Expanding Demand for Data Storage, Bandwidth Capacity and Speed Sparks Growth within Latin American Data Communications Services

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New analysis from Frost & Sullivan, (http://www.frost.com/sublib/display-report.do?id=NFC2-01-00-00-00&src=PR), finds that the Latin American data communications services market earned 1.3 million connections in 2015 and $6,590.3 million in revenues, at an average revenue per line (ARPL) of $429.5 . The market is forecast to grow at a compound annual growth rate (CAGR) of 4.7 percent to reach 1.7 million connections in 2021, while revenues are projected to grow at a CAGR of 5.1 percent, reaching $8,901.3 million .

For complimentary access to more information on this research, please visit: http://corpcom.frost.com/forms/LA_PR_FValente_NFC2_Jul16

Lower operational costs and service convergence are compelling telecom service providers to shift to next-generation networks based on MPLS/IP and Ethernet in the core. However, the server market is showing a marked preference for Ethernet-based metropolitan and access networks. In fact, Ethernet is becoming the default technology in the metropolitan area networks (MANs), which is making Metro Ethernet services increasingly ubiquitous.

The escalating demand for bandwidth capacity and speed will give a fillip to services such as data storage and recovery, including storage backup, storage area network (SAN) extension and data-center mirroring. However, in the extremely dynamic telecommunications environment in Latin America , even newer services such as Metro Ethernet are at risk of becoming a commodity.

"Carriers need to differentiate themselves through performance, coverage area, pricing programs, ease of use and value-added services to generate higher revenues and margins," said Frost & Sullivan Digital Transformation Industry Analyst . "Industry sectors such as government, healthcare, education and finance are becoming important players and service operators can tap them optimally by designing new Ethernet-based suites of services for their specific needs."

For the time being, Metro Ethernet services will coexist with asynchronous transfer mode (ATM) and frame relay until operational cost savings or bandwidth requirements justify phasing out legacy services. Incumbent telcos in Latin America still have large circuit and private line legacy, and the costs of migration are high. Although operators will encourage enterprises to migrate to IP/ MPLS networks by offering band upgrades and price reductions, the shift will be gradual.

"Strong competition, primarily in Mexico and Venezuela , have been causing price erosions; nevertheless, it is evident that there is a substantial market for bundled voice and customized support," noted Gonçalves. "Operators will continue to look for alternatives to increase revenues and deliver VAS, which translates to more sophisticated solutions as the market matures."

is part of the (http://ww2.frost.com/research/industry/information-communications-technologies/communications-services) Growth Partnership Service program. Frost & Sullivan's related studies include: Insight into the Content Delivery Network (CDN) Market in Latin America , CACAR Telecommunications Services Market, Managed Services Market in South Africa , Total Telecommunications Services Market in Colombia and Mexico , and Bahrain Telecom Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

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Contact:
Francesca Valente
Corporate Communications – Latin America
P: +54 11 4777 5300
F: +54 11 4777 5300
E: francesca.valente@frost.com

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