It’s no secret that service providers in Latin and South America are building and expanding their broadband and wireless networks at a feverish pace. There’s so much demand – broadband alone saw a compound annual growth rate of 48 percent between 2003 and 2008, one of the highest in the world, according to researcher Paul Budde – that operators who’ve never tackled newer technologies are struggling to keep pace with the changes. They need fast connectivity now, and fair access pricing now, but are finding they can’t do it themselves. That’s where wholesalers and resellers come in. But even then, challenges remain.
Scalability and Capacity
NTT America, a subsidiary of NTT Communications, has worked with providers in the Latin and South America markets for about two years. It offers wholesale IP, even though it does not have local points-of-presence in those territories, and provides cable capacity access back to the United States.
At first, NTT America’s enterprise and carrier customers were connecting at bandwidths well below T1 speeds, said David Berrios, NTT America’s manager of business development for Latin America. Those connections quickly became inadequate, and NTT America had to help customers “make a huge leap in a very short period of time.”
The jump was from STM-1 to GigE. Consider that most other countries have made similar switches in stages. Yet, in Latin and South America, operators are skipping steps because “scalability is the name of the game for them,” said Berrios. They need services that work with both legacy and next-generation technologies, such as IPv6, for example.
“They’re kind of learning as they go and need a company that can be a partner for them,” said Berrios.
For Global Capacity, a reseller and operations outsourcer, the scalability problem is equally complex. Broadband penetration is lower in Latin and South America compared to other markets, but it’s growing much faster than in North America or Western Europe. So as Global Capacity assembles end-to-end networks for its customers, there are “capacity challenges along the way,” said Nigel Meacham, managing director of information systems for Global Capacity.
“Capacity is reaching saturation more quickly than expected a couple of years ago,” Meacham said.
Ignacio Perrone, Frost & Sullivan’s telecom industry manager for Latin America, explained the problem this way: In the larger markets, at least, the replacement of legacy systems is only in phase one.