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Telefonica accelerates GSM migration in Latin America

75% of Latin American base migrated to GSM by second-quarter 2008

Telefonica's move to GSM in Latin America has been motivated by three key factors: economies of scale; a range of choice and price points in the handset portfolio; and next- generation network evolution. Transitioning the Latin American networks has not only brought these markets in line with the group’s European businesses, but also allowed it to establish a common device and service portfolio across the Americas, leveraging the larger ecosystem of GSM equipment vendors. The move not only opens up the opportunity for increased roaming revenues across the group’s Latin American markets but also worldwide on the GSM platform. The challenges associated with network migration - building-out rapid coverage, balancing capex and managing customer expectations (thus avoiding churn) - have all been managed well, and the operator has been successful in enticing customers with the benefits of the network upgrade in each respective market. The investment also means that Telefonica is well positioned for possible future transition to WCDMA, HSPA and, eventually, LTE network platforms.

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