February 01, 2001

Many ISPs that crafted their business plans on the wings of the Latin America Internet euphoria of 1999 are today facing harsher market realties. Nonetheless, a recent IDC study, Latin America ISP Investment Trends, 2000, reveals ISPs in the region continue to forge ahead with infrastructure investments even after the slowdown of 2000 when the region experienced rapid consolidation in the most mature markets, plummeting stock valuations, and reduced venture capital availability, among other factors.

For this study, IDC surveyed approximately 150 ISPs of all sizes across Latin America and studied their investment trends in IT hardware, software, outsourced professional services, and telecom hardware and services. Combined technology investments by the surveyed ISPs are expected to exceed US$460 million in 2001, with almost half of the hardware spending devoted to servers, PCs, and WAN hardware and rapid growth occurring in storage. The study also reveals ISP investments in hardware and telecommunication services still account for a considerable chunk of total technology investments in Latin America although they are expected to decline from about 70% of spending in 1999 to about 60% by the end of 2001.

"Beyond simply growing their account base, many ISPs in Latin America are increasingly preoccupied with two main areas: providing ecommerce solutions and providing new and better access technologies (broadband) to their customer base," said Alex Manfrediz, an analyst for IDC Latin America. As such, this study confirms that ISPs remain major consumers of IT and telecom hardware, software, and services, and therefore are a principal market for technology vendors in the region. Survey results identified the greatest factors driving ISP growth as broadband adoption and Internet penetration, with ecommerce and the adoption of wireless technologies having the most significant influence on the business strategy of Latin American ISPs.

For more information at http://www.idc.com

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