SIP Trunking and Latin America

							               Joel Maloff
        Maloff NetResults
joel@maloffnetresults.com
               Phone.com
      jmaloff@phone.com
September 2011
 SIP Trunking has not been adopted in Latin
  America at the same rate as in the USA.
 The major factors affecting this adoption
  include:
     Cost and availability of broadband Internet
      services
     Minimum cost contracts
     Questionable legal status of SIP trunking
     Incumbent telco efforts
 Argentina
 Brazil
 Chile
 Ecuador
 Mexico
 Peru
 Growth  rates for SIP trunking vary from
  country to country in Central and South
  America.
 Anecdotal evidence points to a 25% year-over
  year growth rate over the past three years.
 Dedicated    circuits (E1) are costly
    Monthly recurring charges can be as high as
     US$1,000.
 DSLservices may not offer sufficient
 bandwidth and quality to provide a reliable
 alternative to traditional telco circuits.
 Inmany parts of Latin America, businesses
  are required to take a minimum cost
  contract which combines fixed circuit fees
  and long distance usage.
     Reducing the costs associated with long distance
      and international calls may be irrelevant if
      minimums still must be met.
    Trunking is not illegal but neither is it
 SIP
 explicitly permitted.
     Some incumbent carriers, such as Belize, have
      blocked SIP traffic.
     Most regulatory agencies are not technology-
      oriented, focusing on the specific telecom
      services independent of the supporting
      technology.
         Most definitions are still tied to old concepts like
          demarcation points based on physical FXS subscriber
          interfaces, DIDs/local areas and physical locations as
          monolithic entities, etc.
         This makes it very difficult for a VoIP service provider
          to comply with regulatory requirements.
 Some  of the traditional carriers have
  introduced SIP Trunking but at a price that is
  equal to prior services therefore minimizing
  a financial incentive to move forward.
 Not all national carriers have introduced SIP
  trunking services yet, and these carriers are
  viewed as followers rather than as leaders.
 DIDs are available from many Latin American
  countries but porting is a challenge thus far.
 In some countries (e.g., Argentina), DID
  portability is an issue.
     For example, having a Buenos Aires DID
      assigned to a SIP-based softphone running on a
      laptop would require the user to never leave
      the Buenos Aires local calling area to use it!
 Because  SIP Trunking has not achieved
 significant adoption yet in Latin America,
 technical issues, including interoperability,
 are still a concern.
    Connecting some IP-enabled PBXs to SIP trunks
     have been problematic.
    Some integrators use an Asterisk PBX as a
     makeshift Session Border Controller.
 Multinational  corporations and expatriates
  living in Latin America are increasingly using
  SIP trunking and VoIP for US telephone
  numbers.
 It is expected that legal protection for use of
  SIP trunking may begin to be enforced in
  Latin America.
 Incumbent carriers are beginning to see the
  benefit of offering SIP trunking services.
 Cable broadband deployment is also growing.
   In the Latin American region, the broadband penetration
    rate will nearly double, increasing from 7 percent in 2010
    to 12 percent by 2015. (Research and Markets, January
    2011)
              Read more: http://www.centredaily.com/2010/12/08/2389136/research-and-markets-in-
    the-latin.html#ixzz1AHUHh2qF



   “Fixed Broadband: Worldwide Forecast 2010-2015 (Analysis
    Mason),” predicts a compound annual growth rate of 15.4
    percent for broadband in Latin America over the next few
    years, which is more than any other region in the world.
       “This is a case of a sleeping giant awakening. The region was slow initially to adopt the
        internet, accounting for just 8 percent of the global online population in April 2010. But Latin
        America was already the world’s fastest growing region for online penetration, climbing 22
        percent from April 2009 largely through broadband deployment. The region is culturally ready
        for a massive surge in broadband…”
           http://broadbandbreakfast.com/2010/12/latin-america-set-for-fast-growth-in-
            broadband-penetration/
           December 3, 2010
 Broadband   penetration in major countries:
    Chile 17%
    Argentina 12%
    Mexico and Uruguay 10%
    Venezuela 9%
    Brazil 8%
 Thesenumbers do not take into account
 business connections which total about
 180,000 lines as of late 2010 with a CAGR of
 about 3.5% over the next 4 years.
 “LatinAmerica is taking the leadership in
 mobile broadband adoption, and the
 impact will be as hard to predict as it has
 been when trying to forecast uptake
 across other technologies in other
 regions.”
       Latin America Telecom Insider / Vol. 3, No 3, June
        Edition, Pyramid Research, June 1, 2011
 LatinAmerica represents a tremendous
 opportunity for growth in the use of SIP trunk
 services.
     In Chile alone, SIP trunking is expected to double
      from 2010 to 2011 based on forecasts for Chilean
      ITSPs.
 As with all regions, there are unique
  circumstances that must be understood,
  including political, economic, and technical.
 Presuming that a US model can be readily
  applied in Latin America is in error.
September 2011
 SIP Trunking has been growing more quickly
  in Europe than in Latin America but still
  more slowly than in the USA.
 The major factors affecting this adoption
  include:
     Cost and availability of broadband Internet
      services
     Predominance of ISDN as a preferred method of
      access
     Incumbent telco efforts
1.   UK                  6. Norway
2.   Italy               7.Greece
3.   Poland              8. Belgium
4.   France              9. The Netherlands
5.   Sweden              10. Portugal




Source: InGate Systems
 SIPtrunking will replace ISDN in due course
 but it will take a number of years. The
 uptake will be very different from one
 country to another depending on incumbents'
 voice strategy and the quality and
 availability of the network access reaching
 small or remote locations.
           Western European SIP Trunking Market, 2010-2014,
            IDC, July 22, 2010
 Sweden
    ISDN remains as a cost advantage limitation.
    Large carriers have yet to be significantly
     challenged by smaller ITSPs and have been
     reluctant to cannibalize their own revenue until
     forced to do so.
    These large carriers are now beginning to bundle
     SIP trunking as a response to the ITSP threat.
 Finland
    SIP trunking is quickly taking hold with significant
     growth anticipated in 2011.
 Denmark
    ISDN is again an issue.
    It is anticipated that the primary LEC will halt
     selling and supporting BRIs which may lead to
     renewed interest in SIP trunking.
 Spain
    Major carriers dramatically reduced prices for
     services in 2010, forestalling any significant
     growth in SIP Trunking.
    Orange and ONO (cable operator) are expected
     to offer VoIP SIP services during 2011 for
     Residential and SOHO.
 SIP Trunking WILL continue to grow in Latin
  America and Europe but more slowly than in
  the USA.
 Factors that drive SIP trunking in the USA are
  less clear in Latin America and Europe.
     Lower penetration of broadband Internet access
      in Latin America is impeding growth but
      moderating.
     Widespread ISDN in Europe minimizes the
      immediate cost advantage.
     Influence of large national carriers slows the
      opportunity for adoption.
 SIP trunking WILL become the dominant form
  of voice communication for small to medium
  businesses in Latin America and Europe but it
  will take time – likely five years or more.
 Cost will not be the same driver as in the
  USA.
     Incorporation as part of a unified
      communications strategy will be key.
     Inclusion as part of an IP-enabled PBX will make
      SIP trunking use easy and obvious.
     Access to foreign telephone numbers – when
      permitted – will expand functionality.
   August 2011 - NTT Communications introduces
    UCaaS over IP-VPN
     Expanded coverage of its SIP Trunking Plan, initially
      released in Singapore May 2011, to 15 countries
      including Australia and the UK, and to 30 countries by
      March 2012.
     Arcstar Global IP-VPN required

   July 2011 – Europ Assistance SA (Johannesburg,
    South Africa) implements SIP Trunking via MPLS
       Europ Assistance SA have operational agencies and
        respondents in 208 countries, answering more than 33
        million telephone calls and handling 6.5 million
        assistance cases around the world each year.
    trunking and Unified Communications are
 SIP
 beginning to capture market share outside of
 the USA.

 Themodels may vary but the trends are
 undeniable.
Thank you for your
interest!

         Joel Maloff
      Maloff NetResults
 www.maloffnetresults.com
 joel@maloffnetresults.com