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Analysis of the Latin American Hosted IP Telephony and Integrated UCC Applications Market

  • October 2014
  • 65 pages
  • Frost & Sullivan
Report ID: 2418555

Summary

Table of Contents

Carriers Prove Essential in Hosted Market Development

Key Findings

• The hosted IP telephony and integrated UCC applications (apps) market in Latin America (LATAM) achieved $ million in 2013 revenues.
• The market is expected to exhibit an annual growth of % in 2014 and an impressive CAGR of % from 2013 to 2020.
• The total number of installed users (IU) in 2013 reached and will experience a CAGR of % over the 2013–2020 period.
• Corporations with more than 500 employees accounted for % of total IU in 2013, while the remaining users were divided among large enterprises ( %), medium-sized enterprises ( %), small enterprises ( %), and micro enterprises ( %).
• Financial institutions, services, retail and consumer goods, and government are the key vertical industries for this market.
• Mexico is the leading country in LATAM in terms of IU and accounted for % of them in 2013. Brazil’s share of IU was % in 2013, but it is expected to significantly grow over the forecast period.
• Argentina and Colombia are other important countries each with close to % of IU.
• In terms of channel partners, most of these services are implemented by telecommunications service providers (carriers), although some systems integrators have implemented these services in 2013.
•Most of the main carriers in the region either already have a commercial offering of hosted IP telephony and integrated UCC apps or plan to launch one before mid-2015.
•While some carriers have yet to launch a commercial offer as of 3Q 2014, they have already implemented customized hosted solutions for a reduced number of enterprises.
•Most of the implementations of these services in LATAM take place within a hybrid environment, meaning that they do not replace the entire communications system previously implemented in the company, but are restricted to providing functionalities to a portion of the total employees only.
•Nevertheless, there are cases in which enterprises have already implemented hosted IP telephony and integrated UCC apps across the entire organization.
•Loyalty from the applications provider (vendor) is an important competitive factor in this market. If a company already has an on premise communications solution provided by one particular vendor (e.g., Cisco, Avaya, Unify), it is likely that this company will implement hosted solutions provided by the same vendor because of the confidence generated through previously well-performed communications systems implementation.
•However, only xx% of IU acquired a premium license (with xx or more functionalities on top of the PBX service), while xx% had an advance license (xx– functionalities) and xx% had a standard license (xx– functionalities).
•The addressable market for hosted IP telephony and integrated UCC apps was xx million IU in 2013, while the nascent stage of this market generated a penetration rate of xx%. However, the rapid growth that is expected for this market leads to a projected penetration of xx% in 2020.

CEO’s Perspective

- Educating the market is needed about the tangible benefits of implementing hosted communication solutions.
- Security issues remain a concern for many companies in LATAM when adopting hosted solutions.
- Video, mobility, and multiple-device access are key functionalities for the premium packages of hosted UCC.
- Channel capabilities form a critical factor for the vendors in this market.
- Distributed large enterprises and corporations are driving the demand for hosted IP PBX/UCC services.

Market Definitions

Unit estimates and forecasts are presented in terms of installed hosted IP telephony and UCC services users (also referred to as seats), roughly equivalent to software licenses and endpoints/stations as of the end of any given year. Users with multiple endpoints (e.g., IP desktop phones, PC soft clients, mobile clients) have been counted only once.
Revenue forecasts for hosted IP telephony are based on an average monthly recurring charge incurred by enterprise customers on a per-seat/per-user basis. Monthly recurring charges generally include private branch exchange (PBX) functionality, local and long-distance calling, the cost of the data line, Internet access costs, and any additional features and applications (voicemail/unified messaging, automated attendant, conferencing) purchased by customers as part of the hosted IP telephony or UCC bundle. The revenue forecasts do not include one-time equipment costs—such as those of IP handsets, routers, switches or gateways—or installation costs incurred by enterprise customers. Certain equipment costs may, however, be part of total revenues if the service provider is leasing or renting the equipment and its cost is not itemized on the monthly invoice.
The study covers both multi-tenant and multi-instance hosted IP telephony and UC services, but it does NOT include premises-based multi-instance solutions or hosted single-tenant solutions.

Key Questions This Study Will Answer

What is hosted IP telephony, UCaaS, and cloud UCC, and how do they fit in the paradigm of business communications and collaboration solutions?
What is the market potential for hosted IP telephony and UCC services in terms of users and revenue?
What factors are driving and restraining market growth?
Who are the key market participants and how are they positioned for growth and success?
Which are the types of licenses that are most adopted within this segment?
Which are the key characteristics of the enterprises that have adopted hosted IP telephony and UCC services?

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