Luis Alvarez

Challenges in emerging markets: the LATAM case

BT recently decided to strengthen its presence in Latin American. Edwin Hageman, CEO of BT Benelux and  founder of the Let’s Talk group on LinkedIn, gave some key data on the operation and the LATAM region.

We now sat down with Luis Alvarez, President BTGS EMEA & Latin America. Luis elaborates on the LATAM market. We first asked him how the region will prepare for a Latin American decade.

Luis Alvarez: Personally, I think the Latin American decade already started a few years ago. The resilience of the region to the global economic crisis has been remarkable. When travelling around the region, I do feel the positive spirit in most of the countries, and it reenergises me.

This resilience was made possible thanks to the strong focus on reducing poverty, an increased effort in building infrastructure and significant developments in health and education.

A larger middle class is fostering economic growth and Latin America is now high on the agenda of most global companies. At the same time “multilatinas”, multinational companies based in Latin American, have emerged as leaders with big ambitions and globally recognised skills.

However, there are many challenges to deal with in order to deliver against those high ambitions: rising interest rates, democratic consolidation, increased commodity prices which impact on inflation and, for governments, balancing growth and continuous investments to reduce social divide. Fortunately, Latin America’s low debt levels (public debt below 45% of GDP) and high reserves (foreign exchanges reserves around $600bn) provide a solid support for the region’s development.

How critical are their infrastructure needs – from transportation to communication?

Luis Alvarez: Back in April when I was at the world economic forum on Latin America, this topic was high on the agenda.  In the panel where we addressed the issue, it was highlighted that Latin America invests 50% less on infrastructure than it should to guarantee economic growth. It now invests 2% of GDP, when it should be investing at least 4%, if not 5% to 6%, on infrastructure. To guarantee the long-term predictability needed for infrastructure investments requires macroeconomic sustainability and stability in the government-set rules of the game, in everything from a fixed regulatory framework to taxes and licensing.

A lack of proper infrastructures – some of them linked to critical events such as the 2016 Olympic Games in Brazil – social breaches, and economical and political stability, remain they key challenges that are high on the agenda of leaders across Latin America

How important is the Latin American region for BT?

Luis Alvarez: It is very significant for BT, for our existing customers in Latin America and for new and potential customers in the region and globally. We have announced that we are putting additional focus and investment into the whole of Latin America, enabling us to offer the same solutions and quality of service there as we offer elsewhere, responding to feedback from our customers.

By accelerating our ambitions for growth in Latin America we are helping our customers to expand their operations. So what does this mean? Well it means we’ll be investing in building up our infrastructure in the area – for example, by increasing our MPLS PoPs by more than 20 per cent. We’re also going to launch ethernet services in 21 cities across the continent.

We’ll be adding 250 personnel to enhance our Professional Services offering in the region, extending our product and service portfolio and launching centres of excellence in Rio de Janeiro (satellites), Bogota, (data centres and security) and Mexico City (IP telephony and contact centres).

BT already serves around 1,300 organisations in the region, including a number of global multinational companies, such as Unilever, Rhodia, BASF and Fiat. BT has this year signed a number of high profile contracts with Latin-American companies such as the £133 million contract with ECT – Empresa Brasileira de Correios e Telégrafos (the state-owned Brazilian Post Office and Telegraph Company), with Caixa Economica Federal to connect its data centres with its banking correspondents and lottery outlets in Brazil, with Pão de Açúcar , the largest retail conglomerate in Brazil, with Ecopetrol, Colombia’s largest company, and with Colombia’s Ministry of Information and Communication Technologies, where BT supports the Compartel programme to deliver internet connectivity to hundreds of schools, hospitals, council buildings, courthouses and other government institutions and contracts.

To know more about BT’s activities in LATAM, you can click here. To learn more about the customer-led LATAM programme, click here.

Share your thoughts by commenting below or joining the conversation in the BT Let’s Talk LinkedIn Group.

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