Interview with Jorge Granados, CEO, Latinode

Please tell us a bit about Latinode. How and when did you enter the VoIP business?

Latinode is a telecommunications VoIP long distance carrier. The company was established in Miami around 1999. Our main focus from the very beginning has been the developing countries. We initially started with countries in Latin America. Today we have interconnection agreements not only there but also in Middle East, Africa and some countries in Asia. At the end of this year we will have a yearly run rate of over 3 billion minutes of traffic moving through our network. We employ over 180 people in offices based in the United States, Guatemala, Mexico, Nicaragua, Honduras, Columbia, Argentina, France and Germany.

You offer wholesale as well as retail services. Do you as a result sometimes compete with your customers?

Latinode does not compete with its customers. The company offers retail products through distribution channels.

You handle some 3% of the VoIP traffic. Can you tell us what that traffic is made

up of? Is it of mostly the international long distance traffic?

I would say about 90% of our revenue is generated through international long distance traffic. The remaining 10% comes from the national long distance traffic from our local operations in Argentina, Guatemala and Honduras.

How are you able to manage margins in long distance wholesale segment that has seen numerous bankruptcies?

Latinode has followed the strategy of direct interconnections and direct facilities with the PTTs in the countries of its operation. That enables us to deal with high volume, capacity and quality termination. With high volume we are able to negotiate lower termination rates, which helps in maintaining the margins.

You also offer VoIP peering. Has that brought in any additional traffic to your network? What percentage of your traffic comes in IP-handoff format?

VoIP peering is not really popular in the countries outside the US where Latinode operates but there is a future. In the US, Latinode is using VoIP Peering somewhat. We receive H.323 as well as SIP handoffs. Between 15 to 20% of the traffic comes in IP-handoff format.

How is your private label Voice-over-Broadband business doing?

We have a few thousand end users on our platform. The private label for our VoBB have been launched in Argentina, Guatemala, Germany and United States.

Is the private model sustainable over time given that service providers are increasingly opting for their own infrastructure?

There are always going to be opportunities in the private label business. Many of the service providers are small Cable operators. There are also many non-cable telephone operators here in the States and overseas who do not have the capability to deploy and maintain a VoIP network. Neither do they want to venture into managing such a network themselves.

Retail Voice over Broadband is an overcrowded market now, what is the fun in being that market?

Voice over Broadband market is really crowded in United States but in many other countries like Russia, Argentina and Mexico where Latinode operates, VoBB is considered a new and vast opportunity.

Have you explored the Voice over WiFi or cellular traffic handling opportunities on the wholesale side?

We have several agreements with some of the large mobile operators in Latin America for wholesale termination. So we are exploring opportunities there. As far as new technologies like WiMax, WiFi and others are concerned, it will take about 2 to 3 years in becoming main-stream for VoIP traffic.

You present the company as the one targeting immigrant communities. Does that not exclude the majority of the population?

Not necessarily, because Latinode is not AT&T, Verizon or Telecom Italia but a small company. In order to survive and succeed it has to be focused and capable to provide good service to the targeted customer base.

There must be several companies targeting immigrant communities in the US. What competitive advantage do you offer as compared to them?

Yes, there are some companies that are targeting the Hispanic and the immigrant communities in the United States. Latinode’s main advantage is customer service and the quality of product that it offers. Most of the companies offering services to these communities in the United States base their offer just on the basis of price and do not care much about the quality.  We also have our own customer service center as opposed to others who outsource it.