Building the 'One-Stop-Shopping' Option in Latin America's Telecom Market; Yankee Group Report Identifies Pan-Regional Carrier Strategies in Latin America.

Business/Technology Editors

BOSTON--(BUSINESS WIRE)--June 5, 2001

Although the telecommunications carriers' space in Latin America is well populated, few operators enjoy true pan-regional status. While geographic coverage is one of the main factors that make a pan-regional carrier, companies in this category share other characteristics, too: international partners or financing, deployment of local infrastructure, movement toward IP-based services, an integrated service portfolio, and a focus on corporate markets. In its new Report, "Pan-Regional Carriers: Shaping the Competitive Environment in Latin America," the Yankee Group profiles AT&T, Telecom Americas (Telmex, BCI, SBC), Impsat, MCI WorldCom Latin America, Telecom Italia, and Telefonica, six operators that truly fit the pan-regional definition.

Pan-regional carriers are very well positioned to provide the most-wanted "one-stop-shopping" option for corporate clients. While some of these players are trying to integrate their Latin American properties with worldwide holdings across vertical service categories, others are looking to gain market advantage by consolidating their in-region assets for a geographical play. Yankee Group senior analyst Ignacio Perrone states, "Scale is critical to both of these strategies, and operators of all sizes are actively seeking partners, allies, and acquisition/merger targets. A widescale presence does not always correlate with large revenues; but in the connectivity game, having more points of presence has a positive impact on the bottom line."

But the emerging competitive scenario in Latin America has witnessed a recent abundance of fiber. The Yankee Group believes that after massive deployments during 2000 and 2001, most major markets and routes will reach their saturation point during 2002. Since most pan-regional carriers will have extensive infrastructure in place by the end of 2001, they will increasingly choose to lease capacity instead of building new networks.

Lower prices and agreements to exchange capacity or services also stem from the abundance of fiber. "Prices will continue their decline at a fast pace, with infrastructure-based CLECs as the most competitive players; although these operators will also be among the most cooperative in terms of capacity swaps and service agreements," said Perrone.

As connectivity becomes essential to today's businesses, the shift toward IP-based telecommunications is gaining momentum. The pervasiveness of the Internet and electronic commerce is the force behind the change. For pan-regional carriers serving corporations and the corporate community in Latin America, it is a question of either adapting to the IP world or disappearing.

NOTE TO EDITORS: For more information or to schedule an interview, please contact Ignacio Perrone at [e-mail].

The Yankee Group (www.yankeegroup.com)

As a global leader in technology research and strategic consulting, the Yankee Group provides accurate, reliable, and trusted research, custom consulting, and personalized one-to-one client interaction encompassing all areas essential to e-business success: Internet, electronic commerce, communications, wireless, computing, and enterprise applications. Established in 1970 and headquartered in Boston, the company maintains offices throughout North America, Europe, Latin America, and the Pacific Rim.