By Dan Berthiaume

If you are a BPO professional and have had a sneaking suspicion in the past five to 10 years that contracts are getting more complex, it’s more than a hunch. For reasons including the growing importance of IT to the BPO equation, increased sophistication of BPO buyers, and the evolution of BPO beyond a means of lowering transactional labor costs, BPO contracts are growing more and more complicated.

To find out more details about the situation regarding complexity of BPO contracts, Nearshore Americas recently spoke with two BPO contract experts: Marc Tanowitz, principal at outsourcing advisory firm Pace Harmon, and Stan Lepeak, director of global research, management consulting at KPMG. Tanowitz and Lepeak discussed exactly why and how BPO contracts have become more complex, the effect this increased contractual complexity is having on the BPO industry, and how vendors and buyers can collaborate to reduce contractual complexity while preserving the integrity of BPO projects.

BPO Grows Up

The most basic contributor to the complexity of BPO contracts is the simple fact that as BPO matures, users want to do more with it. “Five to seven years ago, BPO was focused on labor arbitrage,” says Tanowitz. “It was about finding resources in low-cost locations to do what they were told.” Tanowitz says this earlier iteration of BPO mostly dealt with broad transactional work such as accounts payable (AP) and general ledger.

However, according to Lepeak, more recently BPO has become a vehicle for delivering more sophisticated services. “There is now a more broad scope,” he says. “Multiple processes are pulled together and there is an offshore element.”

Technology Creeps In

Another major factor Tanowitz and Lepeak both cite was the growing importance of IT to outsourcing, even to BPO projects that don’t primarily focus on outsourcing technology systems. The increasing role of IT in BPO is also a reflection of outsourcing’s growing scope and sophistication.

“Now you often find IT bundled with business processes,” says Lepeak. “Companies also outsource the infrastructure supporting processes.”

Tanowitz’s commentary echoes that of Lepeak. “The BPO market shifted from labor deals to deals with a large IT component,” he says. “Providers deliver analytical support for discrete business processes, such as a collection tool.”

BPO Buyers Want More

Tanowitz and Lepeak both also refer to a maturing of BPO buyers along with a maturing of the BPO market. “BPO contracts were originally fairly simple, some were even written on vendors’ contract paper,” says Tanowitz. As a result, contracts were heavily skewed in favor of vendors, providing them with protections while not giving buyers the same level of protection or options for adding services or changing scale as their needs changed through the life of the contract.

However, Tanowitz said that eventually BPO buyers became more savvy and started demanding service level agreements (SLAs), price benchmarks, and other considerations which better protected them in the event of changes in project scope, currency value or vendor performance, but also greatly added to contract complexity.

Lepeak says buyers actually became “unrealistic” in their demands. “For example, BPO buyers wanted big cost savings, but no offshoring,” he explains. “Or they wanted to put in an ERP system but not change their processes.”

Lepeak vendors who did not have experience in delivering these types of sophisticated BPO services agreed to unrealistic contracts, “Which is why most of the big BPO deals of six to seven years ago were flops.”

Finding a Contractual Balance

Tanowitz and Lepeak both agree that the worst days of BPO projects being held up or resulting in vendor-buyer disputes due to contractual complexity are over, but the industry can still do much more to relieve complexity without damaging the quality of service delivery. Lepeak says buyers need to find a balance between pushing too hard and settling for too little, while having realistic expectations of BPO innovation.

“In reality, it is difficult to create a contractual arrangement that guarantees innovation,” he says. “Innovation comes from taking risks and doing things outside the box, which are hard to put in a contract.”

Instead, Lepeak says buyers should understand that lawyers and risk managers representing both parties in a BPO contract will likely nix anything that seems too risky, and accept the fact that well-written BPO contracts “offer less innovation but fewer failed deals.”

Tanowitz offers what at first sounds like a counterintuitive strategy of making contracts more complex upfront to provide more flexibility later in the life of the contract. “Do it right, do it once,” he says. “Deals change. Service levels may need to increase or be relaxed. Put in the mechanisms upfront to enable changes (without having to renegotiate the entire contract).”

By Luke Bujarski

 Mexico’s telecoms sector has gained a bad reputation for under investment, poor quality and high costs. Fixed line and mobile telephony rates are among the most expensive across the OECD and bandwidth is subpar compared to download speeds in other LATAM markets.  While government initiatives poised to foster competition continue to hit roadblocks, America Movil is feeling the heat and things are slowly changing.  New carriers like Nextel are building stronger brand loyalty especially within the enterprise market.  Pressure from the Federal Competition Commission has also pushed telecoms czar Carlos Slim to pledge greater investment in ICT infrastructure and more fair pricing strategies.  We spoke with Ernesto Piedras the CEO of CIU – a Mexico-based telecommunications industry consulting firm to give us a breakout of the current landscape and how things might play out over the next two-three years.

 NSAM:  Can you give us an overview of Mexico’s current telecoms landscape?

Piedras:  Mexico is a very dynamic market especially in the mobile sector where we have 98.7 million open lines and see 10 percent annual growth.  Last year’s revenues for mobile services were 17.7 billion dollars – out of 35 billion for the entire sector including fixed lines and internet.  Seventy percent of the mobile market is held by Telcel.  Movistar controls 35 percent and Nextel holds 3.9 percent of total lines. Nextel is a growing competitor as it has become the image of good service particularly with the business community.  Nextel actually accounts for 12 percent of total mobility revenues. Virgin Mobile America is also set to enter the market this year.

NSAM:  What about fixed lines?

Piedras:  The fixed line segment is 19.5 million lines which is very little under any standards considering the country’s large population.  What’s interesting is that traditional fixed line players including Telmex are losing customers to the cable companies that offer bundled phone services to their 11 million paid TV subscribers.  Cost for a dedicated fixed line tends to be high and doesn’t make much sense to consumers that have mobile phone options, but people are willing to pay for premium television which also offers telephone services.

 NSAM:  How does quality and bandwidth in Mexico measure up?

Piedras:  Mexico is 2.5G as a whole with major cities well covered, but rural areas and small towns have virtually no service.  Until recently infrastructure investments have focused on coverage expansion and not so much on increasing bandwidth.  Telcel recently announced a very important investment for 3G services and Nextel will be launching 3G as well.  When you talk about broadband internet you also have to distinguish between what is considered broadband in the world and what is broadband in Mexico.  The OECD says that you cannot call it ‘broadband’ unless download speeds are at least 2megs per second.  In Mexico download speeds are much lower.  When I travel it’s always a shock to come back to Mexico compared to download speeds in places like London.   Essentially you are paying top dollar for minimal service.

NSAM:  Are Mexico’s telecoms costs as expensive as experts claim?

Piedras:  Mexico has the highest telecoms costs across the OECD.  Also remember that Mexico has a relatively low GDP/capita compared to other OECD countries [10 thousand USD] so mobile services are very expensive for the Mexican consumer.   Out of 98 million lines only 16 percent are contract while 84 percent is prepaid services.  However, the smart phone market is growing rapidly and people are willing to pay top dollar for the latest technology.

NSAM:  Will government be able to bring additional competition into the market?   

Piedras:  Overall I am optimistic about the future and what’s coming in terms of competition and alternatives for customers.  In the past we had absolute regulatory capture with government authorities controlled by the main telecoms companies.  In the current administration there has been more independence of the regulators but government still lacks ‘teeth’ when it comes to antitrust regulation.  Last week’s decision to drop the $1 billion dollar fine against America Movil for unfair pricing practices demonstrates the limited power of the Federal Competition Commission, the main regulatory body in Mexico.  Lack of competition is also negatively impacting infrastructure investments.  Although the main companies [America Movil & Movistar] comprise 90 percent of the market, they only invest about 40 percent of total investment.  Every year they come out with generous announcements but when you look at actual investments they don’t commit.

Beverly Burke, Director, Information and Promotion at BELTRAIDE, talks about how Belize is making a name for itself in the Nearshore.

By Dan Berthiaume

When selecting a location for BPO service delivery, there are some standard metrics most BPO buyers use to determine the best location. However, “standard” does not always mean “right.” Just as in so many other areas of business, sometimes the common wisdom in the BPO realm is outdated, distorted or just plain wrong. Following is a brief review – compiled from several different expert sources- of some popular myths:

1. Rankings are helpful to understand relative attractiveness of locations. 
Despite heavy reliance on various “official” rankings of BPO locations, it is prudent to digest these reports with a heavy grain of salt.  Factors such as an incrasingly large number of competing rankings, a lack of correlation between rankings and actual end outcomes, score differences that are not meaningful enough to denote relative attractiveness, and the inability of generic rankings to take company-specific considerations into account limit the usefulness of rankings.

Furthermore – as long-time followers of Nearshore Americas can recall – there are firms pretending to do analysis of markets, but when confronted to produce evidence of their findings, they are nowhere to be found. The classic example of this is the 2009 “Black Book” of Outsourcing’s unfair attack on Bogota, performed by the owners of “Black Book” which was later acquired by DataMonitor/ Ovum. The ‘authors’ never engaged with us when we requested they provide evidence of Bogota being the ‘riskiest place on earth’ to do outsourcing. (Ovum CEO’s actually wrote a letter to us about this topic – published here.)

2. Size = scalability.
While the “size of an overall talent pool is often assumed to indicate scalability,  in reality, scalability is driven by multiple factors including quality of talent, competition, and companies’ unique requirements. The size of what appears to be an available talent pool  can be significantly reduced by issues such as lack of quality of quality and propensity and competition, resulting in a much smaller net talent pool. In addition, Everest Group – among others – cautions that statistics on available talent pools of qualified college graduates can often be misleading, and that local college graduates are not always part of the available talent pool.

3. Wage increase directly leads to an increase in overall people costs.
Using the typical wages paid to ITO workers in India during the past few years as an example, Everest Group demonstrates that although wage inflation of 10-12% for senior programmers and 12-15% for junior programmers has often been reported, in actuality wages for these employees have actually risen 3-8%, with a net 4-6% impact on overall people costs. Everest Group attributes the disparity to lower levels of total inflation in salary bands than individual changes due to promotions and growth, as well as cost controls allowed by high rates of attrition among junior programmers.

Everest Group says high-cost locations can supplement a BPO portfolio by fulfilling unique needs, such as niche skills, customer proximity, and time zone overlap

4. Locations experiencing tight labor conditions are always unattractive.
Large cities in popular BPO locations often experience labor pool tightness due to competition for workers. However, Everest Group advises that BPO buyers can often supplement a “tight” labor pool in an urban BPO location with workers from adjoining areas, as well as the possible “additional” talent pool represented by employable high school graduates, part-time workers, and experienced professionals with similar skills from other industries. BPO buyers will need to implement the proper hiring and training models to implement and scale hiring of workers from the additional talent pool.

5. High-cost and low-cost locations are in competition with each other.
BPO buyers often assume they must select either a low-cost or a high-cost location, with an obvious bias toward the cheaper destination. In actuality, Everest Group says high-cost locations can supplement a BPO portfolio by fulfilling unique needs, such as niche skills, customer proximity, and time zone overlap. BPO buyers should also assess delivery risks, including stability and predictability and business continuity, as well as consider direct financial metrics such as labor arbitrage, operational costs and taxes and incentives.

(Editorial note: Much of our research for this report resulted from a webinar, the “5 Common Myths of Location Selection,” produced by Everest Group).

Peru, Puerto Rico, Brazil, and Colombia drive forward with big projects

By Clayton Browne

Latin America has long been considered a laggard in terms of global infrastructure development, but that perception should be changing. Countries such as Brazil, Mexico, Chile, and Peru, as well as Puerto Rico in the Caribbean, have all begun major long-term infrastructure projects ranging from roads to dams to telecommunications towers to airports. Infrastructure development in the areas of energy, transportation and telecommunications have seen the greatest recent growth, with estimates ranging as high as $450 billion, to be spent on infrastructure in the area between 2011 and 2015.

Up until 2009, Latin American infrastructure spending was on a rapid growth track and there were dozens of major projects planned in almost every country in the hemisphere. The global recession has put a little damper on the pace of the growth, and a number of projects have been delayed or revised, but overall the impact of the recession on infrastructure expenditures does not seem to have been as bad as feared. Several countries such as Brazil and Chile have just announced new projects and updated schedules for planned and ongoing projects in 2012 and beyond.

Public Sector vs Public-Private Initiatives

Large-scale private-public partnerships for infrastructure development have been rare in Latin America until relatively recently due to a combination of cultural and business factors. There is a deep suspicion of private involvement in large public infrastructure projects in many places in Central and South America due to the fact that graft and misappropriation of public funds has been endemic in many such projects in the past. And in some countries such as Venezuela, there is outright hostility toward private enterprises being involved at almost any level in government projects.

The other side of the coin is that historically many public sector infrastructure projects in Latin American countries have also been inefficient graft-plagued projects where a few politicians or their friends and family greatly enriched themselves at the public expense.

But all of this is changing as the 21st century gets under way, and many countries like Brazil, Chile, and Peru, as well as the US territory Puerto Rico, have crafted innovative new regulations to encourage public-private partnerships (PPPs) for infrastructural development. A few have even created quasi-governmental agencies to encourage PPPs, such as the Puerto Rico Public-Private Partnerships Authority.

That said, there are still a good number of ongoing and planned Latin American infrastructure projects such as airports that are deemed to be of sovereign interest, and are being developed solely with public funds.

Energy Infrastructure Supplanting Telecom

The development of telecommunications infrastructure has been a high priority throughout Latin America since the late 1990s, and there were more projects and more money spent on telecommunications infrastructure in Lain American countries than any other category for almost a decade. The trend continued until 2009, when investment in telecommunications declined by 37% compared to 2008, and no major new projects were undertaken.

The energy sector has seen rapid growth in the last few years in many Latin American nations, with energy infrastructure investment jumping by 127% with 43 new projects from 2008 to 2009. Brazil has been especially active in the energy sector since 2008 with two new hydroelectric plants and half a dozen major electrical transmission-related projects.

Major Projects in Selected Countries

Brazil

Brazil was one of the leading per capita infrastructure dollars to GDP spenders in the world in the 1970s and early 80s, but infrastructure expenditures dropped off significantly for the next decade or so after that. But Brazil has recently kicked off a massive campaign of new infrastructure projects of all types, dubbed the Growth Acceleration Plan. Many of these projects are being developed through the Brazilian National Development bank (BNDES), and BNDES estimates that Brazil will spend a minimum of $145 billion in the three-year period from 2010-2012. While the fact that Brazil is becoming the largest economic engine in Latin America is clearly behind most of the current surge in infrastructural development, a good bit of it is certainly related to the fact that Brazil is hosting the 2014 World Cup and the 2016 Summer Olympics.

Ongoing/Near-Future Infrastructure Projects

• Recently completed a three-year, $30 billion roads and highways improvement project.

• Almost 50 stadium, road, airport and train-related infrastructure projects slated to be finished on time for the 2014 World Cup.

• A high-speed train linking Rio de Janeiro and São Paolo due to be completed by the 2016 Olympics.

Colombia

Colombia has taken great strides in both sociopolitical and infrastructural development in the last decade or so, but it was very much needed and a great deal that remains to be done. Colombia’s current National Development Plan estimates spending $17 billion between 2010-2014 to develop the highway and railroad system, with up to half of the money coming from private funds.

Ongoing/Near-Future Infrastructure Projects

• Nearing completion of the multi-year, three-phase Ruta del Sol, a major highway project designed to connect the interior of Colombia with the Pacific Coast.

• The Central Railroad System, a project linking the two regional hub cities of Honda and Chiriguana, is under construction.

• Development of a new program to encourage the investment of private capital in infrastructure investment projects that helps link up the various parties involved, including the headquarters of the Superintendent Notary and Registrar.

Peru

Peru began a major infrastructural development push in the late 90s and continues to make steady improvements in infrastructure in the first decade of the 21st century. In Fact, the 2010 Infrascope, an index created the Economic Intelligence Unit (EIU) ranking countries by political, legal and economic policies encouraging infrastructural development, ranks Peru as the third best country in all of Latin America (behind Chile and Brazil).

Ongoing/Near-Future Infrastructure Projects

• Peru currently has over $8 billion in public infrastructure projects planned or in construction

• Several regional projects to develop areas selected in coordination with the petrochemical industry

• Long-term plan to develop the island of San Lorenzo, located 4 km off of the coast of Lima, into a “satellite city on the sea, with special areas for production or recreation with the latest technologies.”

Puerto Rico

The last couple of decades of the 20th century saw Puerto Rico make great strides to catching up to most of the rest of the U.S. in terms of public infrastructure in terms of electricity productions, roads, hospitals and so forth. However, the school system and low-income housing lagged behind and were the most pressing infrastructural needs of the island nation. Fortunately, the American Reinvestment and Recovery Act of 2009 provided a $7.2 billion stimulus funding to Puerto Rico.

According to José Basora, the Executive Director of the Puerto Rico Infrastructure Financing Authority, “The government decided to put most of the stimulus money to work in a variety of new infrastructure-related projects, and to date we have spent over 88% of the funds allotted.”

Ongoing/Near-Future Infrastructure Projects

• The Schools for the 21st Century Program has built or remodeled 103 schools throughout Puerto Rico for a total cost of $756 million. This program has improved the education facilities of over 45,000 students and 3500 teachers.

• Ongoing public and public-private weatherization and energy conservation programs that have resulted in major home or building energy-efficiency upgrades for over 15,000 homes of senior citizens and low-income families as well as 600 government and private buildings.

• PPP projects developed through the Puerto Rico Public-Private Partnerships Authority include a recent $120 million education and training initiative to which Intel contributed $12 million as seed money.

Source: TMCnet.com

France Telecom’s subsidiary Orange is gearing up to upgrade its telecom network across the Latin America as part of its plans to expand its supplementary services such as high-speed broadband, MPLS, international Ethernet link and telepresence.

The upgrading is likely to increase its network capacity by ten times meeting the needs of its multinational enterprise customers in the region.

The decision to upgrade the network comes after the carrier unveiled its plans to generate $1.4 billion in emerging markets in 2015.

The drive to increase network capacity will begin in October 2011 and may cover many countries including Brazil, Chile, Argentina, Peru and Panama, the operator stated in a press release.

The network upgrading program aims to connect Latin America to the East Coast of the United States via Brazil and to the West Coast of the United States via Chile. The upgrade will enhance quality of service for customers with improved latency to the West Coast, while also supporting the growing capacity requirements from Asia-Pacific.

Orange (News – Alert) Business Services has 122 points of presence across 31 countries in Latin America. With more than 650 employees and a major service center Orange serves more than 400 customers in the region.

“We continue to see increased global expansion not only by our multinational customers looking to grow in Latin America,” said Mauro Cruzeiro, vice president of Latin America for Orange Business Services (News – Alert). ”We also see more and more Latin American enterprises expanding within the region and beyond.”

Source: America Economia

SANTIAGO — 2010 was the year Chile moved into telecommunications. The GTD Group acquired 96.4% of Telefónica del Sur, $115 million; in August the channel Chilevisión (until then controlled by President Sebastián Piñera) was sold to international group Turner Broadcasting System (TBS) for $150 million. Shortly before the Roman Catholic Church had sold part of its property in Canal 13 (67%) for $55 million to the Luksic family. And Group Saieh (Corpbanca and Copesa) bought 20% of VTR for $300 million.

The two main players in mobile telephony, Entel and Movistar, renewed their brands, while the operator of paid TV and Internet VTR and Nextel France prepare to enter to compete in the area. The adoption of the law on number portability in 2010 and its imminent entry into operation at the end of this year is making the Chilean ITC scene more competitive than in previous years.

Companies are preparing for a scenario in which they seek to capture clients with the quadruple play: Mobile, fixed telephony, TV, and the Internet as a single service and under a single account. “The trend in Chile is more advanced than in other countries of the region,” said Sergio Rodriguez, analyst of telecommunications at Fitch Ratings in Mexico City. “But it is the same: convergence of services by means of packaging.”

“And for operators of fixed telephony, this is a way to strengthen the loyalty of customers to the company and control disconnection rates,” said Rodriguez.

To this end Movistar intends to invest $700 million — part of a larger plan of US$ 2.5 billion — basically in fiber optic networks this year. And according to government estimates, in the coming years there will be investments of about US$7 billion in the sector. “Investments for the coming years will focus on fiber optic to the home and investments in the mobile network to improve the performance of data (mobile broadband) services,” said Patricio Soto, analyst with consulting firm IDC in Latin America.

Mobile telephony has also had a boost with the entrance of increasingly powerful smartphones, which have lowered their costs and have enabled more people to have access to such devices.

“During 2010 and for the next two years the area that most contributed to the growth was mobile data, which includes mobile broadband, mobile Internet (navigation on the phone) and M2M subscriptions,” said Soto. “One of the main factors affecting this growth of the industry is the increase in subscriptions to mobile broadband.”

Chile was a leader in Latin America in terms of penetration of broadband and mobile phones, but in recent months has been moving at a pace slower than other countries. According to the Cisco Broadband Barometer, the country lost the leadership in the region in penetration of fixed broadband, with 10.8%, behind Uruguay (12.3%) and Argentina (11.7%). For Soto, the decline in the figures is misleading, since investments have focused on a second stage: “Leading the way for broadband access to lower socio-economic sectors and increase the speed,” she says.

Meanwhile, another battle is being fought in the field of paid TV, where operators like Movistar and Telmex seek to compete with the leader VTR, which has a powerful infrastructure of cabling and fiber optics. A competitive alternative might be to offer satellite connections.

Either way, the Chilean telecommunications industry appears to be in good health and competition is strong. The actors are consolidated and it is difficult for regulations to substantially change the scene, ICT experts say.

Source: Business Wire

NEW YORK — Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, today announced the results of its third annual Executive Outsourcing Survey, which explores the perceptions and use of social media within customer care operations defined as all aspects of customer interaction management within the enterprise.

The survey revealed that social media has become a critical tool for customer care across industries, as over half of senior executives (52 percent) indicated that social media is currently a part of their company’s customer care operations, and 57 percent indicated they are aware that their company is currently monitoring online conversations. Thirty-six percent of executives say their company currently measures the value of its social media program for customer care, which is surprising given how relatively new social media is as a method to enhance customer care operations.

The survey, commissioned by Capgemini and conducted online in February by Harris Interactive among 302 senior executives at Fortune 1000 companies, reinforces that social media as a tool for customer care is here to stay. Over half of executives (57 percent) view social media as a means for inviting customer input on product and services, lead generation, responding to complaints, internal reporting, and measuring customer satisfaction. Interestingly, more than one in ten executives (13 percent) still view social media monitoring as a fad that will not significantly affect their company’s success. Nevertheless, the overwhelming majority view social media as a critical part of a comprehensive customer care strategy.

Despite social media’s growing role in customer care, there is still uncertainty amongst executives in how best to leverage the increasing influence of social media to benefit their company. For example, the survey points to confusion within the organization around whose role it is to manage social media for customer care, and when and how they should be interacting with customers.

Most executives (73 percent) are unfamiliar with how many employees at their company are currently dedicated to “listening” to customer conversations on the internet, and most executives whose company is using social media activities with respect to customer care (64 percent) rely solely on their marketing department for social media monitoring. Furthermore, less than half of executives (41 percent) in companies monitoring online conversations about its brand, product and/or services only respond to an online conversation when a customer poses a direct question, representing a significant missed opportunity for companies to proactively solicit feedback and enhance the customer experience.

Given the lack of recognized best practices amongst companies today, many organizations look to partner with a skilled third party who can respond in real-time to social media interactions and can tie customer sentiment and trends to an effective business strategy. However, the survey indicated that many companies are not yet taking advantage of third party experts—almost half, or 48 percent of companies using social media as a component of their company’s customer care operations or strategy do not currently outsource their customer care operations to third-party providers.

“The use of social media as part of a strategic customer operations strategy is still emerging, but it presents companies with a clear opportunity to engage with current customers, find new ones and build brand awareness in an increasingly competitive landscape,” said David Poole, Vice President and Head of Americas Business Process Outsourcing, Capgemini. “We’re dedicated to helping companies understand these opportunities through research and the delivery of service offerings that help our customers effectively operate in this new medium.”

About the Survey

Harris Interactive conducted the survey online within the United States between February 8 and 21, 2011 among a total of 302 Fortune 1000 Executives. Company revenue and number of employees were weighted where necessary to bring them into line with their actual proportions in the larger universe of Fortune 1000 companies.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words “margin of error” as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.

Respondents for this survey were selected from among those who have agreed to participate in surveys. Because the sample is based on those who agreed to be invited to participate, no estimates of theoretical sampling error can be calculated.

Source: Developing Telecoms

Latin America’s fastest broadband network is being launched by the Chilean market leader Entel. Based on HSPA Evolution technology from Ericsson, the network will allow peak data rates of 42Mbps.

Increasing use of smartphones and advanced mobile applications has caused a surge in data traffic across Entel’s network. The dual carrier HSPA tech increases network capacity, supporting new revenue streams for operators by enabling internet browsing via mobile.

The operator will provide commercial plans with a maximum speed of 22 Mbps, with download speeds averaging at 6 Mbps. Entel’s CEO Antonio Büchi described the DC-HSPA+ network as “the most advanced mobile broadband network in the country”.

Nicolas Brancoli, Vice President of Unit Pacific for Ericsson in Latin America, said: “[We have] delivered tremendous high-speed broadband services to the Chilean market. With the successful introduction of mobile broadband and smartphones on the market, network modernisation has become key for operators to continue offering the best experience to their customers while reducing total cost of ownership.”

Source: Ottawa Business Journal

One of Peru’s major wireless carriers is looking for partners in Ottawa’s telecom sector to support the rollout of the South American nation’s largest 3G networks. Representatives from Nextel Peru, the third-largest mobile operator in that country, were in Ottawa this month to meet with local firms and explore potential business relationships.

During the two-day visit, Nextel officials also toured facilities at DragonWave Inc., EION, TenXc, and the University of Ottawa. “We view these initiatives as good introductions to markets and new customers,” said Greg Friesen, vice-president of product development at DragonWave Inc. “(Nextel Peru) is a strong target of ours.”

Nextel Peru spent US$125 million upgrading to a 3G network, becoming the first subsidiary of U.S.-based NII Holdings to do so. Since its beginnings in the Peruvian market in 1998, Nextel’s two-way digital radio technology has made its product popular in corporate and government circles, giving the company a dominant position within this niche market.

“(Nextel Peru) has a very large subscriber base. They are well-known for their push-to-talk technology, and they’re rolling out huge expansions in their 3G wireless network within Peru. They look like a company on the rise in many ways,” said Nabil Seddigh, president of Ottawa-based Solana Networks.

DragonWave Inc. and Solana Networks were two of 16 businesses that had a 20-minute meeting with representatives from Nextel Peru.

Although they did not announce any specific plans for the future, Nextel Peru’s representatives indicated the Ottawa visit could lead to the exploration of areas including 4G technology, wireless and RF front-end solutions, as well as e-learning for Nextel staff.

Nextel is also in the midst of capitalizing on the corporate mobile applications space, having subcontracted its hardware and network solutions to Huawei earlier this year.

The growing economy in Peru makes it a popular emerging market for Canadian companies to invest in. It is estimated that Canadian investment in Peru is valued at US$2.8 billion. During a time when many countries’ economies were contracting, Peru’s economy expanded by 1.1 per cent in 2009, and it’s estimated to increase by 6.9 per cent in 2011, according to Canada’s trade commission service in Peru.

Thanks to an estimated growth of 13 per cent between 2010 and 2014 in Peru’s ICT market, there are opportunities aplenty for Ottawa companies. Both the private and government sectors have played an equal role in the growth of the market.

According to Canada’s trade commission service in Peru, many niche markets have developed within the private sector, including education, geomatics, and health care. The government sector is spurring growth with public-private partnerships.

Opportunities exist as the Peruvian government expands and improves infrastructure and technology for prisons, airports, hospitals, as well as the country’s air force. The government has also initiated FITEL, a series of rural broadband projects intended to bring broadband connectivity to 4,000 communities in Peru.

Mr. Seddigh said that network expansion makes Peru a sustainable market.

“The market in Peru is a good one … with a very strong penetration in wireless. All of these wireless networks will be expanding from 2G to 3G and 4G, providing more and more data services. So the opportunity is a good one, and I think it is going to be sustained for quite a few years,” Mr. Seddigh said.

Technological compatibility is also what is drawing some to South America; a company can roll out a product line in one country, and then reintroduce it in several different South American markets.

“We recognize that we don’t have to do any technological advancements … to go into a lot of these countries. So the cost of entry from an internal perspective is a lot less than if we went into the Asian market or European market,” said Paul Stevens, vice-president of business development for Kavveri Technologies Inc.

With the first introductions complete, the government of Ontario’s ministry for economic development and trade is planning an ICT mission to Lima in September, which will allow Ottawa companies to further explore investment and business opportunities in Peru. – By Greg Markey