Latin America Internet Services Market to Reach US$8.1 Billion by 2004, New IDC Study Reveals

FRAMINGHAM, Mass., January 24, 2000 – The Latin American Internet services market will see robust growth throughout the next five years, according to a new report published by IDC Latin America. Increased demand for access coupled with evolving value-added service supply will help drive a five-year annual growth rate of 42% through 2004. The market at that point will reach a value of US$8.1 billion.

IDC's new study, Latin America Internet Services, reveals the Latin America Internet services market had a value of US$1.4 billion in 1999. This value represents a 22% increase over 1998's estimated value of US$1.1 billion. In September 1999, when the research was performed, Internet accounts for the entire Latin American region totaled 4.2 million.

"The overall market volume, in terms of Internet accounts, grew rapidly in 1999, but pricing fell dramatically," said Annika Alford, manager of IDC's Latin America Internet research and presenter at January 25th’s Latin America ISPs and Their Emerging Services: Winners and Losers in the Consumer and Corporate Sectors. "This is the result of both continued strong demand for access services and increased competition among the top ISPs in each of the country markets. We can see that basic dial-up access is nearing commodity status in Latin America like it has in the United States."

1999 was the "Year of the Acquisition" in Latin America's Internet services market, the IDC study found. Driving the many acquisitions in 1999 were key top-tier ISPs, which were striving to rapidly establish a pan-regional presence without having to build a network from the ground up in each targeted country market.

While dedicated line availability and pricing improved in some key markets such as Brazil, overall penetration of dedicated lines is still low in Latin America. The number of dedicated lines in service in the region in September 1999 was slightly more than 36,000. In addition to dedicated lines, broadband access made its official debut in Latin America in 1999. Cable, ISDN, wireless, and xDSL broadband options were rolled out in many of the region's top-six country markets.

Despite an underdevelopment of the larger value-added services market, 1999 saw the emergence of ecommerce solution services as a key value-added service. This service surpassed Web-hosting services as the top revenue generating value-added service for the region's ISPs. A major weakness among the region's ISPs, however, is their inability to offer online payment transaction services within their ecommerce solution umbrella.

IDC's Latin America Internet Services study (IDC #B21460) investigates and sizes the 1999 Internet access and value-added Internet services markets of Latin America. Volume I of the research presents a top-down view of the regionally aggregated results of interviews with the top 90 Internet services providers in the region's top-six country markets (Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela). Volume II of the study presents the country-specific details for each of the top country markets of the region.

The study is available for purchase by contacting Nora Delgado at 305-267-2616 or ndelgado@idc.com. For more information about IDC's Latin America research programs, please contact Beth Freedman or Lisa Bloom at 508-872-8200.

On January 25th, IDC Latin America will be hosting Latin America ISPs and Their Emerging Services: Winners and Losers in the Consumer and Corporate Sectors at the Biltmore Hotel in Coral Gables, Florida. For more information on this event or the IDC Latin America 2000 Breakfast Briefing Series, please contact Barbie Cordero at 305-267-2616 or visit www.idc.com/Events.

With a network of six country offices in Latin America and two regional offices — in Silicon Valley, Calif. and Miami — IDC provides full market coverage of PCs, mainframes, Unix systems and workstations, servers, desktop printers, professional services, local area networks, the Internet, telecom, RDBMS software, distribution channels, NT, and IT spending patterns in Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. IDC also conducts primary research in Peru, Ecuador, Central America, and the Caribbean. IDC is the leading supplier of IT market information on Latin America.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 42 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

# # #

All product and company names may be trademarks or registered trademarks of their respective holders.