LATAM to record tenfold growth in hosted UC by 2020: Frost

Hosted telephony and integrated unified communications and collaboration (UCC) applications market in Latin America (LATAM) is set to experience a tenfold growth by 2020, says a new report from Frost & Sullivan.

The market registered revenues of $80.7 million in 2013 and estimates this to reach $839.4 million in 2020.

Mexico currently shows the most mature competitive environment in the region, while very strong growth is expected for Colombia and Brazil in 2014. The most attractive market segments in terms of demand are and will remain mobile client, video conferencing and IP telephony.

The market remains prospective as some vendors in the region have not yet launched full-fledged hosted communications portfolio. A large number of these platforms are anticipated to be available in the next 12 to 18 months, according to Frost.

hosted-UCThe tough competition in the market will also cause the price to drop. This will reduce market participants’ profitability but drive adoption rates, the research agency said.

The market is driven by the increased awareness among the customers that hosted model and operational-expenditure (OPEX) modality enhance flexibility, enable easy scalability and expansion.

Hosted IP telephony and integrated UCC application vendors need to promote these advantages to customers and forge stronger channel partnerships to thrive in the Latin American market, Frost said.

“As almost no initial investment is required to deploy hosted, pay-as-you-go communications solutions, barriers to adoption among small and medium businesses are low,” said analyst Sebastian Menutti. “Thus, hosted IP telephony and integrated UCC applications will gain traction in this segment, in addition to the large distributed enterprise and government segments.”

The longer-than-average renewal period of communications infrastructure in Latin America is also checking the pace of market development. Additionally, concerns on the security of hosted communications solutions among some end users hinder sales.

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