Wireless Service Provider in Argentine Alliance
"We will sell everything down there we sell in the U.S. but will structure all our services to meet the needs of the Argentine and other Latin American markets," said John Webster, i3 Mobile's managing director for Latin America based here.
"We've been looking at other areas of the world, but Latin America was the most interesting opportunity for us because the growth rate of cellular phones is twice that of PCs," he said.
The region now has 40 million cell phones and only 19 million computers, he said, citing a Merrill Lynch study.
"Last year would have been too early," Webster said. "Right now is the time to thrust into Latin America because of the growing number of phones that can handle our services. Phone companies used to be strictly voice carriers and nothing else, but now messaging is a big part of their business.
"Our initial push is to make subscribers and phone companies comfortable with SMS."
The Argentine phone market is almost completely deregulated and now has six telecoms competing for customers. SMS, he said, was the ideal way to get into the market quickly before expanding to new ground.
"You can get and generate messages and use your cell phone as a quasi Web browser," Webster said. "You can look at messages on demand -- sports, weather, news, finance, you name it.
"What we get out of this association with Indigo is a share of profits generated by airtime and by advertising. Any cellular phone will have enough room to put on an ad.
"Argentina is famous for its soccer, for example, so that when someone checks the latest score, we can run an ad urging the fan to think of Adidas as the provider of his soccer shoes," he said. "Message and ad are hooked together."
Webster said, however, that ads are always permission based.
"We don't want them to think they are being spammed, so when someone signs up for our service on the Web site we will ask about attaching an ad and provide space for refusal," he said. "We run an opt-in operation."
He noted that Argentina does not have laws requiring opt in, but he said, "we want to be courteous to the end-user. I don't like getting ads jammed down my throat."
The U.S. company does not have to advertise or market its services, he said, because the "actual carriers advertise it quite effectively. They want to drive more airtime and tell their subscribers about it.
"I would like to think that we can get 5 [percent] to 7 percent of the current users over the next eight or nine months, maybe 500,000 to 750,000 people in that time. We expect to have clients online by the fourth quarter."
Webster hopes to start offering e-commerce service early next year.
"Latin America is not a good place for credit cards, and it will take us time to establish secure payment methods," he said. "Products we plan to offer will come from around the corner or as far away as you can imagine."
I3 Mobile picked Indigo -- a company very much like itself -- because, Webster said, "it is well-connected politically," not only with the six local phone companies, but also with others across Mercusor, the trade alliance among Argentina, Brazil and Uruguay, and to some extent Chile and Paraguay.
"Our plan is to use Argentina as a base and then move on out to Paraguay, Chile and Uruguay, but to set up a local operation in Brazil," he said. "It is not advisable to use an Argentine company to do business in Brazil."