Being in a mature stage and partially affected by the global economic crisis, the total Latin American data communications services market witnessed moderate growth in 2009, with Brazil and Mexico as the most important markets in the region. Both countries are ahead in terms of offerings and penetration in the small and medium businesses (SMB) segment.
Although analysis of the proportional growth by country shows almost no change over time, the market noticed 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.
"Main 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" explains Frost & Sullivan Industry Manager José Roberto Mavignier.
Customized solutions for SMBs, offering of bundled services, and the development of new applications are other relevant growth drivers for the total Latin American market. The increasing use of business solutions (SAP, CRM, Web-based apps, and so on) in the region is likely to drive the demand for customized band-granted connectivity and fast response support.
"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", states Mavignier.
The 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. However, the evolution of the data communications services market in Latin America is likely to be restricted by the saturation of this segment, combined with the macro economic environment of certain countries, such as Venezuela.
Market saturation and intense competition are likely to shift the bargaining power from operators to customers in the most developed markets in Latin America. With companies demanding more security and quality in their data transmissions, we expect to see enhancements in customer service, network robustness, and service level agreement (SLA) improvements to make offerings more competitive.
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Latin American Data Communications Services Markets-2010 / N754