Carriers and service providers in Latin America have been extensively migrating to next-generation network infrastructure, at a pace that is surpassing the overall economic growth of the region. With the transition from circuit-switched to packet-based technology in their networks, telecommunication service providers are starting to offer hosted IP-based services to their business customers, in order to captivate recurrent revenues and increase penetration within current clients.
New analysis from Frost & Sullivan (telecomservices.frost.com), Hosted IP and Next-generation enterprise voice services trends in Latin America, reveals that this market earned revenues of $37.0 million in 2006 and estimates this to reach $775.8 million in 2012.
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Technical innovation in the telecommunications market is, to a large extent, based on new IP communications technologies and standards, such as IMS and triple play, rather than legacy technologies. Some of the benefits of next-generation enterprise voice services include delivery of bundled services that enhance the features of rich-voice applications, faster and smoother upgrades, flexibility and scalability of the services, efficiency gains and cost reductions for voice communications and cost savings from reduced in-house systems and network management staff.
“The Latin America hosted IP and next-generation enterprise voice services market is driven by three main factors: the increasing IP infrastructure adoption by service providers and enterprises, the demand for capital expenditure (CAPEX) reduction and lower-cost voice services, and the increases in broadband penetration and available bandwidth,” notes Kristin Crispin, Industry Manager at Frost & Sullivan. “In the medium term, enterprise telephony vendors, as well as service providers should push for this model, with the need to increase the average revenue per user (ARPU), and to offer new services in their portfolio.
At the same time, two of the biggest challenges in this market are the need to educate business customers about the new services that were not available over the traditional networks and delivering hosted IP services under the current regulatory framework, where issues such as last mile access and number portability are yet to be discussed.
“Other short term challenges include the preference from Latin American companies for premise-based systems and limited broadband development in the small and medium-sized enterprises (SME) segment,” says Crispin. “This apart, the integration of hosted IP voice services with legacy systems is also likely to pose challenges.”
Traditionally, only large enterprises have had the financial resources to afford high-end IP-based customer premises equipment (CPE), which has appreciably improved customer service and operational efficiency, while concurrently reducing costs. Therefore, telecommunication service providers need to proactively develop new service portfolios that enable their business customers to differentiate themselves from their competitors, and to gain a competitive advantage. On the other hand, as the Latin American enterprise fixed-voice services market is declining, incumbent carriers and competitive local exchange carriers (CLECs) need to develop alternative revenue streams.
Hosted IP and Next-generation enterprise voice services trends in Latin America is part of the Communication Services Growth Partnership Service, which also includes research in the following markets: Enterprise and Consumer Telecom Services Markets, Broadband Access services, Data Communication Services, North America Hosted Telephony Services Market, EMEA Hosted IP Telephony Markets, APAC Next-Gen Enterprise Voice Services Markets, North America and EMEA Hosted Contact Center Markets. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
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