SOURCE: BillingWorld

Data from TeleGeography’s GlobalComms Insight Research Service project that telecom service revenue in Latin America and the Caribbean will grow from $122 billion in 2009 to $143 billion in 2014, led by the wireless sector. That signals a good growth opportunity for carriers in the region, as well as those looking to buy stakes in existing operators.

Telecom revenue in Brazil, Latin America’s largest market, will top $55 billion in 2014, followed by Mexico, with $25 billion, and Venezuela, at $13 billion. Brazil is growing revenue at 39 percent and Mexico at 17 percent. Venezuela is a distant third, at 9 percent.

Total mobile revenues are projected to grow just over 4 percent annually, while revenues from fixed-line (broadband and voice) services will grow just over 2 percent annually. Revenues will be driven by wireless and broadband subscriber annual growth rates that average 6 percent and 15 percent respectively. While this is far below the stunning growth rates achieved over the previous five years, it’s well above projected growth rates in Europe and North America.

The continued growth of telecom in Latin America is one factor driving recent M&A activity in the region, despite the existing high level of concentration. After America Movil’s planned acquisition of Carso Global (Telmex and Telint) and Telefonica’s acquisition of Portugal Telecom’s stake in Brazilian mobile operator Vivo, the two companies will generate 32 percent and 27 percent of total Latin American telecom revenues, respectively.

Latin America’s mobile market specifically will continue to perform strongly, according to research firm Euromonitor, with mobile subscriptions taking over fixed lines as the preferred method of communication. In 2009, mobile subscriptions penetration totaled 88.2 percent of the population. That’s compared to 55.2 percent in Asia Pacific, 90.4 percent in North America and 50.6 percent in the Middle East and Africa. Wireless in CALA has benefited from geographical hurdles to fixed line expansion and cheap deals for mobile voice and mobile Internet. In 2009, fixed line penetration comprised only 18.6 percent of the total population.

Euromonitor said the market has strong growth potential, reflecting reviving economic growth and improving income levels, as well as deals targeted to attract low-income consumers. Expanding the mobile market will benefit consumers and the business environment by offering on-the-move telephone and Internet access, while potentially boosting telecommunications profits.

Nokia Oyj, AT&T Inc. and Verizon Communications Inc. are urging the U.S. government to ease rules that keep them from operating in Cuba even after President Barack Obama loosened telecommunications regulations last year to promote democracy on the communist island.

Nokia, the world’s biggest mobile-phone maker, is urging the U.S. to ease its 47-year-old trade embargo so it can sell handsets to Cuba. AT&T and Verizon, the largest U.S. wireless providers, urged regulators to make it easier for U.S. companies to directly connect calls to and from Cuba.

The companies’ pleas come after Obama said in April 2009 that greater contact with the outside world would reduce Cubans’ dependency on President Raul Castro’s regime. Still, other regulations prevent companies with U.S. operations from entering the market, according to a July report by the Washington-based Cuba Study Group, which advocates for an open economy.

“We don’t understand why the regulations stopped where they did,” Jose Martinez, head of government relations for Latin America at Nokia, said in an Aug. 20 interview from Miami. “There doesn’t seem to be a desire at the bureaucratic level to change the rules to allow cell phones.”

Cuba has the lowest mobile-phone penetration in Latin America. As recently as 2008, about 20,000 to 30,000 people, mostly foreign diplomats and senior officials, owned mobile devices. That number has grown to 800,000 since Castro lifted a ban on most people owning them, the Cuba Study Group says.

Roaming Service

AT&T and Verizon may be interested in setting up roaming service for U.S. customers who visit the island as a first step into Cuba, said Jose Magana, a senior analyst at Pyramid Research in Cambridge, Massachusetts.

The country of 11.4 million people could become the largest telecom market in the Caribbean, topping Puerto Rico’s $1.6 billion market, Magana said. If the market remains mostly closed, annual revenue could still reach $400 million by 2013 from the current $80 million, he said.

Magana said roaming service in Cuba wouldn’t have a measurable effect on earnings for AT&T or Verizon.

Nokia fell 1.6 percent to 6.72 euros in Helsinki at 11:03 a.m. New York time. AT&T rose 1 percent to $26.90 in New York Stock Exchange composite trading while Verizon increased 1.4 percent to $29.85.

Obama, in an April 13, 2009, memorandum lifting travel restrictions to Cuba for Cuban-Americans, directed the U.S. government to allow companies to provide communications services to the island, saying it would “decrease dependency of the Cuban people on the Castro regime.”

Little Changed

In practice, little has changed, as companies wishing to operate in Cuba risk violating sanctions still in place, said Christopher Sabatini, policy director of the New York-based Council of the Americas business group. These include the 1992 Cuban Democracy Act that prohibits investment in Cuba’s telecommunications network.

“It’s so self-defeating,” said Sabatini, who helped prepare the Cuba Study Group report. “It’s like we just sent them a toy cell phone and said, ‘This will be great. Use this.’”

Cuba’s Foreign Ministry didn’t respond to a request for comment.

AT&T and New York-based Verizon wrote to the Federal Communications Commission this year urging it to grant an April request by TeleCuba, a Miami-based company that sells calling cards, for the FCC to waive rules that fix a maximum rate a U.S. provider can pay the Cuban government for connecting calls.

Market Foothold

The wireless providers’ letters may be aimed at supporting their interest in setting up roaming service in Cuba without taking sides in a politically delicate issue, said Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore who covers Verizon and Dallas-based AT&T.

Establishing a foothold in Cuba could be lucrative because mobile phone penetration may increase to 80 percent of the population in four years, from 10 percent to 25 percent now, should providers be allowed to invest in the market, King said.

AT&T has no specific commercial plan associated with the letter, spokesman Michael Balmoris said. Verizon spokesman Jeffrey Nelson, and John Taylor, a spokesman for Overland Park, Kansas-based Sprint Nextel Corp., declined to comment on whether their companies were seeking a roaming agreement for Cuba.

The branch of the U.S. Treasury Department that enforces trade sanctions allows U.S. providers to pay Cuba for services including roaming, said a Treasury official who declined to be identified, citing agency policy.

FCC Rate Cap

Still, under current FCC rules, U.S. providers can only offer direct calls to Cuba and roaming service if they pay the Castro government a fee no higher than 19 cents per call, said an FCC official. That prevents U.S. operators from offering these services because Cuba demands 84 cents a call, according to the official, who declined to be identified because of the sensitivity of the issue.

The FCC is considering whether to waive the rate cap, the FCC official said.

U.S. rules also keep Nokia from selling handsets in Cuba, even though it is based in Espoo, Finland, because the unit that exports to Latin America is based in Miami, Martinez said.

“There is an enormous amount of frustration that the rules weren’t clear enough,” said Judith O’Neill, a telecom lawyer at Nakhota LLC consulting firm in New York.

Tommy Vietor, a spokesman for the Obama administration, declined to comment, as did State Department spokesman Philip Crowley.

Castro Government

While the entry of U.S. companies also hinges on the willingness of Castro’s government to let them in, the Cubans would probably be open to the idea because they want the inflow of cash amid an economic slump, Sabatini said.

Cuban state phone company Etesca, based in Havana, has a monopoly on all fixed-line and mobile services. Milan-based Telecom Italia SpA has a 27 percent stake in the company.

“The rules are so unclear,” Ralph de la Vega, AT&T’s chief of wireless, said in an Aug. 20 interview. ‘Until there’s real change there’s not much we can do about it.”

Chile Claims Top Spot Based on Advanced Infrastructure

By Tarun George

Over the next five years, LatAm wireless network traffic is slated to rise at a CAGR of 86% – pretty significant compared to the 61% CAGR average for emerging markets as a whole. And yet Latin America is still a relatively small telecom services market. Despite advances in information and communication technologies (ICT), there are large discrepancies between countries – some with modernized and liberal telecom networks, and others with closed and politicized systems in place. If you’re a prospective sourcing client, those discrepancies can make or break your operation.

To clear the air, we decided to leverage some expert opinion and develop our  2010 Ranking of the Top Five Telecom-Ready Sourcing Destinations in Latin America.

As usual when we do rankings at Nearshore Americas, it’s important to note that the topic (in this case telecom) is the only factor we considered, and not other aspects of a great sourcing destination. The countries below are the ones we think are best able to support the requirements of sourcing companies, solely from a telecom standpoint. Some parameters we used to position our choices:

• Liberalization – How open is the telecom system for both international and domestic competition? How much control does the government have, and how politicized is the system?
• Modernization – The amount of investment in a country’s communications infrastructure, and the resulting maturity and next-generation features of the networks.
• Redundancy in the event of disasters – Senior Editor Dennis Barker recently reported on how critical it is for companies to maintain business continuity and data access.
• Level of broadband penetration – Can the country support the telecom needs of a scalable sourcing operation? Is the penetration only high in major cities, or is it more evenly spread?

We found that for the most part, countries with the highest economic growth and GDP per capita also have the strongest correlation with these parameters. We also found that mobile services in Latin America are generally very competitive, while fixed line markets are often closed with low penetration rates. That is improving however, and some of these rankings reflect the extent to which countries are developing their fixed line services.

Our 2010 Latin America ICT Ranking:

1) Chile

Chile is the country with the highest adoption of new technology in Latin America. One reason is the level of education of the public, and another is the lack of taxes for technology. The result is the most advanced telecom infrastructure in Latin America – one that ranked first in the region on the World Economic Forum’s 2010 Network Readiness Index. Chile offered 4G services like mobile WiMax before its competition, and congress recently passed a landmark Net Neutrality law that isn’t even on the table for other LatAm countries. In terms of broadband penetration, Chile again leads with 10.3%, although admittedly it is helped by its small population.

Even more telling than the modernized network is the level of open competition in Chilean telecom. The local population is served mainly by Telmex and Telefónica (or Movistar as it’s known in Chile), while international carriers like Orange, British Telecom and Verizon serve the foreign companies through their submarine networks. The liberal system is fostered by the national regulator Subtel. “Subtel ensures competitive prices, and also monitors the quality of services that each competitor offers”, says Jose Roberto Mavignier, ICT Industry Manager for Latin America at Frost and Sullivan. “It assesses factors like availability of connections to companies, time taken to solve connection issues, etc. It’s difficult to offer bad service since Subtel will hand out fines if those parameters are not obeyed”.

In the wake of the recent Chilean earthquake, everyone wants to know how resilient the country’s telecom system is. Consensus is that although very strained, Chile’s network stood up well in the aftermath. “Chilean company Entel was created in the 70’s as a redundant organization to prevent the failure of companies. There are many redundant networks, data centers are well protected, and installations are modern and prepared to resist natural disasters”, says Mavignier.

2) Brazil

“In terms of open competition, Brazil is getting there”, according to Roz Roseboro, Principal Analyst at telecom consultancy Analysys Mason. In the mobile arena there are seven different players, international and domestic, which is something you won’t see anywhere else in Latin America. “We also just heard rumors that Vodafone is considering entering the Brazilian market, as well as NTT from Japan. Everyone’s looking at Brazil to see if it would be profitable”, says Mavignier. Partly because of the many 3G operators, and partly because of its size, Brazil dominates Latin America in numbers of HSPA subscriptions, with around 57% of the regional total. For fixed lines, Brazilian provider Oi is number one, followed by Telefónica.

All this helps bring down prices and increase access to telecom, but Brazilian regulator Antel does need to be more proactive in increasing broadband competition. According to Cisco Brazil, there is strong demand in the country for broadband services, and Brazil must invest more in tech infrastructure. The country currently has fully digital fiber optic networks connecting all the major cities internally, and broadband penetration is at 5.8% with the state of São Paulo having the most number of connections. For its part, the Brazilian government is trying to take broadband access to the whole country and especially the smaller cities in the next three years, under the new National Broadband Plan.

In terms of quality of services offered, Antel is usually an efficient monitor – last year after four blackouts on Telefónica’s broadband, it ordered the company to stop sales completely until improvements were made to the service.

3) Colombia

Colombia’s telecom infrastructure has gone through a considerable amount of modernizing in recent years. What we see now are extremely well connected business centers, but poor service availability in smaller urban areas. “As long as you’re setting up a big plant in one of the centers, connectivity is not a problem”, says Wally Swain, Senior VP of Emerging Markets at Yankee Group. “Colombia also has very liberal Free Trade Zone rules that allow you to bring in telecom options quite cheaply”. The country is now investing more in fiber optics, and has good satellite coverage as well as 3G and GSM coverage.

There are at least three important mobile operators in Colombia: Movistar, América Móvil and Tigo. The mobile market is modernized and is one of the fastest growing in Latin America. Even better, the government is being proactive with a strong regulatory framework that encourages competition. Unfortunately for outsourcing however, Colombia’s fixed line sector seems to be stagnating according to ICT statistics company Point Topic. Broadband penetration is on par with other LatAm countries (currently at 4%), but there are only two strong local fixed line providers – ETB and UNE – and the state has substantial control over them.  Earlier this year Cisco analysts stated that because of slow growth in 2009, Colombia’s broadband market is reaching saturation point due to lack of exploration of new market niches. The country’s regulator CRT Colombia must work to open up the market to smaller businesses, as well as encourage more private competition in broadband services.

4) Mexico

Broadband is one of the highest growth sectors in Mexico’s telecom market, but we give low points here for the lack of competition. América Móvil (after taking over parent company Telmex) is dominant in the country. “Mexico is surprisingly stagnant given its size and economy”, says Roseboro. “They say they want to increase competition, and to some extent they’re opening up the mobile market. But there’s no opening up the fixed line side. New companies consider Mexico only for the mobile market, and I don’t see anybody reducing the dominance of Telmex”. However the government is now trying to regulate unbundled access for competitors – three companies including Telefónica recently won the rights to use the government’s fiber-optic lines to offer communications and internet services across the country independently, instead of going through Telmex.

According to Wally Swain, Mexico’s regulation body Cofetel is ineffective. “There’s a war going on between the communications ministry and the regulator, and the regulator is losing out. The rules say you can do certain things, but in practice there’s no control. The regulator has been unable to enforce what it wants to have happen”. Once again, things could improve with the new chairman of Cofetel who took office last month.

The lack of competition also contributes to a lack of modernization of Mexico’s telecom system. “Since the vast majority of networks belong to Telmex, they didn’t have to invest much to compete and be profitable. As a result, a very small percentage of networks in Mexico are supplied with new technologies”, says Mavignier. Overall however, Mexico is one of the best connected countries in Latin America, and home to a substantial number of large scale IT operations.  Its biggest advantage is being right on the US border.

5) Argentina

Argentina makes the list because of the size of its telecom market. With the third largest mobile market in Latin America after Brazil and Mexico, and a very high broadband penetration of 10%, Argentina has a well developed telecom infrastructure. Three main operators are Claro, Telecom Personal and Movistar. “The market is split up between the north and the south regions, and fixed line penetration is quite unevenly spread”, says Roseboro. “They tend to focus mainly on the urban centers with the result that cities like Buenos Aires are completely tapped out”.

In terms of competition in telecom, the system is completely politicized. “The regulator has no independence from the Argentine government”, says Swain. “The Kirchners manage the economy by who is for them and who is against them. Fibertel, the most powerful media group fell out with them two years ago, and the government is still making problems for them”.

The main obstacle to telecom modernization in Argentina is really economic development. It’s why the country hasn’t invested much in its networks, and why there’s not much competition. But as international investors become more interested in Argentina, we’re hoping for a telecom revival.

Have opinions on our rankings? Make your thoughts known by posting comments below.

PRNewswire: Despite the country’s political instability and widespread poverty, Nicaragua’s mobile penetration will top 80 percent by 2015 from 53.9 percent in 2010, fueled by expansion of prepaid subscriptions and urban mobile broadband connections, according to a new report from Pyramid Research (www.pyr.com).

Nicaragua: Prepaid Services to Drive Mobile Growth in a Challenging Market offers a precise profile of the country’s telecommunications, media, and technology sectors based on proprietary data from our research in the market. It provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies. Download an excerpt of this report here: http://www.pyr.com/downloads.htm?id=18&sc=PRN072010_CIRNIC.

Nicaragua is expected to grow at a CAGR of 6.5 percent over the next five years to advance from $478 million for 2010 to $655 million in 2015, well ahead of the 3.7 percent average expected for Latin America, notes Jose Magana, Senior Analyst at Pyramid Research. “In Central America, the growth rate in Nicaragua will be the fastest of all countries due to its still-early stage of penetration in mobile services and our expectation for growth even in the fixed sector,” he says.

Mobile penetration in Nicaragua will close at 53.9 percent in 2010, the lowest in Central America. “The low competitiveness of the market, with just two mobile operators, paired with the lowest income in the region curbs the adoption of services,” Magana explains. “There is still a large percentage of the population underserved; by the same token, experiences in Africa with mobile payments and health initiatives prove that there are opportunities for operators if services targeting the bottom of the pyramid succeed,” he adds.

“We forecast that mobile penetration will reach 82 percent by 2015, driven by expansion of prepaid subscriptions and urban mobile broadband connections,” says Magana. Prepaid subscriptions account for 94 percent of total mobile connections, in line with Nicaragua’s Central American neighbors.

SOURCE: Reuters

Cubans’ ability to communicate with one another and the world remained well below the norm for the Caribbean and Latin America in 2009, according to a government report released this week.

Despite the legalization of mobile phones in 2008 there were just 1.8 million phone lines in the country, or 15.5 lines for every 100 inhabitants, which was the lowest in the region, according to the United Nations International Telecommunications Union.

Some 800,000 of the phones were mobiles.

Computers numbered 700,000 or 62 per 1,000 residents, compared with more than 160 per thousand residents in the region, and many were in government offices, health and education facilities.

There is no broadband in Cuba and the relatively few Internet users in the country suffer through agonizingly long waits to open an e-mail, let alone view a photo or video. This also hampers government and business operations.

Cuba blames the United States embargo, saying it must use a satellite system and is limited in the space it can buy.

Last year, in a move easing some aspects of Washington’s 48-year-old embargo against Cuba, President Barack Obama allowed U.S. telecommunications firms to offer services in Cuba as part of a strategy to increase “people to people” contact.

While Cuba’s leaders welcomed the move, they reiterated their demand that Washington completely lift the embargo and to date there has been no progress, business sources said.

The Cuban state monopolizes communications and dominates the economy.

While the National Statistics Office reported on its web page (www.one.cu/ticencifras2009.htm) that there were 1.6 million Internet users, or 14.2 per 100 residents, in most cases this was to a government intranet.

In Jamaica, Internet access was 53.27 per 100 inhabitants in 2008, the Dominican Republic 25.87 percent and in Haiti 10.42 percent, the ITU reported.

Access to satellite television was also severely restricted. In Cuba, satellite TV access is illegal without special permission from the government and authorities regularly raid neighborhoods and homes in search of receptors.

Officials insist the data for individual use and ownership of computers and telephones is misleading, as priority is given to social use of telecoms technology, from health and education to government-operated computer clubs in every municipality.

Cuba and ally Venezuela have formed a joint venture to lay cable between the two countries, but completion of the project is at least a year off.

Cuba’s failure to embrace modern telecoms is a major complaint among citizens under 50 years old, who cite it as one of the reasons they seek to migrate abroad.

(Editing by Jeff Franks and Doina Chiacu)

Panama has made a leap ahead of other Central American countries in terms of the level of broadband competition and speed of access, helped in part by a utilities regulator – Asep – that has strived to introduce policies that meet market demands, Elias Vicente, senior analyst with Signals Telecoms Consulting, told BNamericas.

Panama has had fixed-line number portability in place for years and is due to introduce mobile line number portability before year-end, which will provide an additional stimulus for competitors to improve their service offerings to retain customers.

According to the analyst, Panama is head and shoulders above its neighbors with operators Cable & Wireless (C&W) and Cable Onda both offering speeds of over 5Mbps, while the majority of Central American operators do not offer speeds over 2Mbps.

Panamanian operators are also becoming competitive in Central America in packaging of services.

C&W’s introduction of a pay-TV service called +TV Digital fits with the company’s strategy to position itself as a provider of multi services and attempt to differentiate itself from pay-TV market leader Cable Onda, given the fact that C&W also has mobile telephony services.

Vicente believes that Cable Onda and Telecarrier, which merged last year, could be an acquisition target for large regional competitors like America Movil, which recently entered the Panamanian market with its Claro mobile brand and could add on Claro TV as it has done in other Central American markets.

The Telecarrier/Cable Onda offering could be attractive as it combines Telecarriers’ experience in telecoms services to the business segment and Cable Onda’s offering to residential customers, according to the analyst.

Spain’s Telefonica could also be an interested party, given that its Movistar mobile brand is well established in Panama.

“It’s a possibility within the market. However, in the rest of Central America the operator has opted to deploy its own fixed-line networks, without acquiring other companies,” he said.

Signals has predicted that income from broadband and pay-TV services in Panama will total more than US$2.2bn from 2010-15.

BY NEARSHORE AMERICAS STAFF

While Jamaica’s tourism industry has taken a US$350 million hit in losses because of recent unrest, the country is reporting that its Information and Communications Technology (ICT) sector remains robust in spite of the violent conflicts.

“Despite the recent unrest in sections of Kingston, companies in the information and communications technology sector are indicating that they have not sustained major disruptions and are already experiencing the return of normal operation levels in their businesses,” said a representative from   Jamaica Promotions (JAMPRO), the government agency with responsibility for the sector.

Last week, part’s of the country’s capital – West Kingston descended into unrest after Prime Minister Bruce Golding gave instruction for extradition of Christopher “Dudus” Coke, an “area don” in Tivoli Gardens, a community in West Kingston. Coke is wanted by the United States on allegations of drug trafficking and gun running.

But residents from Tivoli Gardens barricaded all roads in and out of the community. The Prime Minister then order the security forces to remove the barricades but they were attacked by gunmen who burned several police stations, killed a member of the Jamaica Defence Force and two policemen in a related incident hours before the security force operations began.

A limited state of emergency was enforced by the Government in Kingston and parts of St. Andrew. This gave the security forces extraordinary powers and limited the movement of residents. Order was restored to the community days later but 73 civilians were killed while the security forces traded fire with the gunmen.

While  ICT businesses in Montego Bay, St. James on the western side of the island, were not affected, businesses located in Kingston and neighbouring parish, St. Catherine lost productivity because staff living in these areas was affected by the unrest and one business had to close its doors during the unrest.

“Attendance is done but it has been business as usual,” said David Follwood, chief information officer for Fullgram Solutions, a customer contact centre located at Oxford Road in New Kingston, an upscale business district in St. Andrew miles away from West Kingston. “The office is open and we continue to service our clients,” he added.

Phyllis Green, director of Carisbrooke Limited, a Kingston-based full service centre said the company’s Half Way Tree Road office was not directly affected but staff attendance had declined to 70 per cent because many of the employees lived in Portmore, St. Catherine.

She said staff had “self-imposed curfews due to reduced transportation routes and security precautions.”

Meanwhile, ACCENT in New Kingston was proactive as it implemented steps to ensure business continued. These measures include short term hotel accommodation in the New Kingston areas for an emergency team of staff as well as the contracting of a bus operator to handle transportation requirements.

“For the staff who braved the elements to come to work each day, we are ensuring that they leave within a reasonable timeframe so that they can be home by 6 p.m.,” said Paul Rodriquez, information technology and facilities manager of ACCENT.

Meanwhile, broadband telecommunications firm Flow closed business for one day but has since reopened. Andrew Fazio, Flow’s Commercial director said most staff members have come into work.

In Montego Bay ICT businesses were unaffected by the unrest in West Kingston. Jackie Sutherland, chief executive office of Global Gateway Solutions said there was no negative impact on the business operational activities.

Roger Williams, general manager of VistaPrint, producers of printed products also gave similar responses as he said the disturbance was 200 kilometres away from his business.

“The current unrest in some sections of Kingston has had absolutely no impact on our operations here in Montego Bay,” he said. “The vast majority of our employees and suppliers are from the wider Montego Bay area and therefore, there have been no disruptions to any schedules.”

SOURCE: LIGHTREADING

Ericsson AB (Nasdaq: ERIC) has further cemented its position as the world’s leading network managed services provider by landing a three-year deal with Telefónica Brazil (also known as Telesp), part of Telefónica SA (NYSE: TEF)’s Latin American empire.

The value of the deal is undisclosed, although around 100 staff will be moving over from Telefónica Brazil, a fixed-line service provider with about 2.8 million DSL customers, to Ericsson.

Under the terms of the deal, Ericsson is to operate Telefónica Brazil’s network operations center in São Paulo and manage the core, transmission, and ADSL networks. It follows a deal signed between Ericsson and the operator in 2008 to maintain the carrier’s new fiber network in São Paulo.

The deal is worth noting, not only because it’s another victory for the Swedish giant ahead of its main managed services rivals, Alcatel-Lucent (NYSE: ALU) and Nokia Siemens Networks , but because it’s a fixed-network engagement, which is far less common than outsourced mobile network deals.

“To date, outsourcing is still mostly about the mobile business,” noted Elizabeth Bramson-Boudreau, analyst at large, in a recent Pyramid Research report, “Telecom Managed Services.” “Of the [191] deals analyzed [in the report], 70 percent involved a mobile player, and mobile challengers outnumbered mobile market leaders by a factor of nearly 4 to 1.”

Ericsson’s Elin Ahldén says fixed-line managed services deal aren’t so uncommon, however. “It’s true that the wireless operators have been quicker to turn to managed services, but Ericsson has several references with mobile-plus-fixed networks — for example, Sprint Nextel Corp. (NYSE: S) — as well as standalone fixed networks such as Netia Holdings SA [Poland], Romtelecom S.A. [Romania], TeliaSonera AB (Nasdaq: TLSN) [Sweden], TeliaSonera International Carrier (TIC) , and many more.”

Adds Ahldén: “Ericsson’s managed services offering is technology and vendor agnostic, and our skills and capabilities can be applied across the board… Wireline networks will certainly continue to be very important to us.”

The Ericsson win also represents another managed services contract in Latin America, which hasn’t adopted the managed services model as quickly as other regions. “In Latin America, outsourcing has made relatively few inroads, aside from in Brazil,” observed Bramson-Boudreau in the Pyramid report.

According to the Pyramid report, of the 23 publicly announced deals in Latin America by the end of 2009, Ericsson accounted for eight, NSN for 10, and AlcaLu for five.

Bramson-Boudreau pointed out, however, that although NSN has the largest number of publicly announced deals globally (81), some of them are fairly limited in scope. Ericsson, meanwhile, manages networks with a combined subscriber base of more than 400 million, while NSN manages 300 million, and Alcatel-Lucent 180 million.

“On a competitive basis, trends generally favor Ericsson to maintain its market lead as third-phase outsourcing draws on the Swedish company’s credibility in network sharing deals,” said Bramson-Boudreau. “Moreover, the fact that Ericsson was able to sign the Sprint deal — which calls for it to manage multiple networks, including the operator’s wireline network — suggests that Ericsson may be successful at branching into wireline outsourcing, a key area going forward.”

Ericsson has signed 16 new managed services deals in the first quarter of 2010, and has made it clear that network managed services is a core focus area for the company. Indeed, the Swedish equipment manufacturer was able to increase sales in the managed services division during the first quarter of 2010 by 17 percent to SEK4.9 billion (US$629 million) year-on-year, while sales in the overall global services division increased by 3 percent to SEK18.1 billion ($2.3 billion). This contrasted with a 14 percent decline in network sales to SEK24.7 billion ($3.1 billion) in the same period.

But the company is facing increasingly strong competition from Nokia Siemens Networks and Alcatel-Lucent, while other vendors are starting to land managed services deals.

NSN, for example, recently signed a large outsourcing contract with NII Holdings Inc. (Nasdaq: NIHD) in Latin America, which is outsourcing all of its network operations in the region (Argentina, Brazil, Mexico, Peru, and Chile). “Although contract values were not made public, NSN will take on 1,000 NII employees and open a regional network operations center (NOC), suggesting that the deal is a large one,” noted Bramson-Boudreau. (See NSN Shrinks Again, But Q2 Looks Rosier.)

Of the other players, Motorola Inc. (NYSE: MOT) has signed outsourcing contracts with Zain Group in Iraq and Kuwait, and with Warid Telecom Pvt. Ltd. in Bangladesh. Huawei Technologies Co. Ltd. , meanwhile, recently signed a five-year network operations and maintenance contract with Jazztel plc in Spain, the Chinese supplier’s first major managed services deal with a European operator. (See Huawei Wins Jazztel Deal.)

SOURCE: BLOOMBERG

Costa Rica’s telecommunications regulator has published a preliminary request for bids to open the Central American country’s cell-phone market to private companies, heralding the end of a 47-year state monopoly.

The country’s regulator, known as SUTEL, yesterday released a draft of bidding rules on its website for three mobile spectrum licenses after the Comptroller’s Office dropped a conflicts of interest probe that delayed bidding by three months, said SUTEL President George Miley.

SUTEL hopes to award concessions as early as September, Miley said in a telephone interview from San Jose. He expects bidding comparable to recent concessions in Honduras and Panama that exceeded $80 million.

Companies interested in bidding include Irish-owned mobile operator Digicel Group Ltd., America Movil, Latin America’s largest wireless-phone carrier, Spain’s Telefonica SA, London- based Cable & Wireless Plc, and Millicom International Cellular SA, Miley said.

With the exception of Cuba, Costa Rica is the last remaining Latin American country with a state telecommunications monopoly, Miley said.

Costa Rica agreed to end the monopoly under the Central American Free Trade Agreement with the U.S., which was passed in a 2007 referendum.

SOURCE: FIERCE TELECOM

Latin America’s telecom market, much like its landscape, is a diverse tapestry of everything from traditional wireline voice services to next generation networks (NGNs) consisting of fiber and DOCSIS-based broadband, VoIP and 3G wireless.

But as Jose Otero, President of Signals Consulting explains, Latin American service providers face a number of regulatory challenges in obtaining their NGN goals.

“The main obstacle to the expansion of NGN in the region is outdated regulatory constraints,” he said. “This slows investment from telecom operators throughout the region.”

Despite the regulatory challenges, Latin American incumbent and competitive service providers alike are pursuing some form of Next Generation Network (NGN) strategy that includes a mix of Fiber to the Home (FTTH), Fiber to the Node (FTTN) and DOCSIS 3.0-based cable broadband networks.

The FierceTelecom team takes up these issues in our latest eBook: Latin America’s Next Generation Networks.

Two Latin American countries take notice of in Latin America’s NGN race are Brazil and Mexico.

Host of the 2016 Olympics, Brazil’s largest service provider Oi is rolling out FTTH in wealthy neighborhoods in Rio de Janeiro, while French conglomerate Vivendi successfully bought out competitive wireline operator GVT.

Mexico’s NGN movement is no less compelling. Seeing growing competition from aggressive competitors such as Spain’s Telefonica and Megacable, telecom magnate Carlos Slim is moving to consolidate his wireless and wireline holdings by consolidating TELMEX and America Movil into one company.

However, Mexico’s competitive providers aren’t sitting pat. Looking to reduce their dependency on Slim’s empire for wholesale network connectivity, a consortium of competitive providers launched a joint bid to purchase dark fiber from the Mexican government for long-distance capacity.

Interestingly, Latin America’s NGN initiatives are prompting competitive wholesale service providers (NTT America and XO Communications) are responding with new wholesale connectivity options to connect into the U.S., Asia-Pacific and Europe.

Along with new wholesale opportunities, the Latin American NGN opportunity has been attracting major telecom equipment vendors (Alcatel-Lucent, Cisco, Huawei, and Nokia Siemens Networks) to offer their wares to the Latin American service provider community.