Latin American Telecom Services Industry Adopts New Business Models to Spark Digital Transformation

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The Latin American telecom services industry will see new business models as participants strive to be part of the on-going global digital transformation in the space. New business models are emerging as big data for telcos, mobility and mobile money, innovation-enabled monetization, software-defined networking  and network functions virtualization (SDN/NFV), e-commerce and online marketplaces, augmented reality (AR), carrier Ethernet over wide-area network (WAN), and Internet of Things (IoT) gain ground in the region. Telcos’ structure must become more agile, flexible, and able to leverage an interconnected ecosystem to adapt. 

“Changing market dynamics compel telcos to become customer-centric, investing in new products and services, aiming to transform their cost base, and simplifying as well as digitalizing complex business models, processes and systems,” commented Digital Transformation Research Manager Ignacio Perrone. “Going forward, they must also be part of an ecosystem of partners or lose relevance.” 

Latin American Telecom Services Industry Outlook, 2017, new research from Frost & Sullivan’s Communication Services Growth Partnership Service, unveils key trends in the Latin America data communications, broadband and mobility markets for 2017, and how companies can prepare to take full advantage of them. 

Key investment areas in the Latin American telecom market include big data, mobile money to leverage the large unbanked population, and mobile data and mobile enterprise applications, which will replace mobile voice as growth drivers and compel mobile carriers to enter new partnerships. 

Evolving business models will have to meet the demands of different end users and diversify telco revenue streams by verticals. Some of the upcoming changes will include: 

• Increasing deployment of Ethernet over WAN to enable enterprise IT transformation by reducing costs and complexity
• Use of SDN and NFV technologies to achieve the agility and simplicity required to make enterprise WANs dynamic; SDN/NFV enable enterprise WAN to handle video traffic efficiently
• More eCommerce supported by mobile apps, platforms, and big data and analytics that will enhance opportunities for marketplace deliveries and solutions
• Increasing integration of AR in mobile applications and mCommerce
• Operator-driven IoT business models, where major telecom participants take the lead in driving IoT by providing connectivity

“Communications service providers need to embrace digital transformation and reach out to capitalize on the opportunities derived from new technologies, such as big data and AR. The risk of not doing so is to become a sole provider of connectivity, and thus being commoditized,” said Perrone. “Companies like TIM, Telefónica and Oi are moving fast to transform themselves, and competitors should look at these examples and find their own way to make technology work to their advantage.” 

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