Building a VoIP Business in Latin America

There’s been a lot of interest in developing markets like Latin America among communications vendors and providers. If you were fortunate enough to be part of ITEXPO (News - Alert) East in Miami this past February, you saw, in the midst of a significant global recession, a sizable increase in attendance by businesses, many of whom focus on the Latin American market, looking to leverage the latest VoIP technologies to enhance their business operations.

One of the people who, more than seven years ago, foresaw this opportunity in Latin America is Sandra Ximena Diaz Hoyos, President and CEO of Smart Network Solutions (News - Alert), a hosted communications provider focused on Latin America and other developing markets. I had the pleasure to interview Sandra on video at ITEXPO in Miami and more recently on the phone.

Back in 2002 when Hoyos and her co-founders —both of whom are also women — launched SNS, they saw a definite value proposition in communications technology in that it was a constantly evolving space that would allow businesses to cut superfluous expenses and increase productivity at the same time. Sandra believes the tech revolution has the potential to improve business operations for any business, from small local farmers to the largest multinational corporations.

At the time, though, VoIP was merely in its infancy, especially in Latin America, with less than two percent of businesses having even partially adopted it as a communications alternative.

Thus, Smart Network Solutions (News - Alert) was formed to leverage this opportunity and to help promote IP Communications and drive its adoption and drive its adoption. Today, Hoyos estimates nearly half of large businesses in Latin America have adopted some form of VoIP technology, which has also seen SNS grow into a larger business, with offices in Miami, Colombia, Mexico, and Venezuela serving the Latin American region, as well as a European satellite office.

“It’s been absolutely revolutionary,” she said. “When we started, very few businesses had adopted VoIP, and even large corporations were only starting to look into it.”

It wasn’t an easy road to success for Hoyos and her partners, though. Launching a start-up technology in a male-dominated industry serving a market that still today has a gender bias in the business world — especially in technology.

Access to the market was difficult, and even when they were able to get in front of business executives, they had to overcome the perception that males were better equipped to present technology solutions and introducing communications equipment and services to the market.

But, Hoyos believes they were able to leverage what was an obvious obstacle and use it to gain increased access to the market because, regardless of perception, they were becoming known in the market as the only communications company owned by three women.

Seven years later, perception is an obstacle SNS has been able to overcome, but there are other ongoing market challenges that persist, like cost of and access to high-speed broadband. It’s not as expensive as it once was, but Internet access is still relatively weak in Latin America and other underdeveloped markets, notes Hoyos. To her, carrier infrastructure is the single greatest barrier to the real explosion of VoIP and convergence technologies.

In order for that to change, the market, which is still largely protected and driven by a relatively few large operators, needs to be opened to competition. That will allow broadband penetration to grow and the VoIP market will be one of the key beneficiaries. One the barriers to entry are eliminated, entrepreneurial ISPs will quickly expand availability of services, benefitting vendors and adopters alike.

This is only the beginning, though, she hopes. Like many in this industry, she is looking at a future with true single address access to all forms of communication — true communications convergence. Her outlook, though, is a little more optimistic than many.

“Some people predict it will take five to ten years; I don’t think it will take quite that long,” she says.

Hoyos continues to see significant opportunity in a market she has helped grow over the past seven years, though she understands that many businesses are going to be in a holding pattern until the market improves. Still, she continues to promote research and development, and foresees a bright future for the market as a whole.

Likewise, she sees a positive change in opportunity for female executives in the market. “It takes a lot of time and commitment, but that is the key to success anywhere,” she says, “ but it’s important to understand opportunities do exist for everyone.”

Come join us in Los Angeles, Sept. 1-3, for ITEXPO West, to talk to people like Hoyos, who are helping drive communications innovation. Hoyos and Smart Network Solutions will be back in Miami for ITEXPO East, Jan. 20-22, 2010. IT

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