Latin American carrier ImpSat Fiber
Networks Inc. on Wednesday expanded its offerings by announcing a partnership with Oracle Corp. and Sun Microsystems Inc. to provide electronic commerce services in the region.
ImpSat, which offers a variety of telecommunications services in several of the region's largest countries, will use Sun hardware and Oracle software to provide e-commerce services such as managed hosting of Web sites and applications to its target audience -- businesses, government agencies and other carriers.
Although e-commerce has yet to take off in Latin America, the consensus from market researchers is that online sales will skyrocket in the region in the coming years. Consumer-oriented sales, also known as business-to-consumer transactions, are expected to grow from just US$194 million in 1999 to $8.3 billion in 2005, according to estimates from Jupiter Communications Inc. in New York. Meanwhile, estimates for online transactions between companies, also known as business-to-business sales, vary considerably and include very optimistic projections, such as the one from Dataquest Inc. of $124 billion in 2004.
The market for Internet services, such as e-commerce-related services, promises to be lucrative in Latin America. On Tuesday, market researcher Frost & Sullivan Inc. reported that ISPs (Internet service providers) generated a total of US$1.18 billion in revenue in 1999 in the region, a 67 percent increase over 1998. The firm predicts that this market will grow at a compound annual rate of 58 percent through 2005, when revenue will total $17.4 billion in Latin America.
ImpSat has traditionally supplied satellite-based telecommunications services, but lately it has been investing heavily to build its own fiber-optic network in order to provide voice and high-speed, broadband data transmission and Internet access services, an underserved market in Latin America with a lot of pent-up demand. For example, ImpSat announced in June that it would spend about $100 million to expand its network in Brazil, Argentina and Chile. [See "ImpSat to Extend LatAm Network by 25 Percent," June 21.]ImpSat, whose owners include Nevasa Holdings Ltd. (48 percent), British Telecommunications PLC (19 percent) and Morgan Stanley Dean Witter & Co. (16 percent), is based in Buenos Aires, Argentina, and can be reached at http://www.impsat.com/. Oracle, based in Redwood Shores, California, can be reached at +1-650-506-7000 or via the Internet at http://www.oracle.com/. Sun, in Palo Alto, California, can be reached at +1-650-960-1300 or http://www.sun.com/.