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Frost & Sullivan: The Evolution of Latin American Data Communications Services Market Likely to be Restricted

June 15, 2010

Research firm Frost & Sullivan has released a new study that revealed that the Latin American data communications services market has posted moderate growth in 2009 since it was partially affected by the global economic meltdown and it is at a mature stage.

The firm's new report "Latin American Data Communications Services Markets - 2010" offers an analysis of the data communication services markets in Latin America, covering six main countries: Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. It also offers an insight into the market size, drivers and restraints, a market forecast and also about the current structure of the industry.
Though the study hints at no drastic changes there were some technological changes in the region, which are likely to continue occurring due to migration of technologies, mainly from legacy to IP/MPLS. Also, as IP VPN links are expanding extensively, Circuits and Private Lines are decreasing their participation in the total market.
Frost & Sullivan Industry Manager Jose Roberto Mavignier has explained that the important drivers for the total market include the GDP growth of each country, the expansion of the SMB segment, the integrated offers of telecom services and IT (such as data centers and voice and managed services), and the development of specific verticals, such as government and finances. The total market is expected to grow from $4,023.7 million in 2009 to $6,188.9 million in 2015 at a compound annual growth rate (CAGR) of 7.4 percent.
The total Latin American market is also influenced by customized solutions for SMBs, offering of bundled services, and the development of new applications. Also companies in the region are also beginning to use more SAP, CRM, Web-based and many customized apps.
Though large business segment is more mature in terms of data communications services adoption, and in 2009, it accounted for nearly 68.3 percent of the total market revenues, the data communications services market is still going to see a restricted growth in the Latin American region due to factors like saturation combined with the macroeconomic environment of certain countries such as Venezuela.
In related news, Frost says number portability taking hold in Latin America and Latin American ICT companies deployed sustainable development initiatives.

Nathesh is a contributing editor for unified communications. To read more of Nathesh's articles, please visit his columnist page.

Edited by Alice Straight

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