the tournament, in the long run, Brazil’s Cup helped position Latin America at the forefront of the emerging digital world.
For about a decade, the US has been fixated on the emerging markets in Asia, and with China’s mobile market continuing to expand at unprecedented rates, who can blame them? But if we turn our eye south rather than east, we find a wealth of potential for mobile opportunities in Latin America, as depicted by GSMA’s report “The Mobile Economy: Latin America 2014.”
Latin America is poised to become the next mobile market powerhouse. With 320 million unique mobile subscribers, LatAm currently holds a 52 percent mobile penetration rate, which is expected to reach almost 60 percent by 2020, broadly in line with the global average. What’s more, the Internet is mainly accessed via mobile, as the speed of mobile connections recently surpassed broadband connections in the region.
International mobile companies such as Microsoft, Sony and LG are busy releasing products in LatAm that are designed specially for the fast-growing smartphone population (Apple’s in no hurry to dominate here, if its few retail stores and sky-high prices are any indication). Microsoft and Google Android are major drivers of mobile developments in Latin America, as they try to capture the region’s smartphone market, which is notably young in age. The hope here is that by capturing this young demographic, as the market matures into tech use, Microsoft and Android loyalty will stick.
Since a little over half of the population in the region have now subscribed to a mobile service, mobile is just beginning to address the economic and social challenges that exist in the region, according to GSMA.
Big Silicon Valley tech companies are looking south for expansion efforts because Latin Americans are known to be particularly socially engaged online and early adopters of social media, with 94 percent of the population on social media. Before Facebook, Brazil’s most popular social network was Orkut (a now-defunct Facebook competitor); 60% of Orkut’s users were based in the region, almost singlehandedly keeping the platform afloat until Facebook eventually took over in 2011. With the rise of social media use, Twitter has proven to be a powerful tool for citizen journalism, particularly in Mexico. The #ReynosaFollow hashtag has garnered thousands of tweets regarding drug cartel violence in the region, providing so much accurate information that national and international media outlets follow the hashtag for their own reporting. While the situation remains fragile, as shown by the recent murder of a citizen journalist, digital journalism has become a necessary voice of justice in the country, and other hashtags around the country are gaining momentum to keep the Mexican population safe.
In other countries, many local governments, engineers and entrepreneurs are leveraging the region’s intense smartphone adoption in the civic tech space. Brazil, for example, has made exceptional efforts to build apps that help create technology for the country’s booming smartphone user base – with 114 million mobile users, Brazil accounts for over a third of LatAm’s total – by hosting hackathons and creating a culture of openness. Buenos Aires in particular has been leading “gobierno abierto” (“open government” in Spanish) initiatives by offering open source software, open data and design, and hackathons in the city.
The mobile ecosystem has also proven to be a key source of economic growth and job creation in Latin America, having provided jobs for nearly 1 million people this year, a number which is expected to increase to 1.3 million by 2020.
We’ve painted a rosy picture so far – but tomorrow, we bring you some of the caveats regarding Latin America’s pending emergence on the global mobile scene. Stay tuned!