Study: Internet market worth US$5.3bn in 2008

Latin America's internet access market should generate revenues of US$5.3bn in 2008, compared to US$3bn in 2003, according to a report by consultancy Pyramid Research. Pyramid expects internet accounts to grow to 24.7 million 2008, compared to 16.2 million today. This will be three times faster than growth in fixed telephony lines over the next five years, Pyramid said. Growth will be driven by proliferation of dial-up internet access in countries like Bolivia and El Salvador, where access is still limited, as well as a second wave of growth in countries with established internet markets as users migrate to broadband. Pyramid estimates that broadband accounts will grow to represent 32% of all internet access accounts by end-2008, and telecoms operators will play a key role in driving the growth as they try to capture clients from pure internet service providers (ISPs). Telecoms operators will turn increasingly to internet services to compensate for a lack of growth or even a decline in traditional telecoms services, the report said. Furthermore, the internet allows telcos to offer value-added content or applications, as well as remotely managed services for enterprises. Overall, local players in specific countries have become the leading ISPs in Latin America at the expense of regional players such as PSINet and Tutopia. Brazil's Internet Gratis (IG) and Mexico's Prodigy are the region's largest ISPs according to Pyramid, adding that success is based on a combination of reach, proprietary content and marketing.