Deregulation Opens LatAm Long Distance Service Markets.

Latin American long distance monopolies are being dismantled and privatized, sponsoring important opportunities for new competitors.

These changes will induce lower prices and force incumbents to face new challenges to their power and market influence.

According to new analysis by Frost & Sullivan (www.frost.com), “Latin American Long Distance Service Markets,” this industry generated $14.5 billion in 2000 and is projected to reach $22.7 billion in 2006.

Despite the potential for this marketplace, incumbents and new entrants will have to overcome volatile economies to realize growth. The biggest short-term restraint to market expansion is the overall poor performance of the regional economies.

“While investment in some industries (including the telecom industry) has been explosive, the economies of Latin America continue to be unstable,” says Frost & Sullivan Industry Analyst Carles Ferreiro. “Mexico is quite vulnerable to the economic performance of the U.S., and Argentina shows few signs of economic recovery. Keeping abreast of these changes will be crucial for market participants.”

According to Frost & Sullivan Program Leader David Humphreys, for new entrants, establishing partnerships with incumbents or developing new technologies could offer key points of entry to the market. To expand coverage and to provide last-mile access to customers, primary operators in some markets are in the process of acquiring small, local operators that provide services at the municipal level.

New wireless last mile solutions will allow new entrants higher levels of penetration. Voice over IP solutions will also enable technology savvy competitors to make new inroads, as interest in the technology is expected to rise over the forecast period.

For more information at http://www.frost.com