|Issue:||Latin America I 1998|
|Topic:||Interview with Mr. Jose Pontoriero, Cisco|
|Title:||Regional Manager, South America & Caribbean region|
|Organisation:||Stratacom; Cisco Systems|
To continue Connect-World’s series of interviews with prominent personalities in the telecommunications world, Connect-World’s Editorial Director, Freddie Quek, interviews Mr. Jose Pontoriero, Cisco’s Regional Manager for the South America and Caribbean region, on his views of the developments in telecommunications in the region.
ABOUT YOUR BACKGROUND Connect-World Latin America (CWLA): What are some of the most high profile telecommunications development projects in your career? The highest profile telecommunications project that I have been personally involved in so far was the creation of Compania de Telcomunicaciones del Interior (CTI) in Argentina. At the time, 1993, I was the General Manager for AT&T Network Systems (Lucent Technologies) Argentina. In this capacity I was involved in many aspects of the development of CTI and the deployment of the initial network. I was a member of the founding board of CTI. This opportunity allowed me to be involved in the creation of a multimillion dollar company. I expected challenges associated with development of strategies and organisational designs, but the most fascinating aspect to me was observing the merging of the different cultures, USA (GTE and AT&T) and Argentina (Benito,Roggio and Clarin), that created the personality of CTI. In order to win the cellular licenses for both the north and south regions of the interior of Argentina, CTI had to commit to installing more than 800 cell sites in expedited fashion (within 90 days I believe). AT&T Network Systems was responsible for more than 400 of those sites. I was, therefore, exposed to the execution of a massive undertaking, which encompassed the installation and commissioning of cellular equipment in conditions ranging from the tropical climates of the north to the freezing temperatures of the south of Argentina. However, the most rewarding aspect of the CTI undertaking was the realisation of the impact that this network would have on the quality of life for the people of Argentina. CWLA: What has been your most satisfying professional achievement? My most satisfying professional achievement was the development of AT&T Network Systems Argentina. In 1993, AT&T Network Systems, under the guidance of John C Guerra, Jr, Vice President of South America and the Caribbean, decided to expand its presence in the region. The first strategy was to open Sales & Operation offices. Mr Guerra, through a recommendation from his Operations Director, Roger Dalrymple, offered me the opportunity to move to Buenos Aires and develop the AT&T Network Systems Argentina organisation. During my tenure, we were able to increase our sales from US$200,000 in 1993, with one account manager, one consultant, one secretary and myself, to sales of more than US$100 million for two consecutive years. The organisation also grew to an operation that exceeded 100 people. I was then offered a regional account director job at the NS Latin American Headquarters in Miami. This opportunity, coupled with my previous experience, created the chance for me to move to Stratacom and later become part of Cisco Systems. CWLA: What does your present role entail.? In my current role, I focus on the service provider (telephone companies, ISPs, wireless service providers, cable service providers) market segment in South America and the Caribbean. In order to maintain a market focus Cisco is divided into three market-driven segments or lines of business (LOB). The three Lobs are small and medium businesses, enterprises and service providers. The service provider segment represents an ever growing and important portion of Cisco’s business. In my role, I work with the account teams in each country responsible for developing the service provider markets. My main responsibility is to ensure that we have uniform strategies and business practices when pursuing opportunities or strategic relationships. This becomes extremely challenging in the service provider arena because of the regional/global presence and interlacing relationships many of our customers maintain. ABOUT CISCO’S VIEWS ON THE LATIN AMERICAN REGION CWLA: What is your general opinion regarding Latin America’s telecommunications market in the next three to five years? The South American telecommunications market will continue to flourish to the benefit of its populace. As we have seen in Chile, the total deregulation of a market creates open competition which benefits the consumer. The benefits are not only economic, but are seen in the quantity and quality of services users receive. We can look at the Argentina and Venezuelan telecommunication privatisation models and the advantages that they have provided to their communities. These two markets will be fully deregulated within the next 3 years, providing additional advantages. This deregulation will bring a cadre of new competition, services, price points and quality guarantees. We can also anticipate the deregulation of Telebras in Brazil. This impact of this endeavour, because of its sheer size, will have a profound social and economical impact on the region. So the future of the telecommunications market in South America is bright for the service providers, the vendors, and more importantly, the consumers. CWLA: What can you tell us about the progress in this region regarding telecommunications? Communications are a fundamental requirement for a country growing in today’s global environment. South America was crippled as its basic infrastructure had not seen any significant investment for almost two decades. The privatisations that took place in the 1990s have been the catalysts that started the growth of telecommunications in the region. The ability to leapfrog technologies and implement state-of-the-art solutions has been advantageous to the new owner/operators. We can easily measure the results -the voice network is 80-90% digitised in Chile, 70-80% in Argentina and 60-70% in Venezuela. I anticipate seeing the same type of improvements in Brazilian infrastructure as the privatisations take hold. The challenge now for these administrations is to anticipate the future. The creation of new applications and the demand for multiple services on a single platform provides new opportunities for service providers. We are also seeing that the large and medium enterprise customers are contracting out more services as opposed to managing their own communication and networking infrastructures. So the ability of the service provider to implement multi-service scalable networks will directly impact their future competitiveness. CWLA: What will be some of the future trends in telecommunications, and how is Cisco preparing for them? The future trends in the global telecommunications arena clearly point toward multi-service solutions. In today’s environment, where demand for both voice and data is growing exponentially, the service providers and enterprise customers are faced with a financial challenge. Infrastructure budgets are growing at an average of 10% annually, which is well below market requirements. So service providers and IT professionals are seeing the need to integrate their voice and data traffic onto a single network in order to provide quality applications while managing their scarce resources. South America is faced with the same challenge. Service providers are already asking how they should grow their networks. A recent telecommunications manager told me that approximately 30% of his voice network was still analogue and he had to create a migration plan to digital voice switches. However, he was now rethinking his strategy and considering migrating to a multi-service platform that would allow his company to offer voice, value-added data and eventually video services. This is the trend that I am seeing throughout the region: the positioning of today’s technology platforms for serviceability into the next decade. Cisco is preparing for this convergence of technologies by focusing on the integration of voice, video and data. We are accomplishing this task by focusing on Wide Area Networks (WAN) and access solutions. Cisco has developed CPE products that allow the branch office or small businesses to integrate voice, video and data traffic onto a single device. This device, the MC3810, allows a customer to integrate all individual lines onto a single circuit connected to the service provider. This eliminates the need for multiple lines for telephone, fax and dedicated or dial-access service. On the WAN front, Cisco is enabling all its products to have voice, video and data capabilities. By doing so we allow service providers to maximize the utilisation of infrastructures, and therefore control operation and infrastructure costs. One can almost envision the voice traffic ‘riding for free’ on a well-designed multi-service infrastructure. Therefore, Cisco is focusing all current and future development and acquisitions on the integration of multiple types of traffic. CWLA: What are the main markets Cisco will target in this region? The obvious answer is Brazil. The Brazilian market represents the largest untapped potential in the region. Cisco has recognised the potential and has staffed two main Cisco Brazil offices accordingly. We have also established robust relationships with key partners throughout the country to deliver both end-to-end solutions and professional support services. Cisco has strategic relationships with both enterprises and service providers in Brazil. These relationships will result in some of the largest voice and data networks in the region. We expect these existing relationships to flourish and new ones to be developed as the Brazilian market moves towards open competition. Cisco is equally focussed on all the other South American countries. We have opened Cisco offices in each of the main cities throughout South America. These offices are staffed and managed by host country nationals with the country managers reporting directly to our Vice President in San Jose. Another interesting point to note is that Cisco will have laboratory facilities capable of demonstrating the advantages of voice and data integration in each of the major South American countries by the end of the first quarter of 1998. CWLA: In your opinion what is the single biggest challenge faced by the countries of Latin America? It is difficult to answer this question because the challenges faced by South American countries are varied and numerous. We could focus on the social or economic issues, but in the context of this interview I will address the challenge most commonly discussed by service providers. That challenge lies in the types of services that must be offered to retain and capture a client base. In an era of increasing competition, the ability to retain and grow market share becomes fundamental. The service providers who introduce new services, rapidly offer value-added services and guarantee quality will become market leaders. The challenge is to manage the time-to-market issues while controlling cost structures. Although we are not sure which applications or services a market will demand, we are sure that the network must be flexible. So the challenge for the service provider today is to plan and implement network infrastructures in a manner that provides the ability to react to ever-changing markets. CWLA: How do you think the industry will overcome this challenge? The key to achieving this tough goal is managing your vendor base. The trend in the market is to continually consolidate the supply chain. This allows service providers to better utilise their resources by minimising the support pools required to operate and maintain multi-vendor networks. This liberates those additional resources to focus on applications and services that expedite time to market and generate demand. Another facility that service providers are demanding is the ability of the vendors to provide integrated solutions. An integrated solution running over a common architecture offers a multitude of competitive advantages. This allows service providers to offer a consistent set of services. The same services that allow the provider to implement multimedia applications, network-wide security policies and QoS structures. These networks must also provide high availability and be scalable in order to rapidly deploy new services and applications as the business demands. CWLA: Are there any experiences from other parts of the world that can be drawn and applied to Latin America? Although our challenges seem unique, they are similar if not the same as those encountered by other administrations throughout the world. The experience gained from deploying large infrastructures and launching services in partnership with service provider administrations throughout the world has provided Cisco with unique experiences. Cisco recognises the advantage of these experiences, especially in the time-to-market issues, and has developed mechanisms to share them with future customers. Conclusion Cisco recognised the importance of experience in launching advanced data services such as frame relay, ATM and IP services. In working with different administrations around the world, we have gained valuable insight into the challenges facing service providers. In addition to provisioning, implementation and technology assistance, Cisco also provides sales and marketing support to service providers in the form of customised marketing programs. The marketing program is intended to act as a catalyst for the product launch and marketing process. It can add value to several segments of the product rollout process, depending on a customer’s in-house expertise. It is important to recognise. that no two service provider environments are alike. They have different resources, different skill sets and different areas of expertise. The service Cisco offers is, therefore, highly customisable programs aimed at adding value in as many areas as possible during the product/service development and launch cycle. The goal is to leverage Cisco’s experience and bring the customer’s services to market as fast and as efficiently as possible.