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Latin America Revenue Lost to VoIP Peaked in 2004
Will Continue to Decline Even as VoIP Minutes Increase

BOONTON, NJ (July 26, 2005) Latin American international voice telecommunications revenue lost to Voice over the Internet Protocol (VoIP) bypass peaked in 2004, and will gradually decline even as VoIP minutes of use (MOUs) continue to increase, according to a new market analysis report by Insight Research. The study concludes that as Latin American telecommunications companies brought their international rates into line with actual costs, the attractiveness of VoIP as an arbitrage opportunity diminished, slowing down its adoption.

According to the market analysis study, “Telecommunications and VoIP in the Americas: A Market Perspective on the Major Economies 2005-2011,” in 2004 VoIP calling revenue represented 58 percent of the $14 billion spent in Brazil, Argentina, and other Latin American countries on international calling. By 2011, VoIP bypass is expected to account for only $5.7 billion out of some $18 billion spent on international calling. Of the 5.9 billion Latin American international calling MOUs recorded in 2004, nearly 48 percent were attributable to VoIP. By 2011, VoIP as a percent of all Latin America traffic will drop to 28 percent.

“Once international settlements are in line with the real costs to deliver service, the arbitrage opportunity becomes less compelling, VoIP growth rates slow and actually become a smaller percentage of all international calls,” says Insight president Robert Rosenberg. “Take Argentina as just one example: in 2004, international calling revenue amounted to $2.7 billion of which $0.7 billion was lost to VoIP bypass. In 2011, we expect total international voice to generate $3.4 billion in revenue, but VoIP bypass will take a far smaller percentage,” concluded Rosenberg.

Source: Insight Research (insight-corp.com)