Home Latin America 2015 Beyond the domestic market

Beyond the domestic market

by Administrator
Mariano SanchezIssue:Latin America 2015
Article no.:12
Topic:Beyond the domestic market
Author:Mariano Sanchez
Title:VP of Sales
PDF size:234KB

About author

Mr. Mariano Sanchez – Vice President of Sales.

With almost twenty years of business development, strategy and corporate management experience in telecommunications, Mr. Sanchez is responsible for leading GlobeNet’s Sales and Marketing organization. Along with revenue generation and commercial strategy, Mr. Sanchez’s role also includes the company’s development and expansion into new markets.

Prior to joining GlobeNet, Mr. Sanchez held management positions for leading telecommunication companies such AT&T, Global Crossing /Level 3, RIM (Blackberry) and Vodafone with specific focus on business development and commercial operations in the Americas.

Mr. Sanchez holds a degree in Industrial Engineering from the University of Buenos Aires, Argentina and a Master’s in Business Administration from the University of Miami.

Article abstract

Carriers and ISPs are continuously searching for ways to differentiate themselves from their competitors and ensure customers continue to value their services. This task is becoming increasingly difficult as the Latin American telecommunications market continues to see consolidation, increased price erosion, emergence of new technologies, and more educated buyers flooding the marketplace. Up until recently Network Functions Virtualization – NFV, or the 3rd platform, was a buzzword with significant future impact on the ICT community, specifically in developing markets like Latin America. Today it is an innovative solution that has the potential to extend networks beyond their domestic markets quickly and seamlessly, opening doors to new regions that were previously unable to be reached without significant investment.

Full Article

Today’s global telecommunications marketplace is as competitive as ever. Stiff competition is driving down pricing models, new technologies constantly emerging to replace and enhance existing solutions, and highly educated buyers changing the way carriers and Internet service providers (ISPs) are valued by their customers. The key question is where do carriers and ISPs turn next to remain competitive in this quickly evolving industry?

They must begin to extend their networks beyond their domestic markets and provide customers with agile, flexible and cost-effective international connectivity that allows them to seize new market opportunities by quickly deploying new networking services or scaling existing services to meet changes in demand. Network virtualization, also commonly referred to as the 3rd platform, not only enables the desired agility, flexibility and cost-benefit customers are looking for to meet demand, but also enhances network reach while maintaining the capability of managing their own network. Network functions virtualization (NFV) is poised to open the door to Latin America for a long list of international ICT providers.

Latin America: A region on the rise

Consumer spending in Latin America is on the rise as the economy continues to strengthen and the middle class continues to grow. This growth has positioned the region to become a market of particular interest to global carriers, ISPs, OTTs, mobile operators and pay-TV companies who want to tap into the burgeoning market with growing demand for technology services. IDC has reported that in 2015 IT growth in Latin America will outpace the global average by 3.7%.

While this growth may not have been possible in the past, stronger regulations within the region’s telecommunications environment due to privatization and liberalization are enabling the proliferation of innovative digital products. Furthermore, many Latin American governments have been working towards a digitalization of economies and have invested heavily in broadband and fibre connectivity.

The growing middle class, now accounting for a third of the population with the potential to reach 40% by 2030 , presents Latin America with a larger population of consumers with disposable income and who are hungry for connected devices. It is this “always on, always connected” culture fuelled by smart devices that results in the ever-growing data demand. Mobility, cloud, big data and analytics, and social media are often referred to as the four pillars of NFV. The data demand in Latin America can, in part, be linked back to these pillars, which has led 57% of CIOs in the region to list them as a top priority for IT investment in the coming years.

The Latin America’s market presents an ideal environment for NFV for a variety of reasons, one of which is that is eliminates a key concern surrounding the new technology’s deployment. An issue of great concern to many surrounding the adoption of NFV is the fate of existing infrastructure in which carriers have already invested heavily. The Latin market is particularly well positioned to adopt NFV, as it is a growing market and therefore, the challenges around “legacy” infrastructure are far less concerning than in more mature markets like the U.S.

The case for virtualization

The shift to network functions virtualization (NFV) is reshaping the telecommunications landscape by shifting importance away from the traditional switch and router hardware and on to the server. By changing the fabric of the legacy proprietary infrastructure, NFV is transforming the culture of the industry as a whole.

Carriers are moving rapidly towards NFV with over 35% of telecom operators reporting that they were planning to deploy NFV in 2015. The transformation towards virtualized network platforms is still in its early stages of what is predicted to be a 15-year maturation period, however the industry can expect a rapid jump in the global NFV market from US$2.3 billion to US$11.6 billion in the next four years according to data from IHS’ July 2015 report. It is imperative for Latin American nations and the ICT providers within them to invest in NFV to ensure the continued growth and push the region into the future.

NFV opportunity: Capitalizing on connected devices

The growth of the middle class and its disposable income, as well as the declining cost smartphones and tablets, has led to an influx of connected devices in Latin America. This influx has caused bandwidth congestion that has traditionally forced telecom providers to invest in costly infrastructure deployments to meet demand. The introduction of NFV offers an alternative to these CAPEX and OPEX intensive deployments by providing an agile, scalable solution that can be deployed to new markets very quickly.

These connected devices make up the much buzzed about Internet of Things (IoT). The IoT is gaining momentum and maturing everyday and as it does, end-users’ experience expectations are growing in stride. These users are often not thinking, or even aware, that the data streamed through their devices depends on an intricate web of infrastructure – the only concern is the quality of the data stream and the cost to obtain it. By leveraging NFV over existing subsea and terrestrial networks, carriers and ISPs can provide new users outside of their domestic market with the connectivity they rely on, all at a lower cost than a traditional deployment to the provider.

NFV opportunity: XXXI Olympic Games
Sao Paulo, Rio de Janeiro, Bogota and Caracas are noted as a handful of the most significant Points of Presence (PoP) in the world and through NFV, the Latin American ICT community can open the doors to the region to a plethora of international players. NFV enables carriers and ISPs to not only grow into new ecosystems and support new partnerships, but also capitalize on the steady growth of the region’s economies quickly and without the need to invest heavily in equipment. NFV also allows these organizations to scale quickly and seamlessly to meet demand, which can fluctuate quarter to quarter or in great leaps when milestone events take place.

These Latin American PoPs will become even more important to international carriers as all eyes turn to the continent in 2016 for the XXXI Olympics in Rio de Janeiro. Demand for connectivity into the region will be at an all time high as 10,500 athletes from 205 countries descend upon 157 venues in Brazil. By turning to virtualization, organizations can deploy network services in the region during the Olympic Games without needing to find the money, power or space associated with new hardware deployments.

The bottom line

For international service providers, adopting NVF offers an opportunity for differentiation in a market that is seeing greater competition. Services enabled by NFV provide growth avenues for international service providers, as well as their customers. They provide the ability for Latin American based ISPs and carriers to “acquire” an international network and extend their presence to Internet exchanges in U.S., for example.

NFV enables ISPs and carriers to aggregate services from various providers at the source, thus improving reliability and reducing costs. Simultaneously, they are enhancing their presence in new local markets, which enables them to provide better overall service offerings with more attractive margins.

For U.S. based companies, leveraging such services allows for quick entry into markets like Brazil, which are typically challenging to break into. In both scenarios NFV enables customers to do so without an extensive capital investment, yet benefit from reduced operational cost and ultimately a reduced business risk. Further, the companies opting for NFV services generally do not want to operate a foreign entity, own assets that will subject them to additional taxes, or set aside resources to learn and enforce local regulations. NFV enables companies to avoid these headaches and the red tape to quickly deploy into new markets.

Up until recently NFV was a buzzword with significant future impact on the ICT community, specifically in developing markets like Latin America. This innovative solution has the potential to push reliable connectivity to and within Latin America to the next level, further supporting the growing economies, forging new partnerships and connecting the region to the global community.

Related Articles

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More