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SIP Trunking in Latin America, Europe, and Elsewhere


Title: SIP Trunking and Latin America Author: Joel Maloff Last modified by: Sofia Andreasson Created Date: 1/6/2011 5:54:22 PM Document presentation format – PowerPoint PPT presentation

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Title: SIP Trunking in Latin America, Europe, and Elsewhere

SIP Trunking in Latin America, Europe, and
  • Joel Maloff
  • Maloff NetResults

SIP Trunking in Latin America
  • September 2011

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

Growth Areas in Latin America
  • Argentina
  • Brazil
  • Chile
  • Ecuador
  • Mexico
  • Peru

Growth Rates in Latin America
  • 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.

Broadband Internet Services
  • Dedicated circuits (E1) are costly
  • Monthly recurring charges can be as high as
  • DSL services may not offer sufficient bandwidth
    and quality to provide a reliable alternative to
    traditional telco circuits.

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

Legal and Regulatory Issues
  • 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
  • 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.

Incumbent Telco Efforts
  • 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.

DID Availability and Porting
  • 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!

Technical Considerations
  • 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.

Reasons for Optimism
  • 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
  • Incumbent carriers are beginning to see the
    benefit of offering SIP trunking services.
  • Cable broadband deployment is also growing.

Reasons for Optimism
  • 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//
  • 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 worlds 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//
  • December 3, 2010

Reasons for Optimism
  • 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.

Changing Circumstances
  • 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, 2011

  • 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.

SIP Trunking in Europe
  • September 2011

  • 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
  • Cost and availability of broadband Internet
  • Predominance of ISDN as a preferred method of
  • Incumbent telco efforts

Top Ten Countries in Europe, based on Number of
ITSPs Offering SIP Trunking
  1. UK
  2. Italy
  3. Poland
  4. France
  5. Sweden
  • 6. Norway
  • 7.Greece
  • 8. Belgium
  • 9. The Netherlands
  • 10. Portugal

Source InGate Systems
SIP Trunking Trends in Europe
  • 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

Observations for Specific Countries
  • 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.

Observations for Specific Countries
  • 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.

Conclusions SIP Trunking in Latin America and
  • SIP Trunking WILL continue to grow in Latin
    America and Europe but more slowly than in the
  • 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.

Conclusions SIP Trunking in Latin America and
  • 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.

Other International Observations
  • 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

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

Thank you for your interest!
Joel Maloff Maloff NetResults www.maloffnetresults