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Cloud IP telephony & UC&C services market in Latin America & The Caribbean

The Market Size of the CALA Cloud IP Telephony and UC&C Services Market is estimated to be worth USD 2.4 Billion in 2018 and is expected to grow at a CAGR of 23.2% to reach a Market size of USD 6.81 Billion in 2023.

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Definition / Scope

Cloud IP telephony (IP Centrex and hosted IP PBX) services refer to network-based voice services where all call control, voice switching, PBX functionality and network infrastructure related to service provisioning are owned, maintained and managed by a cloud service provider. Cloud IP telephony services are usually delivered over an IP connection and terminate at an IP endpoint. Mobile hosted IP PBX users are an exception, as the service can be delivered over the cellular network and terminated on to a mobile device.

A hosted UCC solution involves the delivery of pre-integrated network-based applications. The benefits of hosted UCC solutions are based on the vision of having ultimate flexibility in accessing communications and collaboration capabilities anywhere, anytime, on any device, and on any network.

The Cloud IP telephony and Unified Communications and Collaboration (UC&C) services is witnessing rapid growth trajectory in Latin America and the Caribbean (CALA) as Businesses are increasingly gaining consciousness about the benefits of this technology. Several Service Providers have entered the market in the last 18 months thereby increasing competitive pressure in the market. The market is expected to post continual growth as SPs and VARs develop new offerings in most countries in the region and as some new projects are getting implemented in the region.

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Market Overview

  • USD 2.4 Billion – The estimated market size of the CALA Unified Communications and Collaboration market in 2018
  • 23.2% - The CAGR growth rate of the CALA Unified Communications and Collaboration market in the forecast period 2018 to 2023
  • USD 6.81 Billion – The expected market size of the CALA Unified Communications and Collaboration market in 2023
  • USD 1.34 Billion – The estimated market size of the CALA Cloud IP Telephony market in 2018
  • 23.3% - The CAGR growth rate of the CALA Cloud IP Telephony market in the forecast period 2018 to 2023
  • USD 3.82 Billion – The expected market size of the CALA Cloud IP Telephony market in 2023
  • USD 894 Million – The estimated market size of the CALA Enterprise collaboration application market revenue in 2018
  • 25.9% - The CAGR growth rate of the CALA Enterprise collaboration application market from 2018 to 2023
  • USD 2.83 Billion – The expected market size of the CALA Enterprise Collaboration application market revenue in 2023.
  • USD 167 Million – The estimated market size of the CALA contact center market revenue in 2018
  • 22.2% - The CAGR growth rate of the CALA contact center market from 2018 to 2023
  • USD 455.06 Million – The expected market size of the CALA contact center market revenue in 2023
  • IT & Telecom sector leads the CALA Cloud IP Telephony and Uc&C Services Market by industrial vertical in 2018
  • Mobility Segment serves as the lucarative segment by Application in 2018 and is expected to grow further in the forecast period (2018 to 2023)
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Key Metrics

Metrics Value Explanation
Base Year 2018 Researched through internet


Market Risks

Dated telecom Infrastructure

Insufficient Internet infrastructure is clearly a major difficulty in the technology adoption process in CALA. Internet speed in some places is still slow and Internet coverage remains very limited only to major urban areas. Moreover, in rural areas, Internet connection is still considered costly and can only be afforded by a small fraction of the population. This unfavourable condition has affected Service Providers in remote areas who have limited internet access in conducting business This is worsened by the fact that during peak hours, Internet connection becomes even more sluggish and less reliable. As a result, business processes that rely heavily on smooth Internet connection are affected. High-speed connection Internet is still considered expensive and a luxury. due to this unreliable Internet connection, frequent connection breakdown is inevitable, causing critical functions within organisations to stand still when the Internet is down, leading to an extensive amount of loss reflected in number of sales.

Rapid consolidation of UC vendors

The consolidation of UC Vendors is happening rapidly as is evident with the mergers and acquisitions such as star2star merging with Blueface and polycom acquiring obihai technology and this is creating confusion and hesitation in the market. Customers with a previously defined UC strategy are waiting eagerly that their chosen product survive the rapidly occurring mergers and acquisitions. As the market is getting rapidly consolidated there exists threat for new entrants and offers minimal impetus for their growth.

Top Market Opportunities

Content-sharing Facility

As conferencing services have become basic communication tool within the enterprise environment. users are demanding a simple user experience and content-sharing facility(in case of web conferencing) with high definition audio and video quality and the capability to connect from multiple devices. These customer demands remain as an opportunity before OEMs and service providers to have customer acqusitions.

Cloud Services Model gaining traction

The hosted or cloud services model of unified communication has proved to be disruptive and a blessing for both the large enterprises and SMBs. The factors supporting the growth of the Cloud Service Model includes scalability, reduced TCO, minimal CAPEX and flexibility.

Freemium Model

Availability of feature-rich, inexpensive cloud collaboration solutions comprising team messaging as well as real-time communications functionality; providers must leverage options like a "freemium" model to attract businesses that are not yet ready to move their entire UCC to the cloud. Enterprise demand for custom-tailored solutions and communications

The need for integration with other business software to directly influence key business processes, and gain more tangible business benefits from communications investments. In response, technology developers and service providers are providing flexible application program interfaces (APIs), software development kits (SDKs), and communication PaaS (CPaaS) environments.

"API economy" wave

Service providers seeking to ride the "API economy" wave by enabling integration with popular third-party software, including productivity suites, customer relationship management (CRM), helpdesk, and vertical apps, in order to improve Unified Communications and Collaboration stickiness and customer satisfaction.

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Market Drivers

Proliferation of Smart Phones and BYOD Trend

The growth in sales of mobile phones has increased the adoption of unified communication among end users. According to “Ericsson Mobility Report” published in 2015, the number of smartphone users is expected to reach 6.1 billion by 2020. In addition, 90% of the population is supposed to have access to high-speed internet and 80% of the new smartphone users are expected to be from Europe. Further, another analysis from Statista states that Europe is expected to have around 1,242 million smartphones by 2020. Moreover, increased adoption for bring your own device (BYOD) among enterprise from all industry verticals is expected to drive the demand for unified communication during the period 2018 to 2023.

Increased Demand for Cloud Based Solutions

Rise in adoption of cloud-based technology along with usage of social media platforms drives the growth of the market. At present, cloud technology is adopted widely amongst all the businesses, which provide enterprises affordable communication solutions. Cloud computing allows the model to function from anywhere and anytime. In addition, the implementation of cloud enables organizations to combine supplementary infrastructure technologies such as software-defined perimeters to create robust and highly secure platforms. Hence, the rise in the adoption of the cloud-based solutions drives the growth of the Unified Communication Market.

Penetration of Internet of Things

The growth in demand for low cost data storage, backup, and data protection augments the growth of the IoT market among end users that include small and medium enterprises (SMEs) and large enterprises. Moreover, end user organizations shift toward cloud computing technologies and deployment of cloud-based IoT software and platform is on an increase. Further, according to 11th annual Visual Networking Index by Cisco the number of machine-to-machine connections is expected to reach 12.2 billion by 2020. Further, IoT is anticipated to account for nearly half of the connected devices by 2020. In addition, Cisco predicts the Internet of Everything market to be $19 trillion opportunity by 2024‐2025.

The “instant” factor and the reduction of turnaround time

Using Unified Communications a person in a remote location can contact another geographically separated person instantly through their preferred mode of communication be it Instant Messaging, Telephony or Video conferencing. And Unified Communication can significantly reduce downtime that’s implicit in any interaction. Consider this: according to an AT&T study, more than 70 percent of business calls are placed on hold for an average of 45 to 60 seconds each. The average executive spends 17 minutes each day on hold, and some 80 percent of phone calls end up in voice mail. UC curbs the wastage of time by letting users reach the right person at the right time through their preferred mode of contact. This goes way beyond slashing hold times or staying clear of voice mail. It means organising information faster and getting that information to the right person in a usable format when the recipient needs it most.

The Consumerization of IT

Due to the consumerization of IT, Unified Communication is gaining popularity in the consumer market then spreading to business and government organizations largely driven by employees are using Unified Communication technologies at home and then introducing them in the workplace.

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Market Restraints

Complexity in Implementing Unified Communication

The number one pain point involved in the implementation of Unified Communication is the complexity. The amount of technology and human interactions involved is typically 10 times greater than a normal phone conference. There is a need to understand the technology, hardware, software and configuration which includes the translation between proprietary protocols. More importantly there is a need to understand how users will utilize the solution, how the physical environment, and in many cases language, culture and time zones will affect the use case. The human factor is sadly very often overlooked or underestimated. Reliable support for the communication part of the setup is also important.

Lack of Tangible ROI

More Tangible ROI can be achieved only using “least-cost-routing” options that UC platforms enable for calls from mobile phones. The other options such as telephony or video-conferencing which usually comes with a higher price tag does hinder the tangible ROI.

Customer concerns over the reliability and security of cloud communications

Security and reliability of cloud computing services remain among the dominant concerns inhibiting their pervasive adaptation. The distributed and the multi-tenancy nature of the cloud computing paradigm can be considered as the root causes for their increased risks and vulnerabilities. Resource sharing and virtualization can also be mentioned as additional main factors contributing to or augmenting cross-site scripting and other cloud vulnerabilities. Cloud are also exposed to the risks and liabilities faced by other networked systems. Poorly designed APIs that may cause security problems or distributed denial of services attacks are the examples of this category

Industry Challenges

Minimal Data Center Security

The vendors that offer Unified Communications and Collaboration must have their own data-center facilities. They must secure their customers with services such as secured entry, 24/7 staffing and remote backups for disaster recovery. Not all vendors offer strictly controlled data center facilities with multiple power sources and remote backups. Some vendors choose to cut-costs by compromising the quality and thereby creating business risks. This may cause serious business losses with issues occurring for business continuity if they experience equipment failure or natural disaster. In other cases Unified Communications and Collaboration vendors are simply reselling services that are hosted in a third-party data center, which may or may not offer adequate security.

Poor Response to Demand

Enterprises encounter fluctuations in voice call volume and demand for data services. The business can encounter massive spike in inbound customer service calls anytime now that require hiring temporary customer service representative. Regardless of whether the same demand is encountered the Unified Communications and Collaboration provider must scale to meet demands is important. The best way to find that the vendor can scale to the needs is by inquiring the vendor whether they possess their own instance of the Unified Communications and Collaboration platform that they use. Vendor with their own instance of Broadsoft, MetaSwitch, ShoreTel are better in providing scalable solutions on demand.

Inadequate Data Encryption

In treating voice calls as a form of data there is security and cost-savings advantages., especially with fiber-optic internet connectivity. All of the organizations data that comes from the Unified Communications and Collaboration vendor must be encrypted. It must be ensured that the encryption must be performed in-transit and when data is at rest.

Public Internet Connectivity

Many Unified Communications and Collaboration Service Providers promise that they offer all the services but they miss out on one of the key services, data connectivity. To unlock the benefits of Unified Communications and Collaboration a Service Provider who offers CloudConnect via a dedicated circuit is crucial.

Technology Trends

5G will start to enter the mainstream

5G is represents the fifth generation of mobile communication. It aims on providing ultra-fast mobile internet connection with reduced costs. After extensive testing and development throughout 2018 the 5G technology is coming to the forefront in 2019 and with commercial deployment being launched with specifications being released in March 2019. Mobile data continues to be prohibitively costly for many applications although prices have been falling steadily. As 5G is entering into the mainstream, the quality of network connection is improving in Unified Communication and Collaboration and improves the overall Quality of Service (QoS) offered by the UC&C Services solutions.

BYOD and Mobility

The users no longer power up a corporate laptop to read a email, check status of an order via instant messaging or hold an important video conference with a key client. With more organizations embracing Bring Your Own Device (BYOD) programs the mobile employees are using mobile unified communications applications on their personally-owned devices to get their jobs done.

Other Key Market Trends

Adoption of UC as a Service (UCaaS) will increase

Until a few years ago, corporate communications revolved around landline telephony, email, and even the postal service. Larger corporations would invest in costly outdated technology to take advantage of automated attendants and call-monitoring. At the same time, there has long been a lack of integrated communications, leading to slower response times and stunted corporate growth. UCaaS Services is about outsourcing your communications infrastructure to the cloud. Instead of paying for expensive in-house hardware, you have your systems managed by a third party. Employees can also access their video and audio communications through any internet-connected device because everything is hosted in the cloud.

Market Size and Forecast

Brazil Cloud IP Telephony and UC&C Services Market Size

  • USD 888 Million – The estimated market size of the Brazil Unified Communications and Collaboration market in 2018
  • USD 495.8 Million – The estimated market size of the Brazil UC&C Services Telephony market in 2018
  • USD 330.78 Million - The estimated market size of the Brazil UC&C Services collaboration application market revenue in 2018
  • USD 61.79 Million – The estimated market size of the Brazil UC&C Services Contact center market revenue in 2018

Mexico Cloud IP Telephony and UC&C Services Market Size

  • USD 768 Million - The estimated market size of the Mexico Unified Communications and Collaboration market in 2018
  • USD 426.4 Million – The estimated market size of the Mexico UC&C Services Telephony market in 2018
  • USD 284.47 Million - The estimated market size of the Mexico UC&C Services collaboration application market revenue in 2018
  • USD 53.13 Million – The estimated market size of the Mexico UC&C Services Contact center market revenue in 2018

Argentina Cloud IP Telephony and UC&C Services Market Size

  • USD 460.8 Million - The estimated market size of the Argentina Unified Communications and Collaboration market in 2018
  • USD 255.84 Million – The estimated market size of the Argentina UC&C Services Telephony market in 2018
  • USD 170.68 Million - The estimated market size of the Argentina UC&C Services collaboration application market revenue in 2018
  • USD 31.87 Million – The estimated market size of the Argentina UC&C Services Contact center market revenue in 2018

Cuba Cloud IP Telephony and UC&C Services Market Size

  • USD 276.48 Million - The estimated market size of the Argentina Unified Communications and Collaboration market in 2018
  • USD 153.5 Million – The estimated market size of the Argentina UC&C Services Telephony market in 2018
  • USD 102.4 Million - The estimated market size of the Argentina UC&C Services collaboration application market revenue in 2018
  • USD 19.12 Million – The estimated market size of the Argentina UC&C Services Contact center market revenue in 2018
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Market Outlook

Brazil Cloud IP Telephony and UC&C Services Market Outlook

  • 23.4% - The CAGR growth rate of the Brazil Unified Communications and Collaboration market in the forecast period 2018 to 2023
  • USD 2.54 Billion – The expected market size of the Brazil Unified Communications and Collaboration market in 2023
  • 23.1% - The CAGR growth rate of the Brazil UC&C Services Telephony market in the forecast period 2018 to 2023
  • USD 1.4 Billion - The expected market size of the Brazil UC&C Services Telephony market in 2023
  • 26.2% - The CAGR growth rate of the Brazil UC&C Services collaboration application market from 2018 to 2023
  • USD 1.05 Billion - The expected market size of the Brazil UC&C Services Collaboration application market revenue in 2023
  • 22.2% - The CAGR growth rate of the Brazil UC&C Services Contact center application market from 2018 to 2023
  • USD 168.37 Million – The expected market size of the Brazil UC&C Services Contact center market revenue in 2023

Mexico Cloud IP Telephony and UC&C Services Market Outlook

  • 23.6% - The CAGR growth rate of the Mexican Unified Communications and Collaboration market in the forecast period 2018 to 2023
  • USD 2.17 Billion – The expected market size of the Mexican Unified Communications and Collaboration market in 2023
  • 23.6% - The CAGR growth rate of the Mexican UC&C Telephony market in the forecast period 2018 to 2023
  • USD 1.23 Billion - The expected market size of the Mexican UC&C Services Telephony market in 2023
  • 26.5% - The CAGR growth rate of the Mexican UC&C Services collaboration application market from 2018 to 2023
  • USD 921.49 Million - The expected market size of the Mexican UC&C Services Collaboration application market revenue in 2023
  • 22.4% - The CAGR growth rate of the Mexican UC&C Services Contact center application market from 2018 to 2023
  • USD 140.47 Million – The expected market size of the Mexican UC&C Services Contact center market revenue in 2023

Argentina Cloud IP Telephony and UC&C Services Market Outlook

  • 23.4% - The CAGR growth rate of the Argentinan Unified Communications and Collaboration market in the forecast period 2018 to 2023
  • USD 1.39 Billion – The expected market size of the Argentinan Unified Communications and Collaboration market in 2023
  • 23.5% - The CAGR growth rate of the Argentinan UC&C Services Telephony market in the forecast period 2018 to 2023
  • USD 738.01 Million - The expected market size of the Argentinan UC&C Services Telephony market in 2023
  • 26.7% - The CAGR growth rate of the Argentinan UC&C Services collaboration application market from 2018 to 2023
  • USD 555.27 Million - The expected market size of the Argentinan UC&C Services Collaboration application market revenue in 2023
  • 22.6% - The CAGR growth rate of the Argentinan UC&C Services Contact center application market from 2018 to 2023
  • USD 88.27 Million – The expected market size of the Argentinan UC&C Services Contact center market revenue in 2023

Cuba Cloud IP Telephony and UC&C Services Market Outlook

  • 23.8% - The CAGR growth rate of the Cuban Unified Communications and Collaboration market in the forecast period 2018 to 2023
  • USD 804.38 Million – The expected market size of the Cuban Unified Communications and Collaboration market in 2023
  • 23.7% - The CAGR growth rate of the Cuban UC&C Services Telephony market in the forecast period 2018 to 2023
  • USD 444.59 Million - The expected market size of the Cuban UC&C Services Telephony market in 2023
  • 26.4% - The CAGR growth rate of the Cuban UC&C Services collaboration application market from 2018 to 2023
  • USD 330.4 Million - The expected market size of the Cuban UC&C Services Collaboration application market revenue in 2023
  • 22.3% - The CAGR growth rate of the Cuban UC&C Services Contact center application market from 2018 to 2023
  • USD 52.31 Million – The expected market size of the Cuban UC&C Services Contact center market revenue in 2023
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Technology Roadmap

Security comes to the forefront

Just over one-third of organizations now have a proactive UCC security strategy that combines audits, mandated use of encryption, monitoring, penetration testing, patching, and firewalls or application gateways capable of recognizing UCC traffic and protecting against attacks. UCC business leaders, by and large, don't see threats of attack, denial of service or data exfiltration as high-priority concerns. Unfortunately, it may take a well-publicized attack before IT leaders give UCC security the attention it deserves.

Distribution Chain Analysis

The Deployment model adopted in the implementation of Unified Communication is plug and play where the applications are offered through VOIP Protocols such as Session Initiation Protocol (SIP) technologies which includes SIP trunk. The payment mode is fixed tariff for the services offered at a per-user basis.

Competitive Landscape

  • Players provide extensive UC solutions to offer consistent end-use experience. Lately, companies have been focused on providing cloud-based UC solutions owing to growing transition toward multi-model interaction with video, voice, and messaging. For instance, Cisco Systems Inc. provides Cisco Hosted Collaboration Solution (HCS) that helps enterprises deploy UC in their businesses.
  • Companies are engaging in collaborations and acquisitions to maintain their market presence. For instance, in April 2016, NEC Corporation and Hewlett Packard Enterprise entered into a collaboration to develop solutions jointly, thereby capturing new opportunities in key geographies. This alliance has enabled companies to quickly accelerate adoption of mobile-first networking to improve workplace productivity.
  • In January 2016, Microsoft Corporation acquired technology assets of Event Zero for UC commander solutions. This acquisition has allowed Microsoft Corporation to enhance and expand built-in management tools for Skype for Business.

Competitive Factors

Some of the Competitive Factors in the CALA Cloud IP Telephony and UC&C Services Market include:

Reliability and Availability Unified Communications is revolutionizing the way we communicate, it must be reliable in order to deliver the utmost in user productivity. If Unified communication is expected to play a major role in increasing user productivity it has to be reliable, dependable and consistent in its delivery. This is no easy task. When UC is down, productivity is down, and users and enterprise customers are dissatisfied. The unreliable delivery of UC services will damage the reputation of UC. It will be harder to regain the user's confidence to return to the UC functions than it was to convince the user to try UC in the first place. Technology vendors and providers often throw around the term five nines (99.999%) availability when discussing their products or services, and the unified communications (UC) market is no different. The term is used so often that the average technologist doesn't think twice about it. First of all, five nines does NOT refer to reliability. It refers to availability. Availability is the probability that a device or service will be working when you go to use it.Thus the Service Provider offering higher reliability and availability are set to dominate the market.

Scalability The Unified Communications Applications and Services requires to answer the rising demands during peak hours. Enterprises encounter fluctuations in voice call volume and demand for data services. The business can encounter massive spike in inbound customer service calls anytime now. Regardless of whether the same demand is encountered the UC provider must scale to meet demands is important. The Service Providers that offer scalable solutions are the front-runners in the Sector.

Lowest Total cost of Ownership

The Service Providers that focus on reduction of tangible costs and enable correct choice between long distance network vendors are set to rule the market.

Key Market Players

The Key Market Players in the CALA Cloud IP Telephony and UC&C Services Market includes:

Arkadin, Inc. provides communication solutions. The Company offers audio, web, and video conferencing, unified communication, instant messaging, telephone calling, and document collaboration. Arkadin serves customers worldwide.

BroadSoft, Inc. is a global provider of software that enables fixed-line, mobile, and cable services to deliver voice and multimedia services over their internet protocol-based and IP-based networks. The Company's software enables customers to provide enterprises and consumers with a range of cloud-based, hosted, and IP multimedia communications.

Verizon Communications Inc. is an American multinational telecommunicationsconglomerate and a corporate component of the Dow Jones Industrial Average. In 2015, Verizon expanded its business into content ownership by acquiring AOL, and two years later it acquired Yahoo! AOL and Yahoo were amalgamated into a new division named Oath Inc. (currently known as Verizon Media)

Vodafone Group plc is a British multinational telecommunications conglomerate, with headquarters in London and Newbury, Berkshire. It predominantly operates services in the regions of Asia, Africa, Europe, and Oceania. Among mobile operator groups globally, Vodafone ranked 4th (behind China Mobile, Bharti Airtel and Vodafone Idea) in the number of mobile customers (313 million) as of 2018

Strategic Conclusion

The market size of the CALA Cloud IP telephony and UC&C Services market is estimated to be USD 4.48 Billion in 2018 and is expected to record CAGR growth rate of 11.2% and is expected to reach a market size of USD 9.42 Billion in 2025. Whereas the market size of the CALA Cloud IP Telephony market is estimated to be USD 2.50 Billion in 2018 and is expected to grow rapidly at a CAGR of 23.3% to reach a market size of USD 5.27 Billion in 2025

The major challenges pricking the growth of the CALA Cloud IP Telephony and UC&C market includes Quick response or attention to increasing demand, Shortage of Skilled labor

The growth of the market is restrained by factors such as Complexity in Implementing Unified Communication,, Lack of Tangible ROI, Customer concerns over the reliability and security of cloud communications

The growth of the CALA Cloud IP Telephony and UC&C market is augmented by driving factors such as Proliferation of Smart Phones and BYOD Trend, Increased Demand for Cloud Based Solutions, Penetration of Internet of Things, The “instant” factor and the reduction of turnaround time, The Consumerization of IT.

Further Reading

Appendix

  • USD – US Dollar
  • OEM - Original Equipment Manufacturer
  • SMB - Small and Medium Business
  • TCO - Total Cost of Ownership
  • ROI - Return on Investment
  • CAGR – Compounded Annual Growth Rate
  • BYOD – Bring Your Own Device
  • CAPEX - Capital Expenditure
  • IOT - Internet of Things


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