The promise of wireless Internet access
in Latin America has brought together one of the world's top software vendors
and one of the region's leading Internet companies.
StarMedia Network announced Wednesday that it will offer Oracle's Internet Application Server (iAS) Wireless Edition to wireless operators in Brazil and Argentina, a deal that underscores the rising importance of wireless communications in Latin America.
By the end of 2000, in Latin America there will be 50.6 million subscribers to wireless telecommunications services, such as cellular telephony, a figure expected to grow to 114.3 million by 2005, according to the Yankee Group Inc., a Boston-based market research firm. This means that wireless penetration rates in Latin America will increase from 7.6 percent in 1999 to 22.5 percent in 2005, Yankee Group said.
The robust growth expected in the region's wireless communications market is leading many observers to predict that wireless Internet access may become the preferred method for going online in Latin America, where PC penetration rates remain low. This is why many wireless carriers in the region are rushing to offer Internet access, content and services to their subscribers.
"We expect voice via cellular to exceed voice via fixed lines in Brazil by 2003. This has led many to the conclusion that the cell phone will become the dominant access device in Latin America, filling the void in Internet access devices in Latin America left by low PC penetration rates," reads a recent report on Latin America's Internet market from Chase H&Q, a division of Chase Securities Inc.
Oracle's product will help StarMedia make more attractive the software package it offers to wireless carriers in Brazil and Argentina, because iAS will help carriers provide more sophisticated services, such as linking wireless devices to back-end databases, according to StarMedia. Meanwhile, Oracle expects to take advantage of StarMedia's growing presence among wireless carriers in Latin America to boost sales of its software.
StarMedia operates a variety of Web portals and search engines aimed primarily at users in Latin America. The company currently provides wireless content and services to seven wireless carriers in Latin America and is in discussions with several others. StarMedia equips these carriers with the software and infrastructure necessary to provide wireless Internet access to their subscribers, said Enrique Narciso, general manager of StarMedia's mobile division.
The agreement between StarMedia's mobile division and Oracle's Brazil subsidiary calls for iAS to be offered to wireless carriers in Brazil and Argentina, two of the region's three largest telecommunications markets. Yankee Group expects wireless subscribers in Brazil to grow from 14.2 million in 1999 to 46.7 million in 2005, and in Argentina from 4.3 million in 1999 to 11.4 million in the same time frame.
The software StarMedia provides to carriers is proprietary, but the company has begun adding third-party software to complement its offering, Narciso said. In addition to the agreement with Oracle, StarMedia announced in July a partnership with Akumiitti to provide wireless applications from the Finnish developer to carriers.
"We not only want to offer our own applications, but also software from third parties, in order to develop the platforms that carriers may need," Narciso said.
Oracle, in Redwood Shores, California, is at http://www.oracle.com/. StarMedia, in New York, is at http://www.starmedia.com/.