VoIP growth in LatAm.

 The power of VoIP is rolling into Latin America, driven by lower costs and the growth of broadband services. It’s also affecting service provider profits, says the new “VoIP in Latin America” report by Frost & Sullivan.

In Brazil, the growth of VoIP and IP telephony is in part expected to cause a 2.8 percent early dip in local revenues and a 7.9 percent dip in long-distance revenues over the next six years. End users say they’re reaching for VoIP for cost reductions. 

Frost and Sullivan expects the LatAm VoIP market to grow from earned revenues of around $72 million in 2007 to nearly $626 million in 2012. F&S says VoIP and wireless VoIP service providers need to ensure both operational efficiency and quality of service to thrive, along with effective distribution and promotion strategies.

Factors that will hinder VoIP growth include lack of number portability regulation, poor end-user awareness (i.e. marketing), low call quality levels and an “almost non-existent” VoIP pre-sales effort. VoIP carriers need to improve pre-sales support and customer service, along with creating new service bundles and improving VoIP quality.

Global Crossing has made two announcements in the past 30 days touting their upgrades in Latin America. (If that isn’t enough of a clue the IP business is hot in the Southern hemisphere, there’s also translations of GC’s website in Portuguese and Spanish). In its latest announcement, the self-styled “IP solutions provider” said it has put “Supercore” routing platforms into Buenos Aries, San Tiago, and San Paulo. The company had previously installed Supercore routers in St. Croix, USVI and Fort Amador, Panama. 

The announced upgrades effectively triple the company’s previous core capacity in the region and enables OC-192/10 Gbps SONET connections on its 12,000 route miles South American Crossing (SAC) undersea fiber-optic cable system; last month, Global Crossing announced it expanded SAC by 100 Gbps of transport capacity. The company cites the need to handle rising demand for 10 Gbps Ethernet services and the need to future-proof for services faster than 10 GBps without the delays caused by forklift upgrades.

IDC is projecting the Latin American market for enterprise IP services to grow from $2.94 billion in 2008 to $4.3 billion in 2011, at an annualized rate of 10.1 percent.

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