Latin American cityscape at night

Analysis: wake up to wireless

Network operators in Latin America discuss the challenges of 4G and WiMax.

Accessing the Internet at high speed and without wires is catching up fast in Latin America and the Caribbean.

While at the end of 2008 there were fewer than five million people using wireless broadband services in the region, that figure is now over 50 million and will keep on growing to reach around 220 million (or nearly 30 per cent of all mobile phone lines) by 2015, according to market research firm Dataxis.

Over the space of two days at the end of August, the great and the good of Latin America's wireless broadband scene gathered in downtown Buenos Aires to take stock of the progress made so far, identify existing challenges and plot the future of their industry.

During the presentations and discussions, three clear topics emerged as those currently causing the biggest headaches (and opportunities) for operators, equipment vendors, governments and users.

The first is part of a global trend that is affecting most 3G and 3.5G networks around the world. Driven by the success of the iPhone and other Internet-enabled portable devices, coupled with the appetite for bandwidth-intensive applications such as YouTube video streaming, exponential traffic growth is putting an unsustainable strain on networks.

Marcelo Canton from Telecom Personal, one of Argentina's three dominant mobile phone operators, admitted that it was a question of time before companies in the region were forced to drop any lingering unlimited data plans and replace them with capped download versions.

'Every infrastructure upgrade that we carry out in an attempt to increase our 3G network capacity gets almost immediately exhausted,' said Canton. 'Demand is insatiable.'

Spectrum hunger

The second conundrum facing the region's wireless broadband operators is that, while they're confident that they have the technological tools to at least keep at bay this insatiable thirst for bandwidth, they will need a little help from the regulators if they are to put such tools to work.

The instruments in question are next-generation, 4G transmitting and receiving equipment based on the new LTE (Long-Term Evolution) radio interface designed by the Third Generation Partnership Project.

The governmental aid needed, on the other hand, is in the spectrum allocation department. LTE is quite a flexible technology that stipulates the use of a wide range of suitable carrier bandwidths, from 1.4MHz to 20MHz. However, every single megahertz that mobile operators currently hold is busy carrying 2G, 3G and 3.5 (HSPA) traffic.

There's an urgent need for new spectrum allocations, the cellular guys claim, and they've even identified some of the ideal candidate frequency bands for potential 4G auctions.

Chief among them is the 700MHz band, also known as the 'digital dividend', a term coined to describe the process of reallocating spectrum previously used for analogue TV broadcasting. 'In many Latin American countries, the 700MHz band is not heavily occupied,' said Sebastian Cabello, regulatory manager at the GSM Association. 'That means that it's not even necessary to wait for the digital switchover process to allocate part of that spectrum.'

Digital divide

The third major problem that wireless broadband service providers acknowledge they have is rural coverage. Or, more precisely, the lack of it. 'While it is true that in many Latin American countries the penetration of mobile phones has surpassed the 100 per cent mark, we continue to be, in more than one sense, an emerging market,' said Alvaro Gonzalez, the commercial director for Latin America of Alvarion, a major provider of WiMax equipment.

He pointed out that while both fixed and mobile broadband Internet access is increasingly available in major conurbations, 'the vast majority of rural areas remained deprived of even the most basic terrestrial infrastructure'.

This is one of the main arguments that cellular operators are putting forward for the release of the 700MHz frequency band. Unlike higher portions of the radio spectrum (such as those above 1.7GHz usually used for 3G services), the propagation characteristics of the 700MHz band make it ideal to extend wireless coverage into rural areas at a reasonable cost.

In the meantime, a growing number of small, non-incumbent wireless service providers are using WiMax (or IEEE 802.16) technology to fill the gaps. So far, 117 such deployments in 33 Latin American and Caribbean nations have been accounted for by the WiMax Forum.

Movilmax in Venezuela is one of them. The greenfield operator, whose 2007 launch became the world's first commercial WiMax rollout in the 2.5GHz band, owns 48MHz and a licence to operate nationwide. It offers broadband access packages of up to 3Mbit/s, limited and unlimited, to residential and small business clients.

Showing a picture of a densely populated shanty town in the outskirts of Caracas, Gabriel Perez, the operator's WiMax network director, said: 'This is a section of the population that doesn't have access to banking services. Coincidentally, it is here that the demand for plain Internet access is strongest. Copper lines don't reach these hills; neither do fibre optics nor cable networks.'

Perez added: 'For us as a greenfield operator, it is technically very easy to reach these types of areas. You just have to put up a base station there, link it via microwave radio and illuminate the target population with 2.5GHz WiMax transmissions.'

How do subscribers pay for the service if they don't hold a bank account or a credit card? Easy: devices needed to receive the service, such as so-called customer premise equipment or USB dongles, must be paid for in cash. And a selection of daily, weekly and monthly data packages are available as prepaid options.

Does it work? It appears to be doing so. Movilmax has already signed over 5,000 subscribers. Its 2011 and 2012 plans include full coverage of Caracas. 'This will require the deployment of 1,500 new WiMax base stations,' said Perez.

After listening to him answer an off-the-record question about how much the operator is being asked to pay for each of these nodes, it's fairly safe to assume that business is thriving.

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