IT-Review

Brazilian SMB Telecom Budgets Will Increase 10% to 30% in 2005

More than 60% of Brazilian SMB companies have 2004 telecom budget less than US$30,000; voice holds the majority.

According to the Yankee Group 2004 Latin America Small & Medium Business Communications Survey, increasing budgets mean companies are gaining advantages from IT and telecommunication services, helping to fuel a cycle of increased innovation by service providers and lower prices. However, voice still dominates SMBs' telecommunications costs--forcing enterprises to look for ways to reduce telephony costs. Despite cost reduction drivers, very few SMBs have implemented VoIP or IP telephony solutions.

"The key to success in the SMB market will be tailoring appropriate solutions that meet business needs. When asked if they were satisfied with their carriers' ability to understand their needs, survey respondents ranked competitive voice and data providers highly, but gave incumbents and mobile providers low scores. At the same time, respondents indicated their interest in service bundles, including Internet, voice and mobile solutions. This suggests that mobile operators should look into alternative channels targeting the SMB market, perhaps wholesaling their services to data providers who have a sales structure more appropriate for the SMB market," says Luis Minoru Shibata, manager of the Yankee Group's Brazilian operation.

The Yankee Group 2004 Latin America Small & Medium Business Communications Survey fielded in Brazil was designed to help telecommunications carriers, wireless service providers, equipment vendors, systems integrators and enterprise application vendors understand demand trends for wireless and wireline services, as well as purchasing behavior of small (20 to 99 employees) and medium-sized (100 to 499 employees) businesses.

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