1. Joel Maloff Maloff NetResults joel@maloffnetresults.com Phone.com jmaloff@phone.com

2. September 2011

3.  SIP Trunking has not been adopted in Latin America at the same rate as in the USA.  The major factors affecting this adoption include:  Cost and availability of broadband Internet services  Minimum cost contracts  Questionable legal status of SIP trunking  Incumbent telco efforts

4.  Argentina  Brazil  Chile  Ecuador  Mexico  Peru

5.  Growth rates for SIP trunking vary from country to country in Central and South America.  Anecdotal evidence points to a 25% year-over year growth rate over the past three years.

6.  Dedicated circuits (E1) are costly  Monthly recurring charges can be as high as US$1,000.  DSL services may not offer sufficient bandwidth and quality to provide a reliable alternative to traditional telco circuits.

7.  In many parts of Latin America, businesses are required to take a minimum cost contract which combines fixed circuit fees and long distance usage.  Reducing the costs associated with long distance and international calls may be irrelevant if minimums still must be met.

8.  SIP Trunking is not illegal but neither is it explicitly permitted.  Some incumbent carriers, such as Belize, have blocked SIP traffic.  Most regulatory agencies are not technology- oriented, focusing on the specific telecom services independent of the supporting technology. Most definitions are still tied to old concepts like demarcation points based on physical FXS subscriber interfaces, DIDs/local areas and physical locations as monolithic entities, etc. This makes it very difficult for a VoIP service provider to comply with regulatory requirements.

9.  Some of the traditional carriers have introduced SIP Trunking but at a price that is equal to prior services therefore minimizing a financial incentive to move forward.  Not all national carriers have introduced SIP trunking services yet, and these carriers are viewed as followers rather than as leaders.

10.  DIDs are available from many Latin American countries but porting is a challenge thus far.  In some countries (e.g., Argentina), DID portability is an issue.  For example, having a Buenos Aires DID assigned to a SIP-based softphone running on a laptop would require the user to never leave the Buenos Aires local calling area to use it!

11.  Because SIP Trunking has not achieved significant adoption yet in Latin America, technical issues, including interoperability, are still a concern.  Connecting some IP-enabled PBXs to SIP trunks have been problematic.  Some integrators use an Asterisk PBX as a makeshift Session Border Controller.

12.  Multinational corporations and expatriates living in Latin America are increasingly using SIP trunking and VoIP for US telephone numbers.  It is expected that legal protection for use of SIP trunking may begin to be enforced in Latin America.  Incumbent carriers are beginning to see the benefit of offering SIP trunking services.  Cable broadband deployment is also growing.

13.  In the Latin American region, the broadband penetration rate will nearly double, increasing from 7 percent in 2010 to 12 percent by 2015. (Research and Markets, January 2011) Read more: http://www.centredaily.com/2010/12/08/2389136/research-and-markets-in- the-latin.html#ixzz1AHUHh2qFhttp://www.centredaily.com/2010/12/08/2389136/research-and-markets-in- the-latin.html#ixzz1AHUHh2qF  “Fixed Broadband: Worldwide Forecast 2010-2015 (Analysis Mason),” predicts a compound annual growth rate of 15.4 percent for broadband in Latin America over the next few years, which is more than any other region in the world.  “ This is a case of a sleeping giant awakening. The region was slow initially to adopt the internet, accounting for just 8 percent of the global online population in April 2010. But Latin America was already the world’s fastest growing region for online penetration, climbing 22 percent from April 2009 largely through broadband deployment. The region is culturally ready for a massive surge in broadband…” http://broadbandbreakfast.com/2010/12/latin-america-set-for-fast-growth-in- broadband-penetration/ December 3, 2010

14.  Broadband penetration in major countries:  Chile 17%  Argentina 12%  Mexico and Uruguay 10%  Venezuela 9%  Brazil 8%  These numbers do not take into account business connections which total about 180,000 lines as of late 2010 with a CAGR of about 3.5% over the next 4 years.

15.  “Latin America is taking the leadership in mobile broadband adoption, and the impact will be as hard to predict as it has been when trying to forecast uptake across other technologies in other regions.” Latin America Telecom Insider / Vol. 3, No 3, June Edition, Pyramid Research, June 1, 2011Pyramid Research

16.  Latin America represents a tremendous opportunity for growth in the use of SIP trunk services.  In Chile alone, SIP trunking is expected to double from 2010 to 2011 based on forecasts for Chilean ITSPs.  As with all regions, there are unique circumstances that must be understood, including political, economic, and technical.  Presuming that a US model can be readily applied in Latin America is in error.

17. September 2011

18.  SIP Trunking has been growing more quickly in Europe than in Latin America but still more slowly than in the USA.  The major factors affecting this adoption include:  Cost and availability of broadband Internet services  Predominance of ISDN as a preferred method of access  Incumbent telco efforts

19. 1. UK 2. Italy 3. Poland 4. France 5. Sweden 6. Norway 7.Greece 8. Belgium 9. The Netherlands 10. Portugal Source: InGate Systems

20.  SIP trunking will replace ISDN in due course but it will take a number of years. The uptake will be very different from one country to another depending on incumbents' voice strategy and the quality and availability of the network access reaching small or remote locations.  Western European SIP Trunking Market, 2010-2014, IDC, July 22, 2010 IDC

21.  Sweden  ISDN remains as a cost advantage limitation.  Large carriers have yet to be significantly challenged by smaller ITSPs and have been reluctant to cannibalize their own revenue until forced to do so.  These large carriers are now beginning to bundle SIP trunking as a response to the ITSP threat.  Finland  SIP trunking is quickly taking hold with significant growth anticipated in 2011.

22.  Denmark  ISDN is again an issue.  It is anticipated that the primary LEC will halt selling and supporting BRIs which may lead to renewed interest in SIP trunking.  Spain  Major carriers dramatically reduced prices for services in 2010, forestalling any significant growth in SIP Trunking.  Orange and ONO (cable operator) are expected to offer VoIP SIP services during 2011 for Residential and SOHO.

23.  SIP Trunking WILL continue to grow in Latin America and Europe but more slowly than in the USA.  Factors that drive SIP trunking in the USA are less clear in Latin America and Europe.  Lower penetration of broadband Internet access in Latin America is impeding growth but moderating.  Widespread ISDN in Europe minimizes the immediate cost advantage.  Influence of large national carriers slows the opportunity for adoption.

24.  SIP trunking WILL become the dominant form of voice communication for small to medium businesses in Latin America and Europe but it will take time – likely five years or more.  Cost will not be the same driver as in the USA.  Incorporation as part of a unified communications strategy will be key.  Inclusion as part of an IP-enabled PBX will make SIP trunking use easy and obvious.  Access to foreign telephone numbers – when permitted – will expand functionality.

25.  August 2011 - NTT Communications introduces UCaaS over IP-VPN  Expanded coverage of its SIP Trunking Plan, initially released in Singapore May 2011, to 15 countries including Australia and the UK, and to 30 countries by March 2012.  Arcstar Global IP-VPN required  July 2011 – Europ Assistance SA (Johannesburg, South Africa) implements SIP Trunking via MPLS  Europ Assistance SA have operational agencies and respondents in 208 countries, answering more than 33 million telephone calls and handling 6.5 million assistance cases around the world each year.

26.  SIP trunking and Unified Communications are beginning to capture market share outside of the USA.  The models may vary but the trends are undeniable.

27. Thank you for your interest! Joel Maloff Maloff NetResults www.maloffnetresults.com joel@maloffnetresults.com