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Your customers can—all of them. Because Motorola’s Canopy wireless broadband system can deliver the WiMAX services your customers are waiting for. Now. Today. Well before your competition.
What kinds of services? The kinds your customers want and are willing to pay a premium for. With Canopy solutions, you can help any customer that needs to…
• Deliver VoIP and data• Offer residential broadband service• Connect business, hospital and education campuses• Enable video surveillance/security deployment• Serve hot spots, WiFi access with low-cost backhaul• Extend PBX systems• Offer T1/E1 replacement/extension• Facilitate TeleMedicine and distance learning• Provide rapid, temporary deployment for emergencies and events
Proven in more than 100 countries, the Canopy system is a low-cost, high performance broadband solution built on the ATM frame structure specified for WiMAX 802.16e. The foundation of Motorola’s WiMAX portfolio, Canopy products offer fast, easy deployment, exceptional scalability and ROI in 12 to 18 months or sooner.
Why wait to capture customers with in-demand WiMAX services? Call your Motorola representative about wireless broadband today.
WHO CAN HAVE WiMAX SERVICES TODAY?
MOTOROLA and the Stylized M Logo are registered in the U.S. Patent and Trademark Office. All other product or service names are the property of their registered owners. © Motorola, Inc. 2005
MOTOROLA CANOPY™ BROADBAND SOLUTIONSExperience the Canopy solution today. Visit the Motorola Canopy website at www.motorola.canopywireless.com/cw
Call 1-866-515-5825 / International 001+800-795-1530
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National developmentPublic Internet booths in Peru: from thecorporate market to the community market by Edwin San Roman, Chairman of the Board, OSIPTEL, andPresident, REGULATEL
Net impact in Latin Americaby Carlos Carnevali, Vice President Latin America, CiscoSystems
Mobile InternetLatin America – ready for the MobileInternet?by Adilson Antonio Primo, President and CEO, Siemens, Brazil
Service convergenceTrue convergence, building digitalcommunicationsby Wagner Ferreira, President, Lucent Technologies, Brazil
Next generation networksNext generation network evolution –finding the pathby John Everard, CEO, Newport Networks Ltd
IPTVNothing will be as it wasby Richard Lihe Ye, President, ZTE, Brazil
Third generation wirelessCellular’s evolving RF paletteby Jörg Springer, Chief Marketing Officer, Radio FrequencySystems
Internet servicesBeyond the Internet: the race to win thenew Eraby Davi Caproni, General Manager, Juniper Networks, Brazil
3G multimedia The third generation and multimedia inBrazil by Luís Avelar, Executive Vice President, Marketing andInnovation, VIVO, Brazil
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Contents
GSMThe GSM evolution and mobile connectivityin Latin Americaby Erasmo Rojas, Director of Latin America and theCaribbean, 3G Americas
Next generation billingNext generation service management – asingle view of the customerby Alejandro Nestares, Business Development and ProductMarketing Director, CALA, Intec Telecom Systems
Converging communicationsConverging communications in Latin Americaby James M. Bell, Managing Director, CALA Region, Radvision
Legal and regulatory issuesIP and the law in Latin Americaby Helena de Araújo Lopes Xavier, Senior Partner, Xavier,Bernardes, Bragança, Sociedade de Advogados
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MotorolaIntec Telecom SystemsNextNet WirelessNewport NetworksOrga SystemsITU TelecomAsia ITFuturecomVoIP World Asia 05eSecure Malaysia 05PTC14th Convergence IndiaISTARHispamar
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All articles are available online at: www.connect-world.com
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his issue of Connect-World Latin Americaexplores the migration of telecommunicationsservices to Internet Protocol based communi-cations. The issue’s theme is IP – Intelligentpositioning for growth; it focuses upon whatthe Internet invasion means to people, busi-nesses, service providers and equipment sup-pliers in the Latin American region.
The Internet has had a profound impact uponthe world’s economy. Today, one can live inRio de Janeiro and work in London. It hasbrought information and diversion to homesand multiplied the efficiency of business. VoIP(Voice over Internet Protocol) is now, steadilybut surely, overtaking traditional voice com-munications.
IPTV is making inroads, especially in themobile sector, in the traditional broadcastingmarket. In the process, these and other IP-based technologies are profoundly changingthe communications sector, its technology, itsservices and its entire economic structure.
A call to anywhere on the globe will soon costno more than a call next-door, and traditionalbroadcasting mass markets will fragment. Theimpact upon users, and especially in develop-ing regions where telecommunications werenever affordable, is inestimable.
This issue of Connect-World points to theneed of governments and companies to planfor the change. Similarly, in Connect-World’sAfrica and the Middle East, Asia-Pacific,Europe, India and EMEA issues, each region’sleaders look at the issues that drive the devel-opment of their home regions or countries.
Current discussions centre upon the changeswrought in industry and society by the latest
generation of information and com-munications technology, especiallyInternet protocol digital communi-cations, broadband and person-alised services, and how both busi-ness and society are changing needto change as a result.
Connect-World’s next Global edition will focusupon the United Nation’s World Summit on theInformation Society – the WSIS. This event,organised by the ITU, will take place on 16 -18November in Tunis.
There, heads of state, ministers, regulators,government delegations, leaders of industryand international organisations from through-out the world will gather to finalise the plans– developed during years of preparatorymeetings – to realise a worldwide, universal,information society and provide a blueprintfor the building of a global information econ-omy.
Connect-World is inviting world leaders ofindustry and government, including heads ofstate and ministers, to share, in our Globaledition, their ideas about how the great goalsof the world summit can be realised, how theworld can go about building a truly globalinformation economy.
Connect-World’s WSIS global edition will, inaddition to our normal global mailing, be dis-tributed to all those attending the WSIS, aswell as to a substantial, select, list of worldleaders.
Fredric J. Morris, Editor-in-ChiefConnect-World
Connect-World Latin America Issue 2005 is published under Licence by WORLD INFOCOMMS LTDExecutive Office: Global House 12 Albert Road London E16 2DW United Kingdom
Tel.: +44 20 7540 0876 Fax: +44 20 7474 0090email: [email protected] URL: www.connect-world.com
All rights reserved. No part of this publication may be reproduced, stored in a retrievalsystem or transmitted in any form or by any means electronical, mechanical, photo-copying, recording or otherwise, without prior permission from the publishers. The con-tent of this Publication is based on best knowledge and information available at the timeof publication. No responsibility for any injury, death, loss, damage or delay, howevercaused, resulting from the use of the material can be accepted by the publishers or othersassociated with its preparation. The publishers neither accept responsibility for, nornecessarily agree with, the views expressed by contributors.
Connections
Editor-in-Chief:Fredric J. [email protected];Publisher:David [email protected];Managing Director:Valetta [email protected];Printers: Ricargraf Grafica e Editora Ltda
ISSN 1362-0525
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9555 James Avenue South, Suite 270, Minneapolis, MN 55431 • 952-929-4008 • www.nextnetwireless.com
DEPLOYED ON 5 CONTINENTS TODAY • NLOS PLUG-AND-PLAY • WIRELESS IP GATEWAY • SELF-INSTALLABLE CPENOMADIC: TAKE IT WITH YOU – ANYWHERE IN THE CARRIER’S COVERAGE AREA
© 2005 NextNet Wireless, Inc. All Rights Reserved. NextNet and NextNet Expedience are registered trademarks of NextNet Wireless, Inc. "WiMAX-Certified" is a registered trademark of the WiMAX Forum.
Creating Corridors of Connectivity WorldwideJumpOnline Anywhere
Our NLOS OFDM-based Expedience® system is the carrier’s choice for delivering broadband wireless services to SME and residential
subscribers on five continents today! In fact, our carrier partners are branding and distributing the NextNet Wireless IP Gateway today
through consumer electronics stores worldwide. What’s Fueling this mass-market acceptance? Maybe it’s the convenience of a wireless IP
gateway that supports all IP-compatible broadband applications. Maybe it’s the simplicity of a plug-and-play solution that doesn’t require
users to install software or to configure their computers. Maybe it’s the low-cost wireless backhaul support for Wi-Fi hot spots. But then
again, it might just be that the Expedience system has proven itself to our carrier customers, time and time again. If you’re looking for a
wireless alternative to cable and DSL, we can help. Our solution operates over licensed frequencies worldwide. As a principal member of
the WiMAX Forum™, NextNet is building high performance networks today for interoperability well into the future.
Call NextNet at 952-929-4008 or visit us at www.nextnetwireless.com.
Getting ahead in the battle for broadbandcustomers
In the past few years, the demand for broadbandservices – whether these services are offered viacable, DSL or wireless – has taken off. The globalbroadband market grew by about 40 per cent in 2004,according to the research firm Arthur D. Little,reaching 130 million households at the end of 2004.The research firm expects this fast growth to continue,with broadband reaching an estimated 370 millionhouseholds by 2010.
Wireless broadband also provides some other keyadvantages in comparison to wireline, such as speedof deployment. With wireless, customers can be upand running in days or even hours – versus the weeksand often months it takes to reach customers withwireline alternatives. And the role of wireless broad-band is about to become even greater with the emer-gence of WiMAX.
Getting started today
Industry players expect that the emergence of stan-dard WiMAX equipment will lead to even lower costsfor metropolitan wireless broadband systems. In fact,according to a survey conducted by the research firmMaravedis, the number one expectation for serviceproviders looking to deploy WiMAX is lower consumerpremise equipment (CPE) cost.
But there is no reason for service providers to waitfor WiMAX before testing the waters in broadbandwireless. The business case to deploy a fixed wirelesssystem is a solid one. And those service providersthat wait for WiMAX to deploy their wireless broad-band systems will find themselves significantlybehind in the race to secure customers.
That’s why many service providers are deployingbroadband fixed wireless platforms today. And savvyservice providers are making sure that they select aplatform that supports the same range of servicesthat WiMAX systems can support – not just broadband
access but also voice and video – and one that cansupport the evolution to WiMAX.
Once equipment based on the WiMAX specificationsbecomes available, Motorola will give operators theopportunity to evolve their existing networks toWiMAX and take advantage of the expected lowerCPE costs. In the meantime, by deploying a fixedwireless system, they will gain invaluable experiencein broadband wireless and will already have a built-incustomer base before many other players even enterthe market.
A look at today’s broadband wireless world
Of course, not all broadband fixed wireless systemsand equipment providers are alike. Some critical fea-tures to look for include:
A solid business case
When deploying wireless broadband systems, serviceproviders should not have to wait years to generate apositive cash flow from their systems. Cost-effectivesystems let service providers achieve a return oninvestment (ROI) within 12 to 18 months, and, attimes, even within six months. You can deploy yoursystem, and begin marketing it to customers, monthsbefore your competitors have even begun to installtheir WiMAX equipment.
A multiservice platform
Your broadband wireless network should be builtusing the same ATM frame structure that has beenspecified for WiMAX 802.16e. This type of structuresupports the quality of service (QoS) capabilitiesneeded for applications such as VoIP and video – serv-ices that many customers are already requestingfrom their broadband providers. In fact, many resi-dential customers look to reduce costs for servicessuch as voice to justify the expense of their broad-band services. By making sure that your networkalready supports these applications, you can marketa full service package to customers from day one.
MOTOROLA
WiMAX is coming:are you ready?
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"In the next five years, the wireless broadband market willexperience a compound growth rate of 44 per cent and beworth approximately US$3 billion by 2009. The more expert-ise that service providers gain by installing broadband wire-less systems today, the more prepared they will be to offerwidespread services once certified WiMAX equipment is avail-able, giving them a leg up on their competition as the marketgrows."
Emmy Johnson, principal of Sky Light Research
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A clear migration path
Ask most wireless broadband service providers, andthey’ll tell you that they want the option to eventu-ally migrate to WiMAX equipment. But, in doing so,they cannot afford to leave their existing customersbehind. Upgrading your broadband access points tosupport WiMAX should be as easy as switching out asingle unit – with no changes to existing customerpremise equipment. A good philosophy to follow is‘no CPE left behind’.
Unbeatable security
With today’s advances in technology, wireless sys-tems are just as secure, if not more secure, thantheir wireline alternatives. The equipment youchoose should have built-in security, preferably witha system such as DES (Data Encryption Standard)encryption. Customers should also have the ability toadd more stringent security precautions using stan-dards such as the AES (Advanced EncryptionStandard). The AES provides 128-bit encryption toensure totally secure data delivery and exceptionalreliability. With AES, it would take approximately149 trillion years – that’s older than the earth itself– to crack a code.
Ease of management
A network management system that can control sev-eral different types of wireless systems, from WiMAXand Metro WiFi to Broadband Over Powerline, is adefinite plus when it comes to saving time and
money on operations and training. No matter howyou want to deliver wireless broadband to a particu-lar customer, you should have the option of using onecentralised element management system to deployand manage network services.
Innovation
The metropolitan market is changing very quickly,with new innovations emerging every day. Take theconcept of Metro WiFi, for instance. Using a meshnetworking approach, WiFi hotspots can now beextended to offer contiguous coverage in a metro-politan area. Manufacturers with experience in thewireless arena are well positioned to develop net-work equipment that is on the cutting edge of newtrends.
Broadband networks are quickly becoming as vital asroads, water and electricity, and countries acrossthe globe are clamouring for ubiquitous broadbandservices today. Service providers that deploy equip-ment will gain the first-mover advantage in themarketplace, and get a big jump on their competi-tors.
That’s exactly why many service providers are usingMotorola’s Canopy™ Wireless Broadband Platform todeploy WiMAX services prior to the availability ofequipment based on the actual WiMAX specification.Designed to deliver on WiMAX’s promise today, theCanopy platform is built on an ATM frame structureto support a wide range of QoS-enabled services,including voice and video, at price points that areconducive even in rural markets.
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Motorola’s always-on, high-speed broadband Canopy platform is deployed by operators, government agencies and private enterprise in more than100 countries around the world. Additional information is available at www.motorola.com/canopy and at the online magazine Connections atwww.connectwithcanopy.com.
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by Edwin San Roman, Chairman of the Board, OSIPTEL, and President, REGULATEL
Public Internet booths in Peru: from the corporate marketto the community market
Ten years ago, Peru installed its first Internet booth to democratise public access toinformation. Today, more than 80 per cent of Peru’s population has access to theInternet through the booths and community centres. The project now provides directemployment for 60,000 people – more jobs than traditional telephony. There were nopublic subsidies. Small business owners invested close to US$100 million. A similarfarmers’ association’s project has drawn visitors from around the world to learn fromtheir experience.
Ten years ago, the Red CientíficaPeruana, the Peruvian ScientificNetwork, installed the first public boothin Peru with access to the Internet aspart of its project to ‘democratise’ accessto world information. It never expectedthat, ten years later, this system wouldenable more than 80 per cent ofPeruvians who have access to theInternet, to do so through those commu-nity centres. Neither did it expect thatthey would provide direct employmentfor more than 60,000 people – manymore jobs than provided by traditionaltelecommunications companies in Peru.
The small business owners who estab-lished the booths have invested an esti-mated US$100 million. The price foruser access is now only one per cent ofwhat it was ten years ago, from US$3 anhour in 1994 to only US$0.03 cents in2005 due to the competition generatedby free market laws. The most remark-able aspect is that they did not rely uponpublic subsidies.
Telecommunications in Peru haveevolved considerably during the pastyears due to an open market, adequateregulations and the entry of important
operators into the country. MorePeruvians, in the main cities, as well asin the provinces, now have access tophone services and the Internet.
Those in socio-economic strata A and B,as well as the corporate sector, enjoyservices comparable to those of anydeveloped country. Despite this growth,the low-income population does not yethave sufficient telecommunicationsservices.
The explosive growth in the number ofpeople who access the Internet throughpublic booths is a phenomenon, that isunique to Peru. An expansion of privatecommunity access, without externalhelp, has not taken place in any otherLatin American country or in any othercontinent.
This boom in public booths has meant alot to Peru. It has expanded public accessto new Information and CommunicationsTechnologies (ICT), since they can beaccessed by people of any socio-economiclevel. The booths are a platform thatoffer great potential and capacity to pro-vide programmes related to develop-ment and the fight against poverty.
This sui generis development in Peruwas the result of a huge, seven year long,promotional program of the RedCientífica Peruana. Access to theInformation Society was the group’smain objective. It analysed the reality oftelecommunications infrastructure inPeru, the costs of terminal equipmentand computers and the income of thegeneral population. It concluded that theonly way to provide widespread Internetavailability was to promote communityaccess.
At first, operating and service suppliercompanies regarded this business modelsceptically. It clashed with the businessmodels they used in every place theyoperated. They gave priority to residen-tial dial up access, which, in countrieswithout a fixed rate, they could bill forevery second or minute of connection.
At the end of the 90s, operating compa-nies discovered that promoting thedevelopment of community services is agood business that widens their marketsand gives society access to information.Studies of income and willingness to payconcluded that only 6 per cent of thepopulation could afford dial up access,
National development
Edwin San Román is the Chairman of the Board of Directors of the Organismo Supervisor de InversiónPrivada en Telecomunicaciones (OSIPTEL) – Supervisory Agency of Private Investments inTelecommunications in Peru. He is also the President of REGULATEL, the Latin America TelecomRegulators Forum established to encourage the cooperation and coordination of efforts among its mem-bers and promote the development of telecommunications in this region of the world.
Dr San Román is a professor at the Graduate School of the Department of Electronic Engineering at theUniversidad Nacional Mayor de San Marcos, professor at the Graduate School of the Master Programfor Public Services Regulation at the Pontificia Universidad Católica del Perú and professor at theElectronic Engineering Faculty of the Universidad Ricardo Palma (2005-I).
Edwin San Román earned a PhD in Electrical Engineering from the Royal Institute of Technology atStockholm, Sweden, and his degree in Electrical Engineering from the Universidad Nacional deIngeniería at Lima, Peru. He has taken several specialisation and training courses in Sweden, Germany,Japan, Canada and France.
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WiMAX Broadband Wireless Technology PartnershipsSolve the Unique Challenges of Latin America
Ileana joined NextNet in January 2002 and brings over 20 years’ experience in thecommunications industry. Ileana has been instrumental in helping NextNet to achieveNLOS broadband wireless market leadership in Latin America, including Mexico,Central and South America, and the Caribbean. Her expertise is in mobile radio forpublic safety, corporate communication, automation and control in the petroleum andother industries around the world. Ileana led the teams that completed carrier deployments in Mexico, Central America and South America.
Explosive Growth
Broadband Internet use in Latin America is exploding alongwith opportunities for service providers. In 2004 alonebroadband use grew 87 percent per Research andMarkets, May 2005. This same report cited a marked trendtowards the use of broadband wireless. According toInternet World Stats, March 2005 overall Internet use grew448 percent from 2000 to 2005. Despite this huge growth,this same report pegs overall Internet access at a low 10.5percent of the population.
A December 2004 Pyramid Research report forecastsbroadband use in Latin America to grow from 4.1 Million in2003 to 11.2 Million users by 2009––still only a relativelysmall part of the long term opportunity.
According to Maravedis BWA Analyst Adlane Fellah,“Developing countries in general need WiMAX. There is agreat demand for broadband services from online educa-tion to video chatting, VoIP and file sharing. The Internet isa vehicle for democracy and development and broadbandwireless access is its engine.”
WiMAX broadband wireless technologies offer unparalleledcapabilities to solve the unique challenges of LatinAmerican broadband delivery.
Unique Challenges
Service providers in Latin America face many of the samechallenges as firms in other regions but also some uniqueones.
People travel much more. Many families have relatives living in other countries—driving demand for voice services such as Voice over Internet Protocol (VoIP).
Teledensity is low, around 17 percent and fixed-line service is stagnating per Research and Markets. Wirelinebroadband networks are expensive to deploy, suffer distance limitations and are time consuming to build.
Many exclusive long-term telecommunications contractsare finally coming due. Competition is increasingly
by Ileana Mayer, Director of Latin American Sales, NextNet® Wireless, Inc.
permitted, opening up opportunities for service providersto seize huge segments of business if they can deploy fast.This requires reliable, well supported systems that support quick installation.
Primary bandwidth is expensive, requiring systems thatsupport economical, efficient IP services.
Latin American service providers need scalable technolo-gies to serve rural markets, island nations or huge moderncities.
Burgeoning growth fuels highly mobile industries such astrucking fleets, sales agents (real estate), construction,tourism and public safety services that have unique needsfor portable broadband access.
The geography and terrain in Latin America varies wildlysometimes within a few miles. Mountains are tall and treecover is lush, necessitating a non-line-of-sight (NLOS)technology that is robust and powerful.
Value of Partnerships
Explosive growth offers tremendous opportunities foroperators. Growth also requires large investments influ-encing operators to search for true vendor partners theycan depend upon for years.
Selecting vendor partners that are well funded, stable anddeliver superior technical service is crucial for LatinAmerican operators who must rely on these relationshipsfor the success of their businesses.
Mexico
In Mexico, MVS Net, which holds licensed spectrum (2.5 –2.7 GHz) covering over 67 million people, selected WiMAXForum™ Principal member NextNet Wireless to supply itsplatform. MVS Net is large enough to wholesale bandwidthto other Internet service providers.
MVS Net needed a system economical enough to scale tothe huge Mexico City market. MVS Net’s selected platformhad to be extremely efficient with IP transport. IP traffic has
NextNet Wireless • NextNet Wireless • NextNet Wireless • NextNet Wireless • NextNet Wireless • NextNet Wireless
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© 2005 NextNet Wireless, Inc. All Rights Reserved. NextNet and Expedience are registered trademarks of NextNet Wireless, Inc.
grown so much that from May 23 to June 10, 2005 MVSNet reported connecting over 22,000 VoIP calls per day.Since that time, MVS Net’s call volume has risen to 1Million calls per month (as of August 2005). MVS Net’sneed for mobile public safety service was very pressing.
MVS Net ultimately chose NextNet because itsExpedience® system provides high performance and reliable NLOS service, plus the fact that NextNet is a verysupportive vendor partner whose products are alignedtoday with the features promised by mobile WiMAX.
Puerto Rico
Broadband Internet Via Air (BIVA), a subsidiary of Digital TVOne cable, launched in San Juan in July of this year usingthe NextNet NLOS plug & play solution. The company'sinvestment of US$8 Million for both operations and infrastructure is significant.
"In this business we have dealt with enough suppliers tolearn that their products most often perform below whatthe sales reps claim. NextNet has so far delivered exactlywhat they promised in specs performance, pricing, projec-tions, delivery schedules and new product development.They are great to work with,” commented José Sala, general manager of BIVA
At launch its network already covered twenty-five percent of the metro area And BIVA has already garneredseveral hundred customers and reported great excitement.
BIVA partnered with NextNet due to its solid NLOS performance through lush tree cover and its no truck rollinstallation capability—customers can self-install. The factthat NextNet systems had maintained 90 percent connec-tivity during hurricane season in Florida this past year wasa factor. Protecting a significant investment was a para-mount consideration.
BIVA cited the potential for its customers to eventuallyroam onto any NextNet system in any country as an espe-cially exciting future possibility.
Cayman Islands
Westtel which is an independent affiliate of WestStar TV,discovered the NextNet system last year when its CTOMichael Edenholm evacuated during a hurricane toJacksonville, FL. He needed connectivity to monitor repairs.Only NextNet’s parent company Clearwire, itself a broad-band wireless provider, could provision him fast enough.
He was so impressed with Clearwire he decided to re-fixturehis existing first generation system which was cumber-some to work with and did not offer NLOS performance.
“We can add additional capacity where it’s needed andgrowth is easier,” said Edenholm. “A huge advantage for usis how easy the system is to manage on the back end andtechnical support on the three calls we made was just outstanding.”
Having a vendor partner with a wireless provider ownerwhose operation it could visit was a big deal for Westtel.
“We can tell that the NextNet product has been influencedby Clearwire’s experience in the field,” said Edenholm. “Wecan install a tower site in under a day and our customerprovisioning has gone up fourfold.”
Edenholm explained its demand was so high that towersites fill up within about two weeks of installation. Ease ofuse and installation are crucial. The company has four sitesthat blanket Grand Cayman Island and plans seven in total.It plans service on the other two islands this year.
For Westel numerous challenges abound.
“The biggest thing for us was that gear had to be costeffective in a small market,” explained Edenholm.
Edenholm reported high demand for mobile services fromconstruction crews and will soon launch services for touristvisitors. It has made proposals for public safety systems.
“We are comfortable that NextNet’s system already possesses all of the mobile capacity that Certified WiMAXgear will have,” said Edenholm.
The Future Realized
NextNet’s Expedience system provides the foundation forWiMAX tomorrow, and is the best fit for solving the uniquechallenges of Latin America’s geography, growth, andservice demand today.
NextNet’s system provides commercially proven NLOSperformance, portable and mobile capability and an afford-able, scalable product that solves the real world problemsof service providers.
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National development
12 per cent of households could affordaccess using XDSL or wireless technolo-gies, but 60 per cent of Peruvian house-holds could afford access through com-munity centres. The booths have, inpractice, become learning and trainingcentres where young and, now, evenolder people go to learn how to use theInternet and discover its huge potential.They become intensive users and lateron, if financially feasible, they acquiretheir own private home service.
The Peruvian experience can serve as amodel for telecommunications serviceproviders whose business models focusonly on the corporate and home sectorsand do not consider the huge possibili-ties of community sector oriented busi-ness. In developing countries, althoughmost low-income people cannot affordresidential service they still need to com-municate. By giving them access to serv-ices they can pay for only as when andneeded, we can significantly expand themarket. Peru’s experience with publicInternet access proves this businessmodel works.
Public booths are not only a develop-mental alternative. They have stimulat-ed parallel industries such as computerassembly and software development, aswell as other services that generateemployment and development opportu-nities for Peru.
The booths can also provide Internetbased national and international long-distance calling at greatly reducedprices. Nowadays, Internet telephony,Skype, for instance, has become espe-cially popular in countries with low fam-ily income and high migration, as a wayto keep in touch with relatives andfriends.
In Peru, as in other countries, given therecent improvements in quality, some
public booths already offer long distanceInternet-based voice services, or Voiceover Internet Protocol (VoIP).
What else can we expect? What newapplications and developments will theInternet bring in the coming years? Wecannot answer that yet, but until some-thing better arrives, public booths arethe best way to bring massive Internetaccess to low-income populations inurban and rural areas.
Public booths for ruralcommunities?
The number of public Internet boothshas grown not only in Lima, the capital,but also in many rural areas. Such is thecase of the booths promoted by FITEL,the Telecommunications InvestmentFund administered by OSIPTEL.FITEL’s main objective, as a matter ofsocial interest priority, is to financetelecommunications projects in ruraland impoverished urban areas that lackInternet access.
In the village of Challhuahuacho, locatedin the Cuzco region (or departamento) ofthe Peruvian Andes, a private telecom-munications company, with financialsupport from FITEL, installed a publicsatellite telephone and an Internetaccess booth – both are heavily used bythe local population.
This booth was installed in 2003 andlocal villagers call it the Telecentro. TheChallhuahuacho´s Telecentro also has apublic library with a small collection ofliterature donated by benefactors. Thelibrary has about 20 video cartoons usedto stimulate small discussion groups forchildren on a variety of subjects. The dis-cussions help to develop the children’sanalytical skills and values. The library’sbooks are also lent to neighbouring vil-
lages. The librarian walks for more thanthree hours with books under his armsto reach the furthest communities.When he arrives, children sit aroundhim as he reads short stories and histo-ries. He reads in Quechua, the languageof the Incas, in order to encourage theirinterest in reading. This is an example ofhow access to information in rural andpoor areas promotes the integration ofcommunities and improves local livingconditions.
Cajamarca, with 1,3 milion people, is thethird most populated region in the coun-try. It has a preponderantly rural popu-lation (75.3 per cent – the national aver-age is 29.9 per cent). It is also one of thefive poorest regions. The arrival of tele-phone services in several of its districtcapitals has stimulated significantprogress during the past years.
One of the most successful projects is theINFODES project that implementsInfocentros or public Internet accessbooths. The project receives financialsupport from the FITEL fund.
INFODES, led by ITDG, theIntermediate Technology DevelopmentGroup, was initiated to implement arural information system. ITDG plannedand developed an experimental ruraltelephony project with FITEL’s support.INFODES implemented six informationcentres that provide Internet and tele-phone services. Within 30 months, thesystem must become self-supporting.
It is interesting to see how a local infor-mation and communications market isgradually built. It starts by training localbusinessmen to use the ICT infrastruc-ture (Internet, radio, telephony, library,etc) and by exploring new ways to helpthe local population.
A project similar to the one in Cajamarcahas been implemented by a group offarmers from the Huaral-Chancay val-ley. The local farmers association led theimplementation of twelve ruralTelecentros throughout the valley. Theresults, after only six months, are quiteencouraging. Most of the Telecentros arebeing used by the local population, espe-cially by younger people. The farmershave become famous for their project.They now receive visitors from otherPeruvian valleys, international expertsfrom the World Bank and Africanauthorities all interested in learningfrom the Huaral experience.
Based on these results, FITEL is imple-menting another broadband project thatwill give the people of 3,010 rural com-munities throughout the country accessto the Internet and to telephone services.This project will cost about US$15 mil-lion, but it will benefit some 2.5 millionpeople.
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Figure 1: The number of public Internet booths has grown not only in Lima but also in many ruralareas.
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by Carlos Carnevali, Vice President Latin America, Cisco Systems
Net impact in Latin America
Organisations that have sophisticated network and technology infrastructures and usenetwork-enabled applications tend to do better than organisations that do not.Businesses see technology as a way to improve customer satisfaction, reduce costs andboost revenues. Latin American companies lag in broadband usage and tend to introduceadministrative systems prior to automating customer service functions. Investments inICT increase productivity, but Latin American companies invest only 1.38 per cent of theGNP, compared to 5.25 per cent in the USA, and this hobbles growth.
The conditions for accelerated and sus-tained economic growth in LatinAmerica over the next few years are inplace, and success will depend on theintelligent cooperation of governments,the business community, labour, acade-mia and the citizenry at large. The eco-nomic security and well-being of theregion will rise rapidly over the nextdecade as governments maintainmacroeconomic stability, and pursuederegulation and global integration,while removing barriers to productivity.
To enrich the debate about the strate-gies that will make this growth possible,we commissioned a wide-ranging studyof connectivity in the region, Net Impact2005 Latin America, from MomentumResearch.
The study provides valuable informa-tion and insights about the current stateof technology and connectivity of busi-nesses in the region. It analyses theirinvestments in the area, and examineswhat they expect to gain from increasedconnectivity. The study also sheds light onurgent course corrections needed toimprove connectivity in the region.
The guiding assumption in Net Impact2005 is that organisations that usenetwork-enabled applications havemore sophisticated network and technolo-gy infrastructures and align businessprocesses with their technology invest-ments, will see better operating resultsthan organisations that do not do so.
In addition to tracking Latin Americanorganisations’ adoption of previouslyidentified best-practices, Net Impact2005 also seeks to understand: (i) thebusiness conditions leading LatinAmerican organisations to invest intechnology to enhance productivity; (ii)perceived barriers to technology adop-tion and future productivity growth; (iii)current levels of achieved improve-ments in business outcomes.
One of the key results of this study is notonly the ability to compare best practiceadoption rates across Latin America,but also to make industry-level compar-isons with adoption rates in the USAand Europe where possible.
In this way, Latin American organisa-tions will have several reference points
to benchmark their progress againstconsistently identified productivity bestpractices.
Among the many significant findings inthe report, several deserve special atten-tion:
A majority of organisations reportimprovements in last 12 months
Overall, most organisations feel thattechnology has had a positive impact ontheir operations in the last 12 months:
- 70 per cent of organisations reporttechnology has helped improve cus-tomer or citizen satisfaction by an aver-age of 32 per cent;
- 45 per cent of organisations have seena reduction in operating costs by anaverage of 15 per cent;
- 32 per cent of organisations have seenan increase in revenue by an average of11 per cent (Figure 2).
Increasing satisfaction the leadingdriver of technology investment
National development
Carlos Carnevali is Cisco’s Vice President for Latin America. He is in charge of all Cisco operations inLatin American countries, from Mexico to Argentina. Mr Carnevali, previously Managing Director ofLatin American South (Brazil, Argentina, Chile, Peru, Uruguay, Paraguay and Bolivia), brings morethan 11 years of experience to his current position. As the first Cisco employee in Latin America, he beganCisco’s operation in Brazil and then integrated Cisco’s South American operation into a single region. Hebegan his career in England, with Plessy Telecommunications, where he rose through the ranks toassume responsibility for the Asian, African and Latin American markets.
Carlos Carnevali earned his degrees in Electronic Engineering and Administration at MackenzieUniversity, in São Paulo, and in Marketing from the University of Stanford.
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National development
The desire to improve customer or citi-zen satisfaction was the most frequentlycited driver of technology investments(52 per cent), followed by the desire tobe more competitive (46 per cent).Unlike the USA and European studies,there is no dramatic drop-off in the fre-quency between the top five driversidentified by Latin American connectedorganisations.
This suggests that the need for achiev-ing competitive advantage by accelerat-ing organisational speed, improvingcustomer satisfaction or lowering costsis more universally felt in the LatinAmerican market.
Latin American organisations lagbehind USA companies in bandwidth
The majority (62 per cent) of LatinAmerican connected organisationsreport an average connection speed of128-768 kbps. Latin America organisa-tions lag behind USA companies in thebandwidth investment needed to handlea greater flow of data. From an industryperspective, Latin American financialservices organisations are the most like-ly to have true broadband connectionswith approximately 26 per cent havingE1 or greater average bandwidth.
Latin America shows waves ofapplication adoption
Connected organisations in LatinAmerica tend to focus first on introduc-ing back-office applications such asfinance and accounting, humanresources and inventory managementtools before shifting to front office orcustomer-facing applications.
Across industries, Latin American con-nected organisations have adoptednetwork-enabled applications at rela-tively consistent levels.
Applications in Latin America aregenerally web-enabled
Approximately two-thirds of networkapplications in connected organisationsin Latin America are web-enabled. Thisfigure does not include web portals that,by definition, use Internet technology.
Primary technology focus is internal
The majority of organisations (62 percent) are focusing their technologyinvestments to provide or automateservices within the organisation. Onepossible explanation for the low numberof organisations automating servicesoutside their firewall is that the technol-ogy infrastructure and business/con-sumer attitude toward technology maynot yet have the critical mass to justifyefforts in that area.
Majority provide externalnetwork access to employees
Sixty per cent of Latin American con-nected organisations report that theyprovide external network access tointernal users such as off-site employeesand staff members.
Employee access lower in LatinAmerica compared with USA
Financial services organisations providethe highest level of access (68 per cent)for their employees when comparedwith other sectors. Public sector organi-sations provide access to fewer employ-ees (52 per cent), but are still somewhatahead of connected organisations inmanufacturing (42 per cent) and retail(46 per cent), which probably have moreemployees who do not require dailyaccess to a computer or organisationaldata.
Security technology important inLatin America, but not ubiquitous
The networking technologies adoptedmost by Latin American connectedorganisations are focused on networksecurity, 81 per cent report they haveserver-based virus protection and 72 percent report using network firewalls.While these are healthy numbers, theyalso suggest that 20 to 30 per cent ofLatin American organisations have nobasic network security infrastructure inplace.
Voice over IP is accessible in LatinAmerica
Adoption of Voice over IP technologyamong Latin American connectedorganisations (32 per cent) is well aheadof where USA companies were two yearsago (18 per cent adoption), suggestingthat several of these technologies havebecome more mainstream and moreaccessible at a reasonable cost.
Customer satisfaction is the first goalfor technology to achieve in the next12-months
Improving customer or citizen satisfac-tion is the most frequently identifiedtechnology goal, with 58 per cent of allconnected organisations reporting it asa goal for the next 12 months, followedby reduction of operating costs (50 percent).
Lack of worker training is perceivedas the leading obstacle
Like their USA counterparts, 44 per centof Latin American connected organisa-tions consider the lack of employeetraining the most frequently encoun-tered obstacle to implementing new
technology. The lack of worker trainingwas most frequently cited by LatinAmerican manufacturing organisations(48 per cent) and least frequently men-tioned by financial services (33 per cent)companies. This variation undoubtedlyreflects the different skills required inthe two areas.
It is no secret that investments in infor-mation technology (IT) have been par-tially responsible for increases in pro-ductivity – defined as the amount ofproduction per unit of labour, equip-ment and capital – in the USA economyover the last decade. Companies withhigher-than-normal investments in IThave reported productivity increases ofup to four times those of companieswith below-average investments in thisarea (Economic Report to the President,January 2001).
In Latin America, IT investments lag farbehind those in the United States andother parts of the world. While they rep-resent 5.25 per cent of Gross NationalProduct in the USA, 3.50 per cent inEurope and 2.40 per cent in Asia, inLatin America they represent a mere1.38 per cent of GNP. This hobbles theregion’s growth.
If both businesses and governments ofLatin America were to invest in infor-mation technology at an acceleratedrate, they could quickly build up theirbusiness by automating their processes,decentralizing their structure, improv-ing their teams and increasing their pro-ductivity while generating growth. Thiswould inevitably improve the quality oflife for millions of people.
This improvement in productivitywould have a direct impact on LatinAmerica’s overall standard of living.According to the US Bureau ofEconomic Analysis (BEA) and the USBureau of Labor Statistics (BLS), anannual increase in productivity of 1 percent would cause a given country’s stan-dard of living to double every 77 years. Ifproductivity increased 3 per cent eachyear, the standard of living wouldincrease with every generation. If pro-ductivity increased 5 per cent annually,the standard of living would doubleevery 14 years.
An improved communications infra-structure, together with increasedbroadband, can enable great improve-ment in the quality of life in LatinAmerica by driving its economic growth.
Latin America will be a region of rapidgrowth over the next few years and stud-ies such as this will help to better under-stand the impact of technology invest-ments on the productivity and growth ofour businesses and countries.
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by Adilson Antonio Primo, President and CEO, Siemens, Brazil
Latin America – ready for the Mobile Internet?
Although the cost of mobile voice has dropped dramatically in past years and the markethas grown apace, mobile data, the Mobile Internet, has grown slowly in developing coun-tries. This is due both to the cost of the equipment and to the cost of mobile data trans-mission, which can be hundreds of times more expensive than with fixed data lines. Lessexpensive equipment and government support would speed mobile data growth and helpreduce Latin America’s social and economic inequalities.
Adilson Antonio Primo is the President and CEO of Siemens in Brazil and of the Siemens Group for theMercosur Region. He began his career as an intern in Siemen’s power generation and distribution sec-tor in Germany and rose to his present post through a series of increasingly responsible executive posi-tions. Mr Primo has served as an executive or board member for many organisations, including, mostrecently, as the Vice President of the Brazilian German Chamber of Commerce and Industry, as aMember of the Superior Council for Political and Social Orientation of the Federation of Industries of theState of São Paulo (FIESP) and as a Board Member of Epcos do Brasil.
Adilson Antonio Primo earned a Bachelor's Degree in Electrical Engineering from Escola Federal deEngenharia de Itajubá (EFEI), in Minas Gerais, Brazil.
Mobile Internet
At times of great technological changeand disruption, it helps to base discus-sions of the future upon simple con-cepts and ideas. In this context, one ofthe best definitions for the MobileInternet is the InternationalTelecommunications Union’s (ITU)Portable Internet vision.
The ITU forecasts a scenario whereusers will have advanced portabledevices to communicate ‘everythingover IP’ including local and interna-tional calls, emails, portable TV recep-tion and videoconferencing. Suchdevices, with ‘multi-gigabyte’ memo-ries, will connect to servers and oneanother through intelligent networkswith multiple air interfaces, at speedsranging from 250 kb/s to 50 Mb/s.The Mobile Internet, then, will consistof a bundle of systems.
Communications in LatinAmerica
The last five decades in Latin Americawere spent building a basic infrastruc-ture for fixed voice communications,but the projects were never complet-
ed. Today, the basic infrastructureprojects continue in the form of uni-versalisation projects that bringtelephony to less developed localitiesin remote areas.
There are relatively few users in theseregions, and they are scattered amonggreat numbers of small, distant, vil-lages. Since the cost of reaching themcan be high, unconventional low-costsolutions, such as the soft switch con-trolled DVB-S satellite access especial-ly developed for the region, have beensought. In Brazil, basic fixed voicecommunications now serve almost 80per cent of the households.
Twenty-five years ago, analoguemobile communications were intro-duced in the region. Nevertheless, in1990, users of this service still had topay US$20,000 for a ‘brick-phone’ inthe city of Rio de Janeiro.
By the end of the decade, the replace-ment of the state monopoly by a duop-oly and the introduction of secondgeneration (2G) TDMA mobile digitalsystems brought great cost reductionsand dynamic growth.
The arrival of the cheaper GSM stan-dard, and the growth of competitiondue to the licensing of new operators,promoted a huge wave of growth.
Latin America’s largest economiesnow have a penetration rate of 30 percent. According to an UMTS Forumstudy, market saturation will occur atabout 50 per cent penetration. Abouthalf of Brazil’s 5,500 municipalitiesnow have mobile service.
By the middle of the 90s, fixedInternet service began to arrive.Today, penetration of dialled access isgreater than 10 per cent in Brazil, butbroadband is a luxury available in only5 per cent of households.
Inequality in Latin America
Latin America is among the regionswith the highest inequalities ofincome, power, influence, access tojustice and the like on the entire plan-et. In Latin America, the richest 10 percent of individuals earn 48 per cent ofthe income, while the poorest 10 percent earn just 1.6 per cent. The
16
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Mobile Internet
extremely low averageincome of the regionaggravates the situation.
The roots of this inequalityare complex and deep, andits continuance signifi-cantly affects sustainedgrowth. Historical datashows that although cyclesof economic growth reduceinequality, when theinevitable downturnoccurs, inequality increas-es once again. Those at thebase of the pyramid are toovulnerable to defendthemselves from majorlosses during economic crises, andthis further decelerates the economyas a whole.
The growth of the global economy,driven in part by the Internet, haswidened the divide between the smalland medium sized enterprises thatcreate most of the jobs and the largercompanies. The larger companies usethe Internet to grow in step with theglobal economy, the smaller compa-nies make little or no use of theInternet and grow, if at all, at a muchslower rate.
The general level of education in LatinAmerica is also disturbing. Studiesshow that functional illiteracy is ashigh as 75 per cent. This affects thequality of human capital, the rawmaterial of the Information Society,and the use of the Internet applica-tions that are its tools.
Latin America’s structural problemsdelay its development. Although larg-er companies, and certain sectors ofthe Latin American economy, soonalign themselves to Internet para-digms, the greater part tend to lagbehind, only adopting its solutionswhen they become commodities andno longer provide competitive advan-tages, but are mere necessities.
Given that mobile communicationspenetration in Latin America is nowmuch greater than that of fixed, par-ticularly among lower income groupsand smaller businesses, it would seemthat the spread of affordable MobileInternet access would be an importantway to reduce economic inequalities.
Mobile Internet start-up
At the beginning of 2004, when WiFibased Mobile Internet usage began,studies found less than 1 million lap-tops, mostly for corporate use, in
Brazil. Accordingly, the disappoint-ingly low revenue projections, lessthan 0.1 per cent of fixed and mobileoperator incomes, reduced interest inhot-spot building and operation.
The situation is still much the same.The barrier to aggressive MobileInternet rollout is the high cost of lap-tops and mobile user terminals. WiFiis still a niche market in Brazil. It willremain so until prices drop for WiFienabled equipment.
There are almost a thousand hotspotsin Brazil; about 70 per cent of themare concentrated in airports, bars, cof-fee shops, etc, in the state of SãoPaulo, the wealthiest part of the coun-try.
In addition to WiFi hotspots, MobileInternet connectivity is also providedby 2.5G cellular systems using GPRS,EDGE and 1xRTT data technology.
Again, the problem is not access tech-nology, but the high cost of the userequipment and the high cost – hun-dreds of times higher than in the fixedaccess – per MByte transmitted.Consequently, income for data servic-es remains low, only 1 per cent to 2 percent of total operators income, exclud-ing SMS, and investment in rollout ishard to justify.
In Brazil third generation (3G) licens-ing in 2GHz band is under discussionby local authorities. The barrier to 3Gadoption is not the cost of a laptop,but the cost of the intelligent termi-nals needed to use it.
A 3G terminal costs, on average,U$450. A Nielsen study shows that atthis price, only 0.1 per cent of mobileusers would adopt the new service,discouraging the fast development ofthis newest Mobile Internet option.
We could continue to analyse MobileInternet options, but mass-market
development will alwaysface the challenge of reduc-ing the cost of the relatedequipment.
Accelerating themobile Internet
Despite the terminalequipment cost barrier,there are ways to acceler-ate regional adoption ofthe Mobile Internet:
Initiatives undertaken indeveloped countries
According to Prahalad, the author ofThe fortune at the bottom of the pyra-mid, there are some unconventionalprojects emerging for the first time onthe horizon:
- Nicholas Negroponte and the MITMedia Lab are developing a U$100 lap-top for people in emerging economies;Chinese and Brazilian authorities areinterested;
- EMH, the Emerging Market Handset, isa GSM Association project that encour-ages manufacturers to develop and sellsimple, robust, handsets selling for U$30by 2006. The incorporation of simpleemail and Internet access services isexpected to follow.
Local government support
There is always hope that regionalauthorities will support Internet adop-tion by means of tariff and tax reduc-tion and subsidised projects.
The Mobile Internet is surely one ofthe most important, and exiting,Internet developments. Developedcountries are rapidly adopting it. InLatin America, the most significantbarrier to wider usage is the high costof the terminal equipment.
Initially, the equipment manufactur-ers need to focus on corporate andother high-income segments. Lessexpensive 2.5G equipment is slowlydeveloping into a flourishing massmarket. This, in time, will pave theway for the successful introduction of3G and other more sophisticated tech-nologies.
If the short term is a bit disappointingfor Mobile Internet, the long term isvery bright.
Figure 1: The ITU forecasts a scenario where users will have advancedportable devices to communicate ‘everything over IP’.
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by Wagner Ferreira, President, Lucent Technologies, Brazil
True convergence, building digital communications
Full convergence of access, networks, content, equipment, features, applications – youname it – has long been a goal of revenue hungry, competition driven service providersand a dream for the consumer. Multifunction equipment hardware convergence and theconvergence of services made possible by IP Multimedia Subsystems architecture will,finally, after years of hype, make it possible to fully personalise communications andprovide a blended experience fully in tune with the user’s lifestyle, at home, at work andat play.
Wagner Gonçalves Ferreira is the President of Lucent Technologies in Brazil. Ferreira joined LucentTechnologies in Brazil as Mobile Solutions Sales Manager. Later, as Director, he was responsible forsome of the largest Lucent accounts in Brazil. Mr Ferreira started his career at Cobrasma, asTelecommunication Network Project Supervisor. From there, he joined the AT&T Network SystemGroup, as a Project Coordinator. He also worked for Machline Tecnologia de Telecomunicações (MTT),as a Project and Engineering System Manager for SID Telecom and Controls.
Wagner Ferreira graduated in Electrical Engineering from the Escola de Engenharia Mauá de SãoPaulo, in Brazil. He earned his MBA from Fundação Getúlio Vargas.
Service convergence
There have been many discussionsrecently about convergence and theinfrastructure required for the inte-gration of diverse terminals, wirelineand mobile telephones, PCs andPDAs. Currently, however, most ofdiscussions of convergence areabstract. They do not touch the sub-stance of how to provide real benefitsto the end-user of digital communica-tion services.
For several years, convergence provid-ed a broad vision for future develop-ment, but fell short in terms of marketdeliveries. Today, convergence isbeginning to offer real benefits to themarket and the end-user.
Each user of telecommunication serv-ices has his own definition of conver-gence, a definition that depends on thecustomers’ legacy platform and theirexclusive competitive overview, whichhas an impact on the diversity andcomplexity of options not managed bythem.
How to choose a service provider?How to find the right services andsolutions? And, perhaps most impor-
tant of all: what benefits can these var-ious solutions bring us? In the nextten years, communication technolo-gies will anticipate, and be able toanswer, all our needs, simplifying theend-user experience while offeringadvanced services to drive consumerdemand. A new generation of commu-nication technologies will enable sim-ple, secure, seamless and personalisedservices, with mobility and privacy.
This reality brings companies a needto anticipate market demands, whilerespecting the user’s individuality.Considering, also, that each consumerwill interact with this new marketreality in a personal way, convergencewill not have just one exclusive defini-tion.
True convergence, then, will have tobe defined from an end-user perspec-tive. To be truly effective, convergencewill need to interpret the real needs ofthe subscribers, positioning itself as auser in order to offer simple, secure,personalised and mobile solutions.The key to understand the end-userperspective is that it is based upon dif-ferent blended lifestyles.
As our purchasing behaviour becomesincreasingly personalised, communi-cation service profiles will also have tochange. End-users choose servicepackages oriented to specific targetgroups, but personalise them byadding the services that they wantfrom multiple service providers.
There are new solutions to meet thiscustomised demand such as ‘LiveWire’, which makes it possible toselect any sort of content, such assongs, news, short videos, TV orbooks-on-demand through mobileterminals, IPTV (digital TV), and‘Active PhoneBook’ – a personal direc-tory that unifies telephone numbers,email addresses, Instant Messaginglists, Internet and video contacts.Everything is accessible to the userseamlessly across mobile or wirelinenetworks.
In addition, there are intelligent toolsthat let subscribers monitor theirhome security systems through mobileterminals, and to receive real-timedata updates via live videos. Solutionssuch as the ‘Activity Agent’ give usersthe ability to organise their day-by-
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Service convergence
day activities based oninformation availableabout highway andtraffic conditions,market opening hoursand special promo-tions from theirfavourite stores.
All of this will meetthe growing demandfor high-speed andintegrated services.People wish to accesscommunication serv-ices 24 hours a day, athome, at work or intheir cars. They wantto be able to take pic-tures and send themto their friendsthrough email asinstant postcard images. They wish todownload their favourite songs andvideos, but they want protection fromspam and hackers. Despite the prolif-eration of access terminals, servicesand networks to support their traffic,users expect simple, secure, seamless,personalised and portable communi-cation services that are manageableand do not disturb their lives.Technology must make life easy, notcomplicated.
What are the real benefits of imple-menting an infrastructure able to con-nect any application server to any ter-minal, anywhere and to supply highlypersonalised resources? From the enduser’s point of view, it is the ability toaccess a high-level user communica-tion experience at any time, from anyplace.
Considering that, these servicesshould add value to meet the particu-lar needs arising from differentlifestyles. They should offer real value,making it possible and easy to realizeday-to-day activities. These servicesshould bring convenience, efficiencyand new capabilities to the user’s com-munications package and be easilyand quickly integrated into the sub-scriber’s daily life.
The services in such a scenario canbring additional voice and data trafficto the service provider’s networks, aswell as additional opportunities togenerate revenue and assure userfidelity. We call these blended lifestyleservices.
To meet subscriber expectations,these services should be very easy tounderstand and to use, and be accessi-ble anywhere, in a manner that meetsthe subscriber’s needs. If the current
operator cannot offer these conditionsof use, users will jump (churn) toanother service provider that can meetthese needs.
Companies need to find ways to con-tinuously improve their customer sup-port, differentiate their service offer-ings from their competitors’, buildpositive reputation in the marketplaceand develop client’s brand loyalty.
Just as customers need product sup-port, they also want the operators toanswer their needs and fast solutionsfor their requirements.
Based on that, the convergence visionshould contemplate complexity reduc-tion. Service providers are expected tooffer advanced services in order tokeep and to attract both the mostsophisticated of the new generation ofcustomers, as well as those who arelooking for a simple, secure, person-alised and portable communicationsexperience. To these end-users, thismeans not only Voice over IP (VoIP),and low costs, but also the realizationof true IP value.
A concentration on value gives opera-tors the ability to develop personalised
communications expe-riences aligned withseveral ‘blendedlifestyles’, bringing thefunctionality of thenetwork directly to thecustomer.
In the past, communi-cations brought peopleto the network. Today,it tailors the networkto them. From theoperator’s point ofview, a true valueproposition means theability to attract and topreserve high-valuecustomers through thefast and easy introduc-tion of new services inthe market. From the
subscriber’s side, value can be trans-lated as the arrival of ‘blended lifestyleservices’ through an individualapproach. The relationship betweenend-users and service providers isbased on trusting that these advancedand personalised services will alwaysbe readily available.
One vision of IP-based value is cen-tred upon equipment, software andservices integrated in three networklevels: the transport level for end-useraccess; the services control level fordifferentiating features; and the appli-cations level for fast introduction ofnew advanced, revenue generatingservices. This extended solutionspackage, products, software and serv-ices, together with marketing, canhelp the operators offer true conver-gence by building digital communica-tions networks that provide personalised‘blended lifestyles’ to the end-user.
Operators interested in creating IPbased value need to consider the newopen-standard architecture capable ofenabling advanced services: IMS/IPMultimedia Subsystems. With IMSarchitecture, it is possible to create anindependent, access agnostic, always-on network. IMS lets operators offerreal value to their customers, facilitat-ing the introduction of advanced,high-speed services.
Actually, this is only the first step todeliver voice, data and video conver-gent services. The development ofconvergent services will truly reach itstarget through customised servicesthat allow every customer to adaptcommunications to their specificneeds. We have been hearing aboutconvergence for some time, but onlynow is there a true way to show its realbenefits to end-users.
‘To be truly effective,convergence will needto interpret the realneeds of thesubscribers, positioningitself as a user in orderto offer simple, secure,personalised and mobilesolutions.’
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Figure 1: People wish to access communication services 24 hours a day, at home, at workor in their cars.
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by John Everard, CEO, Newport Networks Ltd
Next generation network evolution – finding the path
To face competition and meet customer needs, most operators will migrate to NextGeneration Networks (NGNs). To protect their investments, they need flexible infra-structures that can evolve with the standards while meeting their immediate needs. TheIMS (IP Multimedia Subsystem) standards are defining NGNs. IMS provides the flexi-bility to introduce the VoIP services operators need to generate the revenues during themigration to NGN, and customers will be rewarded by the introduction of an increasing-ly rich, accessible, range of services.
John Everard is the CEO and co-founder of Newport Networks. He previously held senior positions withNewbridge Networks, for over a decade, establishing Newbridge Information Systems before takingresponsibility for its operations in Europe, Middle East and Africa. Before that, Mr Everard played amajor role at Mitel, becoming Vice President and General Manager, EMEA. He has also served asChairman of Telspec Ltd. Much of his early experience was gained at the British TelecommunicationsResearch Department and Bell Northern Research in Ottawa, Canada.
John Everard holds a BSc Honours degree from the City University, London, and an MSc from theUniversity of Essex.
Next generation networks
If you’ve been following the telecom-munication press recently, you wouldbe forgiven for thinking that IMS (IPMultimedia Subsystem) will revolu-tionise communications networksovernight and usher in a new era ofubiquitous multimedia services. Inreality, standards and networks willevolve over a period of time to achievethis goal.
Operators in Latin America are takinga pragmatic approach to the rollout ofnew infrastructure, to ensure thattoday’s deployments are IMS ready.This approach optimises an operator’snetwork investment.
IMS permits service implementation,independent of access type, so that asingle service can be delivered to a widerange of terminals. Consequently, serv-ices can be developed and deliveredmore quickly and delivered to a largermarket. This reduces the operator’srisk and provides end-users with agreater range of competitively pricedservices.
It is a win-win situation, but how dowe get there? To answer that question
we need to examine the operator’sneeds, and what is driving the movetowards Next Generation Networks.Today, there is a need to deploy sim-ple, competitive VoIP services thatwill generate a sustained revenuestream and ensure the operator’splace in the competitive and evolvingVoIP marketplace. At the same timestandards are evolving to define theNext Generation Network (NGN), ahuge undertaking in itself.
First, let’s take a look what an opera-tor needs today.
Immediate operator needs
Today, operators are addressing theimmediate need to deploy VoIP (Voiceover IP) and MoIP (Multimedia overIP) services to business and residen-tial customers. This means dealingwith problems such as service reach,service reliability, security and inter-connection.
Building an infrastructure that candeliver these capabilities is underwayright now, with operators in Brazil and
Mexico taking a slight lead with theirIMS plans. The key to the long-termsuccess of the new services willdepend on the ability of the underly-ing infrastructure to adapt to theevolving IMS standards.
Effective session control is at the heartof solving these issues. This has led tothe widespread adoption of SessionBorder Controllers (SBCs) to providesolutions to these problems. SBCs typ-ically consist of two primary function-al elements, a signalling element and amedia element, hosted within a singledevice. They handle the relationshipbetween the separate signalling andmedia paths that characterise VoIPand MoIP calls. This enables them toaddress issues in both the access net-works and the interconnectionbetween networks.
In an access network, SBCs increaseservice reach by allowing access tocustomers behind NAT or NetworkAddress Translation, devices, thusincreasing the potential subscriberbase. SBCs can police the calls beingadmitted to the access network to pre-vent overbooking of resources and
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Next generation networks
thus a loss of quality. Media can bepoliced to ensure it agrees withrequested services to protect qualityand prevent service theft.
SBCs at network interconnect pointshelp to secure the network by per-forming ‘topology hiding.’ This pre-vents the propagation of network andpersonal details and limits DoS(denial of service) attacks. They alsoprovide valuable accounting dataabout the exchange of media, permit-ting more accurate inter-operatorsettlements.
Regional regulatory requirements callfor VoIP operators to provide emer-gency call handling and ‘LawfulInterception’ facilities. SBCs can deliv-er these functions.
The SBC’s ability to deliver effectivecall/session control facilitates the cre-ation of reliable, secure and compliantservices in today’s VoIP networks.
To develop networks that can migrateto IMS, it is essential that they be flex-ible enough to evolve with the stan-dards. The success of IMS as a global-ly accepted architecture relies on stan-dards development. Before examiningIMS, let us look at some of the key organ-isations involved in their development.
Evolving standards
Converged networks allow rapiddeployment of new services that canbe accessed from a variety of devicesover a variety of access networks.Access standards governing thedevices being connected, servicesavailability and service delivery arethe key to extensive interoperability.The glue that sits between the devicesand the service is the IMS that allowsany device to connect to any service.
It takes a series of steps, though, to getthere. Bodies such as 3GPP (ThirdGeneration Partnership Project) andETSI (European TelecommunicationsStandards Institute) have phasedreleases of standards planned over thenext few years. Each release providesbroader coverage than its predecessor. IMS was initially defined by 3GPPspecifically for mobile networks.However, this was considered restric-tive, so IMS was subsequently definedto be access independent. This pro-moted inter-working between differ-ent access devices and has stimulatedfurther convergence.
In the fixed-line world, ETSI’sTISPAN body (Telecoms and Internet
converged Services and Protocols forAdvanced Networks) is working tostandardise converged networks usingIMS as its core architecture. The ulti-mate objective is a common IMSarchitecture for both fixed and mobileservices by 2008/2009.
The 3GPP2 (Third GenerationPartnership Project 2) group’sMultimedia Domain (MMD) solutionwill standardise third generation mobileservices for CDMA2000-based accessnetworks.
The standards bodies are drafting theroadmap for a journey that operatorshave already begun.
Session control in the IMS
Call Session Control Functions(CSCFs) are at the heart of the IMSability to deliver ubiquitous services.
The Proxy-CSCF (P-CSCF) handlesthe caller’s initial contact with IMS. Itensures that the user, if roaming, isregistered with the correct networkand that messages are correctly routedonce registration has occurred.
The P-CSCF detects which servicesshould be hosted by the visitor’s net-work. This is important for routingcontent services, the provision ofEmergency Call Handling and forLawful Intercept. It can also providedefence against SIP signalling attacks.
TISPAN also defines an InterconnectBorder Control Function (IBCF) to
formalise signalling interconnectbetween networks and BorderGateway Functions (BGF) to handlethe media.
IBCF functions include protecting andpolicing the signalling, topology hid-ing and conversion between IPv4 andIPv6 the new version of the InternetProtocol. It also controls a BGF thatprotects media exchanged acrossoperator boundaries.
Divide and evolve
The session control functions of bothtoday’s networks and IMS share somecharacteristics.
An IMS core must provide the samephysical separation of signalling andmedia elements now provided bySBCs. Accordingly, SBCs must be ableto migrate from single nodes that han-dle both signalling and media to phys-ically separated signalling and medianodes.
Since functions within the convergednetworks and IMS definitions overlapconsiderably, it is important to con-sider each of the functional require-ments throughout the network ratherthan defining products as a functionalblock.
Today’s access network SBCs will besplit to meet the signalling require-ments of the P-CSCF and mediarequirements of the access BGF.Similarly, interconnect SBCs will besplit to deliver both topology hidingand IBCF for signalling, and an inter-connect BGF for the media.
Operators looking to ride the nextgeneration network, NGN, wave needa flexible infrastructure capable ofevolving with the standards that meetstheir immediate needs and protectstheir investment.
Standards are defining the capabilitiesand shape of NGNs. They will deter-mine the evolution of session controlelements, including SBCs, to supportthe separation of media and signallingfunctions. This provides the flexibilityand independent scaling needed tointroduce the VoIP services that willgenerate the revenues to carry the net-works to the next generation.Customers will be rewarded throughthe introduction of an increasinglyrich and accessible range of services.
‘IMS permits serviceimplementation,independent of accesstype, so that a singleservice can be deliveredto a wide range ofterminals.’
Figure 1: The ultimate objective is a commonIMS architecture for both fixed and mobile serv-ices by 2008/2009.
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PT/Wireless & Networks Comm China 2005 (PT Comm 2005) hasbuilt a high reputation in its past editions as the hottest eventin Asia and China dedicated to the telecom industry. This giant,truly significant, telecom event will take place 18-22 October,2005 at the China International Exhibition Centre, Beijing, PRChina.
PT Comm 2005 features the hottest technologies and servicesto capture the market and boost telecom development in Asiaand China. The show now has more than 400 exhibitors fromover 16 regions and countries. There are five country pavilionsparticipating, including Canada, France, Japan, Korea andTaiwan province. They occupy over 50,000 square metres ofexhibition space. There will be 20 per cent more exhibitors and20 per cent more exhibition space at this year’s event than atthe last event in 2003.
PT Comm 2005 brings together the expertise and insights ofkey industry leaders from around the world, to provide per-spectives on the latest telecommunication technologies andsolutions.
Confirmed exhibitors include such well-known companies asAlcatel Shanghai Bell, Andrew, Anritsu, Cisco, Datang,Emerson, Ericsson, Fujitsu, Harbour Networks, Huawei, Intel,Lenovo, LG, Lucent Technologies, Microsoft, Motorola, Nokia,Nortel, NTT Docomo, Putian, Powerwave, Qualcomm, Renesas,Rittal, RFS, Rohde & Schwarz, Rosenberger, Samsung, Siemens,SK Telecom, Spirent, Tellabs, Texas Instruments, UT Starcom,VK Mobile, ZTE and many more.
PT Comm 2005 exhibits include access technologies, broad-band networks, data communications, networking equipmentand technologies, mobile communications, network security,wireless networking, LAN/MAN/WAN, wireless technologies,NGN, antennas, towers and earth stations, integrated circuitapplication technologies and solutions, components, semicon-ductors, power supply equipment, measurement equipment,e-Commerce/m-Commerce, VoIP/IP telephony, telecom value-
added services and technical solutions, personal terminals,microwave systems, broadcasting equipment and services andsatellite communications.
To make it easy for buyers and exhibitors to get together andexchange information, business and product type theme zoneswill highlight – and group together – Electronic ManufacturingServices, ICP/ISP, Mobile Handset and related equipment,System Integrators, Telecom Manufacturing, Telecom &Computer Software and Hardware, Telecom Operators, Testing& Measurement and Value-added Services.
Symposiums held alongside the exhibitions will give exhibitorsa chance to present their latest technologies and exhibits tointerested buyers. The symposiums will cover WirelessCommunication and Technologies, Network Infrastructure &Deployment, Mobile Phone Value Added Services & TechnicalSolutions, Telecom Solutions and Testing Solutions for Next-Generation Networks.
PT Comm is widely recognised for the role it plays boosting thetelecom industry. PT Comm is a mega technology exchangeplatform. Trade visitors come to PT Comm to grasp the latestmarket information, network, establish partnerships andenhance business deals.
PT Comm is sponsored by Ministry of Information Industry (MII)and the China Council for the Promotion of International Trade.PT Comm is organised by the China National Postal andTelecommunications Appliances Corporation (PTAC) and theChina International Exhibition Centre Group Corporation.Chinese operators, including China Telecom, China Netcom,China Mobile, China Unicom, China Satcom and China Tietong,are co-organising the event. Adsale Exhibition Services Ltd isthe Overseas Organiser.
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PT/Wireless & Networks Comm China 2005The leading telecom industry show in China
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The show now has more than 400 exhibitors. Confirmed exhibitors include such well-known companies as Microsoft.
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by Richard Lihe Ye, President, ZTE, Brazil
Nothing will be as it was
IPTV, the transmission of digital TV using the Internet Protocol, will grow rapidly in thenext few years. IPTV offers interactive audio and video services, higher technical qualitythan existing broadcast TV, better content and personalised services. IPTV is an impor-tant strategic alternative for fixed telecommunications operators threatened by thebroad range of sophisticated wireless services. IPTV provides traditional broadcastingservices, video on demand (VoD), Private Video Recorder (PVR), Time-ShiftedTelevision (TSTV), Interactive Games and many other services.
The dissemination of the IPTV serv-ices will change not only the dailylives of consumers, but also thestrategy of the telecommunicationcarriers and cable TV operators.
Research institutes are unanimousin projecting a great boom in IPTVservices around the world duringthe next five years. Two recent stud-ies show:
- The International DataCorporation (IDC) estimates thatbetween 2005 and 2009 theEuropean IPTV services market willgrow almost ten times, from US$262 million to US$ 2,5 billion.France, Italy and Spain will lead thisexpansion;
- Multimedia Research Group(MRG) expects the number of IPTVsubscribers will grow from 1.9 mil-lion to 25.3 million between 2004and 2008, a 79 per cent compoundannual growth.
IPTV, a product of technologicalconvergence and the result of yearsof research and development, is nowready to be commercialised by agreat many service providers. It is anew service based on the InternetProtocol.
IPTV provides interactive audio andvideo services. Secure and advancedIP networks will provide consumerswith an enriched personal entertain-ment experience. IP will deliverhigher technical quality, better con-tent and personalised servicesaccording to the user’s profile.
Business strategies
IPTV is one of the most importantalternatives business strategies forfixed telecommunication carrierstoday, since they need services tocompete with those offered by wire-less operators and to re-build theirprofitability.
IPTV is very promising: it helpsspeed the development of broad-band networks, increases ADSL(Asymmetrical Digital SubscriberLine) subscriptions, raises ARPU(Average Revenue Per User) andoperational revenues.
The infrastructure for an IPTV sys-tem must meet the user’s manydemands for home entertainmentand provide operators with a plat-form for interactive added-valueservices, including broadcasting,video on demand (VoD) or a mix ofthe two. Some of the most commonIPTV services are:
- Broadcasting is the basic form ofIPTV services. Broadcasting servicesare those of traditional TV, withchannel switching and selectionusing on-screen menus.Broadcasting helps operators attracttraditional TV viewers. Revenuescome from monthly subscriptions,advertisements and other services.
IPTV
Richard Lihe Ye is the President of ZTE in Brazil and Vice President for ZTE Latin America. He estab-lished ZTE’s activities in Brazil when the company first came to the country. As Vice President of ZTE inBrazil, he was responsible for hiring the company’s initial team of professionals and starting the com-pany’s business. Upon completing the set-up of the Brazilian branch, Richard Ye was transferred toMadrid, Spain. There, he assumed responsibility for ZTE’s business with the Telefónica Group for thewhole Latin America. Since joining ZTE, in addition to Brazil, he has worked for ZTE in Spain and China,Ecuador and Peru.
Richard Ye graduated in Telecommunications Engineering from the University of Electronic Sciencesand Technology of China.
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IPTV
The service usually usesIP multicast to transmitTV programmesthrough IP networks.
- VoD is another basicIPTV service. Viewersselect programmes viascreen menus and payfor their choices. WithVoD, the viewer active-ly selects the content hesees, whenever hewants to see it, insteadof passively choosingfrom among the pro-grammes that thebroadcasters happen tobe presenting at themoment.
- Private Video Recorder (PVR) letsviewers record broadcast content forlater viewing whenever it is conven-ient.
- Pay-per-View (PPV) is a form ofVoD. Hot new films usually adoptthis type of service. PPV uses digitalcopyright technology.
- Subscription Video on Demand(SVoD) is another type of VoD.Viewers pay monthly to view specialprogrammes and this changes pas-sive channel viewing into view ondemand.
- SVoD combines broadcasting andVoD services.
- Time-Shifted Television (TSTV)combines broadcasting and VoD.Viewers may pause the programmethey are watching at anytime andcontinue to view it later from wher-ever they left off. The server startsrecording the programme wheneverthe pause control is used, andreplays the recorded programmelater using a unicast mode.
- Near Video on Demand (NVoD)transmits multiple copies of a pro-gramme on several channels at shorttime intervals (e.g. 10 minutes).Viewers can move forward and back-ward in the programme by switchingchannels. The NVoD service is animproved form of traditional broad-casting it is especially suitable for hotfilms and breaking news coverage.
- TV Shopping combines a TV shop-ping guide and PC-based e-com-merce. The TV presentation form is
more vivid, and helps promote theservice.
- Interactive games connect playersto electronic games using TV as amedium.
Different bets
There are three types of IPTV servic-es. The first is the joint operation. Anetwork operator and a contentprovider establish an agreementwhere the former sells and offers theservices and the latter elaboratesand integrates the content. The rev-enues are shared according to pre-established terms.
The second type is self-operation.The network operator handles theentire service, buying content fromindependent companies and keepsthe revenue.
The third type is leasing. The net-work operator rents his platform fora fee to an IPTV service providerwho keeps the resulting revenue.
Joint operations eliminate certainregulatory problems, but enhance
o p e r a t o r / c o n t e n tprovider conflicts, andrequire rigid legal con-trol. The self-operationmode is often found incountries with littleregulatory control, butpowerful operators.
Since the operator has afull control over bothcontent and the net-work platform, costsare relatively low. Thisis the most favourablemode for the operator.
The lease mode worksbest when the TV oper-
ator is strong and wants to offerIPTV services. The TV operatordevelops its IPTV services using IPnetworks of telecom operators. Inpractice, IPTV operators flexiblyadopt one of the modes or a combi-nation of several modes according totheir specific environment.
Failure-proof
Less than ten years ago, some largeoperators tried, unsuccessfully, tooffer services similar to those pro-vided by IPTV using analog lines.With digital lines, though, failure isalmost impossible. Today’s digitalplatforms are much more reliable,more flexible and cost much lessthan ten years ago.
Reliability is the number onerequirement for IPTV services. Forthe consumer, the chief characteris-tic of interactive audio and videoservices is total technical availabili-ty; there are no interruptions due tooperational failures. Consequently,IPTV systems must meet a series ofrequirements:
Integrity
The solution should ensure the qual-ity and interoperability of products,simplify maintenance and imple-mentation, as well as satisfy opera-tors, requirements regarding opera-tion management, service control,service quality and maintenance ofthe IPTV services.
Operability
Systems have to provide a widerange of services, have flexible and
‘Reliability is thenumber one require-ment for IPTVservices.’
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Number of TV sets.......................................54 million
Percentage of homes with TV sets:...............90%
Pay-TV subscribers:.....................................3,6 million
by cable..........................................................60%by satellite.......................................................34%by MMDS........................................................6%
DSL subscribers in 2004..............................1,5 million
IPTV subscribers in 2007 (projection)..........200,000
Brazilian market
‘The first commercialIPTV experiences tookplace in China, Indiaand Mexico.’
Figure 1: Source: MRG Inc. 2004.
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Asia 2005
Asia’s le
adin
g
confe
rence
feat
uring
info
rmat
ion o
n
deplo
ying a
n all-
IP strat
egy
VoIP World Asia 2005 is the conference that will provide insights into theopportunities and risks that carriers and enterprises will consider as they moveonto an all-IP platform; specifically with respect to issues such as security,deployment and comparison of VoIP to PSTN-based voice minutes traffic. Thisconference will also consider the costs and benefits of VoIP and the capability ofthe technology to provide clear and crisp conversation at a lower cost structure- all of this over a span of two days.
VoIP – It is HOT in Asia!
• In-depth discussions of carrier concerns over all-IP platform• The platform to gain insights into enterprise customer requirements, needs
and wants in an all-IP strategy• The meeting place for all industry experts in the Asia Pacific and an easy way
for you to establish business contacts all in one place at one time• A cost effective way to learn how to maximise a return on your investment
on IP-technology
29 November – 1 December 2005, Sheraton Towers, Singapore
Media Parther: Organised by:
Call today on +65 6322 2770 to book your place or
visit www.terrapinn.com/2005/vwa_sg to register now!
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Response Form Fax to +(65) 6226 3264� YES! Please contact me to discuss sponsorship opportunities at VoIP World Asia 2005� Please send me a VoIP World Asia 2005 conference brochure� I am interested in attending the conference. Please contact me
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Speed Networking – A fun and efficientway to get to know your partners andcompetitors.
Make contacts and schedule meetingsprior to the event - Our online contactsystem exclusive to Terrapinn delegatesallows you to schedule meetings withspeakers, delegates and sponsors priorto and after the event.
Interactive panel sessions – The “chatshow” style sessions offers you the chanceto ask the questions you want answered.A great opportunity to speak with theleading players in the industry directly.
Network, relax and do business – Morededicated networking time! Gets youtogether with the right partners, the rightcustomers, the right decision makers... inthe right place at the right time.
Hear & Learn more – more succinctpresentations means more presenters andtopics covered!
IPTV
diversified service policies, supportthe development of interactive userself-service functions and provideeasy content processing and control.
Manageability
In order to support automated serv-ice flow management, visualisedequipment management, remoteequipment failure diagnosis andabundant service operation statisti-cal reports and network operationreports.
Scalability
Initially, the solution superimposesIPTV service upon an existingbroadband network platform. Latermore progressively more sophisti-cated video network and operationsupport platform can be flexiblydeployed to fit service deploymentrequirements.
As needed, the operation supportplatform can also expand from a sin-gle server to a layered network sys-tem.
Online software update
An online update serverenables the automaticupdate of the set top box(STB) software. An updatefailure rollback mecha-nism ensures the properoperation of the STB.
Flexible networking
The IPTV ‘video conver-gence’ transmission solu-tion and the IPTV ‘videodelivery’ transfer solutionare both designed to helpnetworks at different
development stages to smoothlyevolve into IPTV service networks,utilising current network resourcesand improving the performance-cost ratio of IPTV.
Service security
Access authorisation, service autho-risation, Digital Subscriber LineAccess Multiplexer (DSLAM) multi-cast channel control and digital con-tent copyright control mechanismsare all needed to ensure security ofthe service. System access limitsguarantee the security of the back-ground. These form a well-foundedbasis for service operation.
Service quality assurance
IPTV service quality end-to-end isassured by a number of means: theflow balance technology of the videodistribution system; the streamservice receiving control; the lay-ered distribution architecture; theIP network’s differentiated servicemodels, the access network’s user-and-service-based multi-level QoSprocessing (DSLAM) and multiplePermanent Virtual Circuit (PVC)service barriers of the modem.
The multicast access limit controltechnology of the DSLAM reducesthe time delay of channel switching,improving service quality.
The first commercial IPTV experi-ences took place in China, India andMexico; many others are on the way.In Brazil there are excellent oppor-tunities for several sorts ofproviders. The market and the tech-nology for IPTV are both ready.
‘IPTV is one of themost importantalternatives businessstrategies for fixedtelecommunicationcarriers today, sincethey need services tocompete with thoseoffered by wirelessoperators and tore-build theirprofitability.’
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IPTV subscribers
2004...............................1,9 million
2008 (projection)............25,3 million
IPTV business (US$)
2003...............................US$ 398 million
2007 (projection)............US$ 10,2 billion
IPTV worldwide market
Figure 2: Source: MRG Inc. 2004.
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by Jörg Springer, Chief Marketing Officer, Radio Frequency Systems
Cellular’s evolving RF palette
In much of the world, including Latin America, there are more wireless than wirelinesubscribers, so third-generation (3G) wireless data access is especially important. 3Gwireless uses CDMA technology, which has different propagation requirements thanexisting GSM and TDMA installations. To maximise performance of existing systemsand migrate to the new, operators are using radio frequency conditioning systems andintelligent antennas to provide the precision control of cell footprint size, shape, direc-tion and power that CDMA systems need.
‘An environment of change’ accuratelydescribes the cellular communicationsworld. In the 1990s, mobile telephonywas essentially a voice service largelylimited to Western Europe, NorthAmerica and Japan, where together 70per cent of the world’s 320 millionmobile subscribers were located.Today, while voice remains an essen-tial revenue earner, mobile data is themajor growth market. Today, cellularis truly global, with the most signifi-cant subscriber growth seen in Brazil,China, Eastern Europe, Africa andIndia.
Until the end of the 1990s, cellularaverage revenue per user (ARPU) washealthy and yearly subscriber growthapproached 50 per cent in mostregions. Operators and OEMs operat-ed in distinct, usually localised, geo-graphic areas. The same ‘boundaries’constrained cellular technology selec-tion.
Significant regulatory changes in the90s changed this. The USA’s FederalCommunications Commission (FCC)
opened the door to competition bydisbanding the mobile cellular duop-oly and introducing its 45-MHz ‘spec-trum cap’. Soon after, the World TradeOrganisation’s ‘international telecom-munications treaty’ exposed operatorsin signatory countries to global com-petition. Free trade and unbridledcompetition had arrived in the majortelephony markets.
Cellular ARPU growth slowed due toglobal competition and pre-paid serv-ices and operators sought ways toexpand market share and reduce oper-ational expenditures.
Despite the challenge of global compe-tition, many operators and OEMs sawopportunities to explore markets out-side their traditional ‘patch’. In paral-lel, the emerging economies of Brazil,China, Eastern Europe, Africa andIndia identified mobile as a means offast-tracking telecommunicationsinfrastructure development, whichhad long stagnated under monopolyrule. Cellular was on its global growthpath.
The drive for data
In the developed markets, interestgrew in third-generation (3G) cellular.3G’s data-based mobile services,always-on Internet connectivity,email, video telephony and streamingvideo proved increasingly attractive inan industry with flagging ARPU andslowing subscription rates.
3G called for new wireless technolo-gies that supported packet-switched,rather than circuit-switched, high-speed data. In 1999, the InternationalTelecommunications Union sanc-tioned five technical standards for 3Gmobile. Two now dominate, both codedivision multiple access (CDMA)-based: wideband CDMA (W-CDMA)as the migration path for global sys-tem for mobile communications(GSM) networks and CDMA2000 forCDMA systems.
W-CDMA, now deployed in a new 2.1GHz spectrum band in Europe andparts of Asia, demands new basetransmitter station (BTS) sites. Since
Third generation wireless
Jörg Springer is the Chief Marketing Officer with wireless technology group Radio Frequency Systems(RFS). He has over 15 years of experience in global marketing and business development and manage-ment. Mr Springer has been responsible for strategy and budget development, as well as product, brandand corporate marketing. He has held executive positions in Europe, North America and Mercosul, suchas Corporate Director of Product Line Communications with a multinational European OEM and Headof Business Development with a Brazilian group based in Rio de Janeiro. Mr Springer joined RFS asMarketing Director for Europe, Middle East and Africa, moved on to become Global Director of PublicRelations and then was promoted to Vice President Global Marketing/Chief Marketing Office (CMO).
Jörg Springer holds a Masters degree in Business Administration (MBA), with majors in foreign tradeand international marketing and management.
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Third generation wireless
fresh sites were already rare, multi-band (GSM 900 MHz, GSM 1800MHz, W-CDMA 2100 MHz) andbroadband antenna solutions wereneeded. CDMA2000 though – essen-tially a BTS software and channel cardupgrade for existing 2G CDMA net-works – does not require new spec-trum. Both technologies required newhandsets, with new chip sets, and asuite of new services.
The move from time division multipleaccess (TDMA)-based GSM to aCDMA-based technology presentedGSM operators with network manage-ment challenges. Whereas TDMAminimises co-channel interference byreusing a select number of channelsover a group of cells, CDMA-basedsystems use the full frequency band ineach cell. Moreover, CDMA cells‘breathe’ – their size varies with thenumber of callers within the cell, datarates and so on.
The resulting co-channel interferencein the CDMA-based network increasesnetwork ‘noise’ and progressivelydepletes network capacity. CDMApresents tougher network planningthan GSM, particularly in addressingCDMA’s soft handover/capacity trade-off.
This called for cellular antenna solu-tions with sufficient flexibility forCDMA needs including precision con-trol of cell footprint size, shape, direc-tion and power. To compensate forCDMA-style cell breathing and oftenless-than-optimal site locations, vari-able electrical tilt, to continuouslyadjust cell footprint size, was neces-sary.
Wringing more from 2G
The US$73 billion spent on W-CDMAspectrum licenses in Germany and UKalone slowed European 3G rollout.Rollout was also slowed by protracteddelays in advanced CDMA handsetand chipset availability, regulatoryindecision regarding the sharing of 3Ginfrastructure and, in the USA, aboutadditional spectrum for 3G.
To meet growing subscriber demandwith existing 2G infrastructures, oper-ators struggled to optimise networkperformance and wring more fromdecade-old 2G assets. This generateddemand for high-performance antennasystems as an intermediate solution.
In the meantime, 2.5G cellular solu-tions such as enhanced data rate forGSM evolution (EDGE) served to
bring some data services on stream.The transition to 2.5G and 3G thrustRF conditioning (RFC) technologies –filters, duplexers and tower mountedamplifiers (TMAs) – into the spot-light.
Increasing network overlays andretrofits generated operator interest inadvanced RFC solutions. Initially,TMAs were in high demand, butdemand diminished as 2G BTS sensi-tivities improved.
The importance of maximising sub-scriber bit rate in a 2.5G and 3G sce-nario changed all this: unlike voiceservices, subscriber bit rate changesaccording to the received power at theBTS. EDGE, CDMA2000 and W-CDMA coverage was slim in the earli-est deployment stages, as the uplinklimited the bit rate. TMAs were theanswer.
Since the informal geographic ‘bound-aries’ governing mobile technologieswere abandoned in the late-1990s,and new, untried, cellular overlaycombinations have been deployed –the spotlight is now on RFC solutions.
China Unicom, for instance, overlaidCDMA 850 MHz on its GSM 900 MHznetwork, while in Brazil they overlaidGSM 900 MHz on established CDMA850 MHz networks. These new combi-nations generated unexpected cross-platform interference problems andled to a new generation of precision-engineered and customised co-locationfiltering technology.
Flexibility and remotecontrol
The major global operator groupsshowed particular interest in the esca-lating markets of Latin America,Africa, Eastern Europe, China andIndia. This created demand for broad-band and multi-band antenna solu-tions that addressed broader markets,including the first triple band antenna
with independent fixed electrical tiltin each band and with beam aperturesexpanded to 90 degrees, to rationaliseand reduce antenna inventories.
It is now clear that control of variableelectrical tilt and other antenna para-metres needs to be remotely accessi-ble. The Antenna Interface StandardsGroup (AISG) developed a standardantenna communications protocoland physical interface for such con-trol, ratified by the 3G PartneringProject, which is now the global stan-dard for tower top device monitoringand control.
A typical AISG-compliant solutionincorporates a remote electrical tiltantenna control unit (ACU), a towermounted amplifier, bias-T, plus a con-trol network interface unit.
The ACU and TMA have evolved tobecome, at least conceptually, part ofthe antenna. ‘Integrated antennas’ fitand concealed both TMA and ACUwithin a single body.
Next, the antenna and RFC will morphinto a single powered entity called an‘active antenna’. These antennas areno longer passive, dumb, devices.They are powered active devices oftenfitted with onboard intelligence andcontrol.
Tomorrow’s antennas
Tomorrow’s antennas will integrate awide range of active RF conditioningcomponents, such as low-noise ampli-fiers, multiplexers and filters, withincreasing levels of control, that mightbe corrected by simulation tools inclosed-loop real-time configurations.
The network might ultimately be ableto adjust the antenna beams and RFCparameters to minimise interferenceand maximise subscriber bit rate.These super-flexible solutions will beinstrumental in establishing ubiqui-tous wireless data services globally.
Cellular will be ubiquitous in thefuture. In developing markets such asBrazil and India, wireline connectionshave stalled and wireless connectionsnow greatly outnumbered them. Thechallenge is to focus on the rapidlychanging market and extend the RFpalette of offerings to achieve greaterflexibility and performance.
‘The move from timedivision multiple access(TDMA)-based GSM to aCDMA-based technologypresented GSMoperators with networkmanagementchallenges.’
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by Davi Caproni, General Manager, Juniper Networks, Brazil
Beyond the Internet: the next Era
Businesses need the Internet to create differentiated services, compete effectively,reduce costs and interact with customers and collaborators. In 2005, 35 per cent of busi-nesses will deploy Extranets to communicate with partners, suppliers or customers.Services that mix triple play elements, such as IP phone, video-conferencing and IPTV,are the key to survival for operators and will account for a great percentage of their rev-enues. Latin America, with 58 million Internet users and the world’s highest growth rate,is a prime market.
Davi Caproni is the General Manager of Juniper Networks in Brazil. He was responsible for launchingJuniper Network’s operations in the Brazilian market and, afterwards, in South America. Before joiningJuniper Networks, Mr Caproni served as Executive-Director at Lucent Technologies. He had workedpreviously at Panduit Corp as Director for Latin America.
Internet services
The popularisation of the Internet hasopened a new horizon in communica-tions, breaking social and geographicalboundaries and simplifying the accessto information in general. This hashad a clear impact on the world’ssocial and economical development.One of the best examples of thisimpact is the role of technology, itself,within the organisation.
Formerly technology was seen as abusiness-supporting tool, and now itis a competitive differential within thecorporate world, providing respon-siveness, cost reduction and betterinteraction with customers and collab-orators.
In the corporate world, the benefitsand gains brought by the Internet areobvious, due to the huge popularity ofWeb applications currently travellingin corporate networks as Intranets,Extranets, e-Commerce portals, B2Band B2C portals, among others.
Web applications use an IP-based net-work infrastructure. These applica-tions reduce operational costs,increase operational flexibility, facili-
tate changes to business plans andmodels and speed decision-making.
Security
Studies show that 80 per cent of secu-rity threats come from inside theenterprise affected. Thirty per cent ofthe problem traffic consists of worms,unofficial file sharing and peer-to-peer communications. Applications asonline collaboration tools, SCM tools,CRM tools and the like are spreadingquickly and breaking the traditionalcorporate network boundaries.
It is estimated that in 2005, 35 percent of the companies will deployExtranets for the use of partners, sup-pliers or customers. IT executives aretrying to develop secure and assurednetworks that enable them to makebusiness more competitive, drive rev-enue and responsiveness by openingtheir networks for use as a competitivetool while mitigating risk.
It is essential, then, that networkadministrators have a fine-grainedunderstanding of who the user is, the
integrity of their devices, of their net-work’s services and, as well, under-stand the applications or action thatusers desire. Carrier class routers,firewalls, SSL VPNs and IDP plat-forms are being deployed in largescale in corporate networks, to guar-antee the secure and assured networksthat corporations require in the age ofthe Internet.
Convergent networks
The service providers benefit, as theimpact of the move from a multi-networkmodel as TDM, ATM, Frame Relay,wireless, wireline and IP to an IP con-vergent network model will createexceptional conditions for the defini-tion of new business plans.
The final outcome of these plans willbe extremely beneficial both for thecustomers and the stakeholders,because the investments in networkinfrastructure acquisition can be moreobjective and selectively focused.
The broad range of service offeringsunder a single IP infrastructure and
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Internet services
the significant reduction in the opera-tional costs of these networks tend tomake business planning more produc-tive and provide a fast return oninvestment.
The time-to-market for new services isfundamentally important. Consequently,the building of a secure and assurednetwork, that can support any and allapplications on a shared (virtualised)IP infrastructure, will be crucial forthe business success of the serviceprovider. It will, of course, also be nec-essary to solve the difficult problemsof security at the application level toprotect the critical infrastructure andnetworks.
Interoperability issues among theworld’s networks and among serviceproviders and corporations, raiseddoubts, not so long ago, concerningquality of service (QOS) in video con-ferencing and other time sensitivecommunications.
Today, these issues are being widelydiscussed in the appropriate forumsand standards are being developedand approved. This demonstrates thecommitment of the many segments ofthe industry to the creation of anopen-business model that is sustain-able and healthy over the long-term.
Using a robust, scalable, flexible andsecure infrastructure, serviceproviders can confidently build busi-ness plans that include those added-value services that demand a networkwith guaranteed QoS (quality of serv-ice) and excellent throughput.
The ability to provide services beyondtriple play - those that mix triple playelements, such as IP Phone, Videoconferencing, Live TV, Multi AngleLive TV, virtual VCR / VOD, Consolegaming and Broadband InstantMessaging - are the key to survival formany operators. These are the appli-cations that will account for a greatpercentage of service provider rev-enues in the future, bringing new sub-scribers and lower churn and makingpossible the special services that dif-ferentiate service providers in themarket.
With a secure and assured network,service providers will be able to devel-op and/or create new segmented servic-es or services oriented to specific marketdemands, as, for instance, managementof telephone contacts using fixed/mobileconvergence through a cell phoneequipped with voice recognition, or evenoffer hospitals services where doctorscan virtually take part in surgeries.
Services with low added value such asthe traditional Internet services,music download, IP radio and low-endgaming, for instance, will still be pro-vided, but more to keep the customerfidelity than as revenue sources.
It is clear that most business modelsbased upon commodity services havenot proved themselves in practice.Mergers and acquisitions will occurthroughout the process of transition toIP networks and value-added serviceprovision, bringing soon a new cycle ofconsolidation to the sector.
In brief, the sector will move from‘Internet as the service’ to ‘Internet asone of many services’.
Today the reality is very similar to thatwhen the PC first appeared. If we com-pare how we used the PC at that timewith its use today, we see that usingthe ‘PC infrastructure’ many applica-tions (services) have been developed,providing exceptional gains to the
consumers, to the industry and stake-holders in general.
Latin America is an IT and Telecommarket with exceptional potential.The numbers illustrate this assertionwell. The region has a GDP (GrossDomestic Product) estimated at US$1.5 trillion a year. Growth for 2005 isestimated at 4 per cent.
According to a survey conducted by e-Marketer, a website specialising in thetelecom market, the region will have90 million new mobile users by 2009and will conquer an additional base of55 millions mobile subscribers.
Latin America will become one of themain markets for applications, wire-less services and devices in the nextfive years.
The numbers referring to Internetusers are even more surprising andpromising. Latin America has 58 mil-lions Internet users. Brazil alone has22 million of these users.
Latin America has the highest growthrate in the world (19 per cent in 2004),and the region’s users grew from 32millions in 2002 to 58 million in2005.
Undoubtedly, the opportunities aregrowing in step with the growth of thishuge market. There is momentum forprogress, but effective planning andexecution will be essential.
‘Services with lowadded value such as thetraditional Internetservices, musicdownload, IP radio andlow-end gaming, forinstance, will still beprovided, but more tokeep customer fidelitythan as revenuesources.’
Figure 1: Line of purpose-built, high-performance firewall/VPN security systems designed for largeenterprise, carrier and data centre networks.
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by Luís Avelar, Executive Vice President, Marketing and Innovation, VIVO, Brazil
Third generation mobile and multimedia in Brazil
Mobile telephony has already surpassed the importance of the fixed telephone in bring-ing public communications to all levels of Brazil’s population. It reaches regions thatfixed services cannot economically serve. Mobile telephones provide, in addition tovoice, a wide range of multimedia services. Brazil, with 76 million users, has evenlaunched multimedia applications at the same time as the United States. Businesses with3G broadband mobile can access emails, download files and access their offices whileworking in the field.
Luís Avelar is the Executive Vice President of Marketing and Innovation of VIVO, a joint venturebetween Portugal Telecom and Telefónica Móviles for mobile communications in Brazil. Mr Avelarbegan his career in Portugal Telecom in New Product and Services Development, Commercial andMarketing Planning and Large Account's Administration. He served several years with the EuropeanCommission in the area of Telecommunications' Policy, but returned to Portugal Telecom to support thecompany’s privatisation programme and later to coordinate its strategic alliances programme. MrAvelar moved to Brazil to study the opportunities of the Telebrás system’s privatisation. Upon the acqui-sition of Telesp Celular, he became Special Advisor to the President of Telesp Celular and was later pro-moted to Vice President. Upon the formation of the Vivo joint venture, he became Vice President ofInformation Technologies and Products and Services Engineering and later promoted to his presentpost.
Luís Avelar earned his degree in Electrotechnical Engineering from the Technical Superior Institute ofLisbon, Portugal, and has a Masters Degree in Marketing and Finance.
3G multimedia
For some time, now, InformationTechnology has been the driving forcebehind many significant and out-standing economic and social changesall over the world. One of the out-comes and advantages of all this tech-nology is the mobile concept and capa-bility that many experts consider to bethe underlying cause of the ThirdIndustrial Revolution.
Mobile telephony, an integral part ofthis trend, is one of the markets mak-ing the biggest contribution to digitalconvergence, personalisation and,especially, the advance of multimediaapplications.
Japan and Korea are outstanding mar-kets in terms of the world’s advancesin mobile telephony. Multimediaapplications have surged into feverishpopularity there. Users in these coun-tries have demanded velocity and highquality data transmission, such asimages, videos and sound, as the prin-ciple distinctive features for themobile telephone. Although the indus-try in Brazil is not yet going throughthe same phase as in the Asian coun-tries, innovative third generation serv-
ices, together with world-class tech-nology, are already present, providingdata transmission speeds of up to 2.4Mbps.
In fact, in some cases, Brazil haslaunched multimedia application atthe same time as the United States,tremendously increasing the econom-ic and digital inclusion that mobiletelephony has fomented in recentyears.
The heavy impact that mobile commu-nication has upon Brazilian societycan be measured by the expansion ofthe customer base, which has beengrowing at historic rates of 30 per centa year and now serves over 76 millioncustomers. In other words, four out ofevery ten Brazilians have a mobiletelephone, according to figures fromBrazil’s National TelecommunicationsAgency (ANATEL).
Mobile telephony has already sur-passed the importance of the tradi-tional fixed telephone system, becausethe mobile phone, today, actually ful-fils the function of bringing publiccommunications to all levels of the
population. Mobile telephony’s wide-spread network has opened gatewaysthat reach into regions that formerlyhad not been benefited by the imple-mentation of a fixed telephone system,such as, for example, many rural areasthat are now loyal mobile telephonecustomers.
The responsibility that mobile teleph-ony carries as an instrument for trans-forming people’s lives tends toincrease enormously in the shortterm. In Brazil, a leading mobile tele-phone operator offers third generationCDMA 3G EV-DO service and is ableto provide handheld resources, similarto CD, DVD and TV, anywhere and atany time, based on Qualcomm’s cut-ting edge CDMA technology.
The essence of third-generation serv-ices is in the media convergence inmobile telephones, which makes itmuch more enjoyable to use existingmultimedia applications, with theadded advantage of mobility. By usingrecently launched 3G multimediaservices, it is possible to use a mobiletelephone to watch TV, cartoons,videos, video clips, the latest soccer
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3G multimedia
highlights and movie trailers, as wellas to play three-dimensional games,listen to entire musical numbers, holdvideo conferences, and locate people,streets and commercial establish-ments, plus much, much more.
We are in the midst of a new era wherethe mobile telephone is no longermerely an instrument for voice trans-mission, but has moved forward tooffer clients an almost limitless rangeof multimedia services. This is anenormous technological leap, espe-cially for the Brazilian marketplace,because it permits high-speed recep-tion and transmission of excellentquality images and sound.
The technological revolution allowsother markets to develop as well andto become increasingly competitive,such as, for instance, by giving oppor-tunities to companies that providenational and international content.
Proof of this can be found in theresults of a study done by the consult-ing firms Yankee, Telecoms & Media,and PricewaterhouseCoopers, whichfound that the contents developed formobile telephones should stir upsomewhere around US$ 42.8 billionin business throughout the world by2010. According to the study, the mostpopular preferences are sports,movies, music clips, cellular TV andadult material.
Based on this same context, anotherstudy done in April of this year byPricewaterhouseCoopers indicatesthat the entertainment market willsoar to US$ 1.8 trillion by 2009. Thegrowth of broadband services deliv-ered via mobile telephony is the keyfactor for this forecast.
Furthermore, third generation tech-nology will bring much more thanvelocity, security and quality to receiv-ing and sending data. This technologyhas all the efficiency needed to bringmuch-needed expansion to new mar-
kets. It will drive many com-panies to develop multime-dia applications that willbring increasingly higherlevels of entertainment tothird generation sub-scribers.
Studies by such industrymarketing research firms asDatacom Research assure usthat CDMA 3G EV-DO is thetechnology that provides thefastest reception of audioand video downloads on themarket.
The launch of mobile 3Gmultimedia shows theindustry’s determined com-mitment to bring innovationand quality to its ever-expanding services. With theaccelerating growth in theuse of CDMA 3G EV-DOtechnology all over theworld, it is already servingaround 14.4 million people.
Currently, 22 of the world’smobile operators run thistechnology and, for that rea-son, we are extremely proudto be the first Latin American countrywhose mobile operators are able toprovide customers with the third gen-eration and to foment the use of mul-timedia applications by Brazilians.
Businesses can also gain with CDMA3G EV-DO. This technology providesthe efficiency, productivity and agilityneeded in a working tool and to facili-tate handling business activities viawireless communication.
With 3G broadband mobile connectiv-ity services, users can operate theirnotebooks at high speeds at just aboutany location: in an airport, in a shop-ping mall, in a taxi, or even at a last-minute meeting. Via a PCMCIA card,it is possible to access emails anddownload files and photos at ten timesthe velocity of conventional broad-band. This provides the precision,agility and speed that are the deter-mining factors for improving corpo-rate decision-making processes.
In addition to the mobile telephoneand high-speed connections, mobileoperators are concerned about provid-ing convenience for those profession-als who normally work more outsideof the company than inside the com-pany itself.
With these professionals in mind,some operators have brought mobile
email services to the market. Thesecan be also based on CDMA 3G EV-DO technology, among others.
With PDAs, push-mail service, userscan navigate on the Internet, organiseand synchronise their emails as theywish, and they can open any file, fromany location. This is still another toolthat proves the high level of innova-tions, implemented by Brazil’s opera-tors, to bring efficiency and mobilityas well as greater productivity andagility in carrying on business opera-tions.
In this manner, the launch of third-generation services reaffirms Brazil’spioneering position as one of theworld’s mobile telephony marketplaceleaders. This is just the beginning.
The industry is now anxiously await-ing the decision of ANATEL, the regu-latory agency, to establish the timeschedule for the public bidding com-petition for third generation servicesin Brazil. As a result of the arrival ofthird-generation technology, themobile telephone is now becoming afocal point for the convergence ofinformation and telecommunications,allowing people to communicateamong them and interact, as well as toenjoy multimedia entertainment,from a mobile platform.
‘In some cases, Brazilhas launchedmultimedia applicationat the same time as theUnited States,tremendously increasingthe economic and digitalinclusion that mobiletelephony has fomentedin recent years.’
Figure 1: The customer base has been growing at historicrates of 30 per cent a year and now serves over 76 millioncustomers.
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by Erasmo Rojas, Director of Latin America and the Caribbean, 3G Americas
The GSM evolution and mobile connectivity in LatinAmerica
GSM technology now dominates the mobile market in Latin America and the Caribbean.The market has recently been concentrated in the hands of three major market players,all of whom tend towards greater GSM usage. Due to economies of scale and low pricedhandsets, GSM has grown strongly among the lower-income population. High-end modelsattract businesses and up-scale users. Given GSM’s cost reducing technology and grow-ing spectral efficiency, its dominance in the region seems assured for many years tocome.
Erasmo Rojas is the Director of Latin America and the Caribbean for 3G Americas and is responsible forproviding information to mobile operators, manufacturers, regulators, telecommunications organiza-tions and the media regarding the GSM family of technologies in Latin America and the Caribbean.
Before joining 3G Americas, Mr Rojas worked at Ericsson as Director of Sales and Market Developmentfor Wireless Systems, Director of Business Development for Latin America and Vice President ofWireless Systems, Colombia, in addition to various managerial roles. While at Ericsson, he launchedmobile networks in Colombia and participated in the development of mobile services in twenty countriesthroughout the Latin region.
Erasmos Rojas holds a BSEE in Electronics Engineering from the Distrital University in Bogotá,Colombia, a Master of Science in Telecommunications from the University of Colorado, in Boulder, andan MBA in International Management and Marketing from the Southern Methodist University inDallas, Texas.
GSM
GSM has emerged as the leadingmobile technology in Latin America.The economies of scale of the GSMtechnology platform and its uniquetechnical attributes help to foster itsdominance as the market expands,especially through GSM’s adoption bylow-income users.
Only 32 per cent of the Latin Americaand Caribbean (CALA) region popula-tion of nearly 550 million are mobilesubscribers, leaving the door open forsignificant mobile growth. Brazil aloneadded over one million new sub-scribers in a single month in 2005.
Estimates of new mobile users in theregion by 2009 range as high as 100million. Such growth is far from guar-anteed, though, given that the region’sper capita income is less than 10 percent of the US average and incomeinequality is among the worst in theworld. Mobile growth, then, dependslargely on the ability of operators tolower their costs and reduce the priceof service.
A small number of GSM pioneers werealready building GSM’s reputation in
the region when Brazil designated the1800 MHz band for PCS services inJune 2001. New investors seized theopportunity to compete using GSM.
GSM gained further momentum sixmonths later, when major North andSouth American TDMA operatorscommitted to overlaying their TDMAnetworks with GSM, and quicklyopened the 850 MHz bands to GSM.GSM now serves customers in 17 ofthe region’s countries. The simultane-ous liberalisation of the mobile marketin the Caribbean provided a thirdstimulus for GSM expansion.
Features, including on-demand inter-national roaming, lower rates, a widevariety of terminals and innovativeconsumer and enterprise serviceshelped push GSM growth. New GSMoperators created massive customerbases virtually overnight.
In Brazil, Telemar’s Oi signed up morethan 1.4 million subscribers in its firstsix months of operation. Digicel intro-duced GSM to Jamaica and enrolled100,000 customers in its first 100days of business.
Forty-three TDMA operators overlaidtheir networks with GSM. Cable &Wireless created a separate brand forits GSM segment (bMobile), andMexico’s Telcel touted the advantagesof GSM’s global connectivity toMexican professionals.
By 2004, GSM was gaining 57 per centof all new subscribers in the regionand consistently surpassing analysts’projections. In the second quarter of2004, GSM’s regional subscriber baseovertook that of CDMA. In March2005, total regional GSM subscriberssurpassed TDMA subscribers, achiev-ing a 39 per cent market share, versus36 per cent for TDMA and 24 per centfor CDMA. By June 2005, the regionalGSM family had mushroomed fromjust two million in 2000 to more than89 million.
Market consolidation andGSM growth
GSM is also gaining momentumthrough the geographic and techno-logical consolidation underway in theCALA mobile markets. The departure
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GSM
of Verizon Wireless from Argentina inJuly 2003, and Bellsouth’s sale of its11 mobile properties in the region toTelefónica Móviles in March 2004reduced the competitive field to threemajor players: America Móvil (AMX),Telecom Italia Mobile (TIM) andTelefónica Móviles (TEM), which nowserve a combined 76 per cent of themarket. AMX and TIM are nowinstalling GSM overlays on TDMA andCDMA networks and adopting GSMfor all new networks.
More than 50 per cent of AmericaMóvil’s subscribers and more than 73per cent of TIM’s subscribers in LatinAmerica now use GSM. TelefónicaMóviles operates a mixture of GSM,TDMA and CDMA properties, but itcommitted to investing US$5 billionin GSM-based service, as part of itsacquisition of Mexican CDMAprovider Pegaso PCS, and it installed aGSM overlay on the former BellsouthCDMA IX property in Colombia.
Meeting market needs
GSM’s appeal to a broad range ofsocio-economic segments helps opera-tors to earn a return on their invest-ment. The CALA region’s low, underUS$20, ARPUs (average revenue peruser) and a predominantly (more than80 per cent) prepaid customer baseforce operators throughout the regionto procure the lowest priced handsetsto attract lower-income subscribers.Some operators have as many as threemodels priced at US$20. Phones withmore functions can be had for as littleas US$41.
Low-cost GSM has attracted economicgroups previously excluded from themobile revolution and driven majorincreases in mobile adoption.Although mobile usage in Brazil’supper income groups has remainedstable recently, GSM acquired nearly25 million customers by sharplyincreasing mobile usage among lowerincome groups.
Mobile penetration in the low-incomesegment rose from 22 per cent in 2002to 45 per cent in 2004, the ‘very lowincome’ group’s penetration rose from10 per cent to 24 per cent and amongthe poor from 2 per cent to 8 per cent.
GSM operators will be able to respondmore readily to price pressure,because of advances in GSM handsetdesign and network architecture. TheEmerging Market Handset initiativeof the GSM Association gives GSMoperators in emerging markets the
option of deploying attractive, highquality, ultra-low cost handsets with awholesale factory cost below US$40and a US$30 handset is in the works.More than 200 million people in theCALA region live below the povertyline, so these low cost devices will letGSM operators offer affordable con-nectivity to this massive group of cus-tomers.
Advances in GSM network architecturepermit lower capital and operationalexpenditures critical to sustainingprofitability in lower APRU markets.GSM’s messaging technology facili-tates customer self-care, and elimi-nates ‘scratch cards’ for prepaidaccount top-up.
Using SMS or USSD signalling, cus-tomers make electronic micro-payments.This helps build ARPU and eliminatesthe cost of printed cards. Directionaland high-output antennas, and tower-mounted base transceiver stations,increase GSM coverage and reducecosts.
Advanced versions of GSM that offerdata transmission will supplementfalling voice revenues. WithGPRS/EDGE-based services, opera-tors can offer customers a multitude ofinnovative services. EDGE providesdata throughput speeds of 100-130Kbps and increases network voicecapacity. Twenty-two operators infourteen countries and territories inthe region have announced commer-cial EDGE deployments.
In addition to wireless Internet accessfor business customers, EDGE enablesnew value-added services, many web-based. A typical experience is that of aComcel customer in Colombia whouses EDGE to access the Internet froma dredge working outside a Colombianport.
In Chile, customers can select infor-mation offerings (including videosfrom a local television station), trans-actions (including games of chance,account payments and stock purchasesfrom the local stock market) and inter-action (through Multimedia MessagingService (MMS) and chatting with up tofive people simultaneously).
EDGE is adding significantly to rev-enues from value added services.TIM’s Brazilian operations featureTIM TV, ringtones, Java games, videomessaging, Blah chat and peer-to-peermessaging. The popularity of theseservices is helping TIM to surpassmarket leader Vivo and generate thehighest ARPU in the market. America
Móvil has also registered higherincome with its EDGE-enabled net-works and recent emphasis on value-added marketing.
GSM evolution and thewireless future of the CALAregion
GSM economies of scale are strength-ening GSM’s competitive position inboth North America and Europe. GSMremains the only standard commer-cially available in all four bands usedin the region – 850, 900, 1800 and1900 MHz.
Applications developed for Europeanand North American markets can eas-ily be adapted regionally and thegrowing number of regional GSMusers is creating a critical market massfor local software developers. Theresult will be more, better and richermobile GSM-based applications forthe region’s enterprise and consumermarkets.
Regional operators will also benefitfrom enhancements that have madeGSM’s spectral efficiencies second tonone. GSM frequency reuse hasalready increased dramatically by theAdaptive Multirate Codec (AMR), fre-quency hopping, dynamic frequencychannel allocation and other tech-niques.
The addition of EDGE further increas-es spectral capacity to meet the needsof the region’s constantly growingvoice market. Furthermore, newUMTS/HSDPA standards-basedequipment will bring even higher datarates, lower the cost of conventionalvoice and preserve the traditionalGSM-based international roaming.This will let GSM operators continueto compete profitably, even offercapacity-based marketing plans thatgive customers large buckets of min-utes and even unlimited calling amonguser groups.
The many advantages of the GSM-based evolution are solidifying the roleof GSM as the primary technology forraising connectivity in the CALAregion. This will widen GSM’s leadover other wireless technologies inregion. The GSM portfolio of tech-nologies – GPRS, EDGE andUMTS/HSDP – will be the de factomobile standards in the CALA regionfor the foreseeable future.
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by Alejandro Nestares, Business Development and Product Marketing Director, CALA, Intec Telecom Systems
Next generation service management – a single view ofthe customer
To grow, operators need to detect market trends, develop new services and flexibly billfor them. Traditional billing systems gather data after the fact and bill monthly. Pre-paidsystems, though, work in real time. Existing systems cannot track subscriber usage pat-terns or handle the real-time demands of fully converged fixed, mobile, voice and dataservices. Operational Support System (OSS) Service Management platforms let opera-tors track subscriber trends, offer innovative service bundles and bill multiple serviceswith a single, converged, bill.
The rapid deployment of broadbandaccess in Latin America is enabling thegrowth of new and innovative packet-based services. This has a tremendousimpact on Latin American networkoperators.
To support the new real-time services,operators need an ‘always-on’ ServiceManagement platform, at the heart oftheir operational support systems(OSS). This ‘always-on’ service poten-tial is dramatically changing the wayoperators in the region are doing busi-ness.
In Latin America today, telephonesubscribers receive a single bill at reg-ular monthly intervals. Since therecent deregulation, competitive serv-ices and business models haveemerged and convergent billing sys-tems have come to the rescue allowingthe billing of multiple services using asingle or ‘convergent’ bill. Fixed andwireless, pre- and post-paid, voice anddata operations are converging intoone single business model with onesingle bill.
Brasil Telecom is a perfect example ofthis new business model: it has beenthe region’s pioneer in successfullyconverging their wireline and wirelessbusiness into one single operation. Aconvergent billing system was a keyfactor in their success. Given this suc-cess and the advance of deregulation,other operators in Brazil, like GrupoTelemar, are considering convergingtheir wireline and wireless operationswith Telemar and Oi to be more com-petitive and react to market andindustry demands.
Other operators, like América Móvilesand Telefónica, are also working tolead the region’s wireline and wirelessmarkets. They know that to lead theymust focus on convergence and centretheir operations upon the customer.
The recent purchase of TIM Peru byAmérica Móviles and the fight over thestate owned Colombia Telecom areclear indicators that the future in theregion relies on convergent opera-tions. Both Telefónica and AmericaMóviles have all the ingredients to
lead the convergent revolution in theregion, but they face operational chal-lenges reacting to the market.
Convergent billing is a key factor intheir operational transformation.They must migrate from their existingsystems into an ‘always-on’ systemcapable of real-time, cross service,charging for their entire operation. Itrequires a new architectural para-digm. Separate systems cannot pro-vide integrated support for wireline,wireless, prepaid and post-paid, voiceand data customer types. It should bepossible to pay for any service using,as needed, any payment method avail-able.
‘Always-on’ service management sys-tems must provide a single view com-bining all account types, customertypes and services. Then, too, allaccounts should be accessible in real-time through the OSS and by the com-munications network itself, and givethe operator a real-time financial viewof the converged customer and theconverged business.
Next generation billing
Alejandro Nestares is the Business Development and Product Marketing Director for Billing of Intec’sLatin American region. He joined Intec when it acquired ADC. At ADC, he managed business develop-ment in Spain, Portugal and Latin America. Before joining ADC, Mr Nestares was responsible for busi-ness development in Europe and the Middle East for Portal Software. Mr Nestares has more than eightyears of experience working with next-generation billing systems.
Alejandro Nestares holds a bachelors degree from the University of Houston.
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Supporting Journal
Pragati Maidan, New Delhi, India
21-23 March 2006Pragati Maidan, New Delhi, India
21-23 March 2006
nvergenceIndia 2006nvergenceIndia 2006
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Ushering the Infocomm Revolution...Ushering the Infocomm Revolution...
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Incorporating:Incorporating:
Next generation billing
Prepaid architecturallimitations
In traditional OSS infrastructures,there is a clear separation between thenetwork and support systems. In tra-ditional post-paid billing, chargeableevent records proceed to the back-office for billing via a mediation sys-tem.
The emergence of consumer pre-paidmobile services made it necessary tocharge accounts in real-time, so thenew billing systems had to residedirectly within the network. Today,converged operations call for the con-vergence of traditional and real-time,pre-paid, charging systems.
Although the success of the pre-paidservice model in Latin America con-tinues unabated, pre-paid solutionssuffer from a number of serious archi-tectural limitations that convergentbilling systems must resolve, includ-ing:
- Customer relationships cannot bemodelled and applied in real-time.With little or no interaction betweenstand-alone databases (balance man-agers), special customer and discountrelationships cannot be modelled andsupported on today’s pre-paid sys-tems. This means that services such asPre-paid Business Accounts, chargeguiding from pre- to post- paidaccount, Friends-and-Family orParents-and-Kids type service bundlescannot now be offered to pre-paidsubscribers;
- Inability to differentiate pre-paidservices. In both the mobile and fixedworlds, service differentiation is diffi-cult to achieve. Pre-paid services lookand feel the same in most of the world.From Spain to Argentina, the pre-paidsubscriber experience is almost identi-cal: there are only a limited number ofservices – voice, SMS, perhaps voice-mail and occasionally roaming;
- Pre-paid does not readily supportdata services. Some pre-paid systemscharge for pre-paid data in real-time(e.g. a ring-tone download), using cir-cuit-switched transport and transactioncharging. While ‘atomic’ or once-offcharges are possible to levy, they cannotcharge for usage and volume-basedpacket data services in real-time, notto mention concurrent voice, data orm-commerce services;
- Pre-paid is difficult to upgrade fornext generation services. Pre-paidbilling platforms design cannot handledata services, so most operators must
use ‘bolt-on’ billing systems to supportdata services. Pre-paid vendors areresponding, but old, tired, networkarchitectures confine them;
- Inflexible rates and limited tariffselection. Traditional pre-paid plat-forms cannot offer flexible, innova-tive, tariffs and discounts. A flexible‘rules-based’ approach facilitates mar-keting in highly competitive situa-tions.
The support systemchallenge – getting it right
Dealing with all these challenges is atough mark for convergent billing sys-tems and convergent operations tomeet. The key challenges operators inLatin America must face to achieve cus-tomer ‘closeness’ or convergence are:
- Overcoming the limitations of exist-ing post-paid service architectures.The challenge is to migrate from tradi-tional batch back-office mainframeoperations to real-time revenue man-agement processes;
- Getting to know customers. By com-bining a single view of customer usagefor all possible services with a realtime dynamic transaction manage-ment architecture, operators will beable to use cross service customerinformation to personalise each andevery one of the customer’s interac-tions in real time. They will be able topersonalise each CDR (call detailrecord) using the customer’s usageand behaviour information in realtime.
For example, a pre-paid internationalroaming call might earn a deep dis-count based upon total internationalwireline usage, including interna-tional calls made from the customer’shouse;
- Getting to value customers.Referring to the point above, it isessential that service providers learnabout their customers’ needs. Byobserving customer usage patterns,service providers can quickly detectmarket trends, prepare targeted mar-keting campaigns with partners andbuild revenue-making product andservice offerings;
- Giving customers what they want,whenever and wherever they want it.Access to services should not bedependent upon a particular paymentmethod. Any payment method thesubscriber prefers to use at the time ofpurchase should be allowed by the sys-tem.
Next generation Convergent ServiceManagement architectures place thecustomer at the heart of the new oper-ator’s business model. In LatinAmerica, this model must supportservice delivery by any type of trans-port: dial-up Internet, 2G, 2.5G or 3Gmobile access, xDSL lines or WiFiservices.
The new Architecture must provideLatin American operators with a sin-gle view across all pre- and post-paidaccounts, as well as a real time servicemanagement capability.
Operators must allow subscribersacross the region to access the servicethey want, whenever and whereverthey want it and, most importantly,have them pay for it using any pay-ment method they wish, or which theoperator selects, on a given occasion.This gives operators the tools to differ-entiate themselves from their com-petitors by satisfying the needs of theircustomers and to exploit new revenueopportunities, limited only by theirimagination.
Figure 1: Convergence billing is a key factor in the operational transformation.
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by James M. Bell, Managing Director, CALA Region, Radvision
Converging communications in Latin America
Half of Latin America’s people live on US$1.50 per day or less. Deregulation, privatisa-tion and innovative marketing has brought communications services to people who, tenyears ago, had little hope of ever using a phone. Calling-party-pays mobile services makeit possible for people and businesses that cannot afford a fixed phone to buy a pre-paidcell card for US$5/month and receive calls free. In cities, people can access the Internet,paying by the minute, at ‘cabinas’ and cafés.
James M. Bell is the Managing Director of the Caribbean and Latin America (CALA) Region forRadvision Ltd. He served previously as Managing Director for Polycom Corporation’s CALA Region andas Managing Director, Latin America and Asia Pacific, for eShare Communications (MelitaInternational). Mr Bell founded VistaTel, a top videoconferencing reseller in the United States and hasserved in various management roles within AT&T, Fujitsu, Philips Electronics and the PictureTelCorporation.
James Bell is a graduate of the University of Minnesota, Minneapolis, and holds a B.A. degree inCommunications. He has been a key speaker at various industry events and has been a guest lecturer forthe Graduate Program in Telecommunications at St Mary’s University in Minneapolis, Minnesota(USA). He is a member of the Executive Committee of the Telecom Committee of the AMCHAM of Peru.
Converging communications
There are approximately 550 millionpeople in Latin America. Over 50 percent of these people live on US$1.50per day or less, a startling figure thathas to be taken into account by corpo-rations evaluating where and how tomake their global investments.
We speak of ‘converging communica-tions’ in Latin America, but it remainsan elusive concept for most of thepopulation. Does this mean that it willnot arrive? Not at all. The sameadvanced telecommunications andInternet services found in the USA areavailable in nearly all Latin Americanmetropolitan and secondary markets.How, though, can someone makingsubsistence wages participate in thiscommunications boom?
Deregulation of telecom servicesoccurred later in Latin America thanin the USA. For the most part, poorlyoperated government telecom servic-es were privatised within the pastseven to ten years. What did thismean to the average person?Typically, getting residential tele-phone service from a governmenttelephone monopoly might take two
years to install and cost US$1,500.After privatisation, telephone instal-lation takes about a week and costsabout US$100. Monthly service costs,depending upon the country, are nowsimilar to the USA at aboutUS$25/month. Yet even US$25 permonth is far beyond the budget ofmost of the population.
Fixed line
In the USA, fixed line service penetra-tion has topped 95 per cent for manyyears. Latin America has never comeclose to this. Mobile subscribers inLatin America now exceed fixed linesubscribers. Unlike the USA, mostmobile operators in Latin Americause calling-party-pays billing – onlythe party calling a mobile phone ischarged.
Calling-party-pays mobile servicesmake it possible for many people whocannot afford a fixed-line phone, tobuy a pre-paid cell card forUS$5/month and receive calls free.This means that anyone can call theirgardener or neighbourhood fruit ven-
dor, because these can now afford toown a mobile phone. They can man-age their business and receive orders,etc, without incurring unaffordableexpense.
Because the fixed line penetrationpercentage of households is also rela-tively small, naturally the number ofhouseholds that have DSL services isstill smaller. This is also true of cablemodem service, as the percentage ofpirated cable connections is very high.
Much of the public, at least in largercentres, have access to the Internetand email. Public access Internet‘cabinas’ have cropped up throughoutmany Latin American cities, providing‘walk-in’ Internet access for peoplewho do not own computers or cannotafford dedicated DSL or cable modemservice. These Internet cabinas chargeby the minute, giving many an oppor-tunity to surf the web, check theiremail accounts, apply for jobs andmore.
The typical business drivers for LatinAmerican telephony, while there aredifferences, are roughly the same as in
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Converging communications
the USA. Businessesneed telecommunica-tions to increaseproductivity anddecrease costs.Although labourcosts are lower, pricesensitivity in LatinAmerica is higher.
While businesses inthe USA complainabout high gasolineprices that raisetransportation costsin Lima, Peru, wheregasoline costsUS$4 . 6 0 / g a l l o n ,there is a differentoutlook about gasprices.
Importation costsaffect the cost/benefitanalysis of any invest-ment. Depending onthe country, the land-ed price of legallyimported technologyis between 1.2 and 2.1of the FOB USA price.As a result, one needsto obtain between 20and 100 per centmore in benefits tojustify many purchases than onewould in other regions.
Accordingly, many manufacturers setup assembly facilities in major marketcountries like Brazil and Mexico toavoid these high importation costs.These facilities assemble the productswith using enough local labour toexempt the product from duties. Thissolution works when the market is bigenough to justify the plant invest-ment, smaller companies can rarelyafford the investment.
The USA is a single, homogenousmarket, but Latin America consists ofmore than 20 countries, each with dif-ferent rules, regulations and ways ofdoing business.
Latin America typically accounts foraround four per cent to eight per centof technology sales worldwide. Inother words, companies like Nortel,Avaya, Cisco, Microsoft, etc, typicallysell this amount in the Caribbean andLatin America (CALA region).
‘The’ solution
Converged communications are justnow arriving in Latin America.Powerful new collaboration tools
bring voice, video and data collabora-tion capabilities at the desktop ofevery computer user in the world.Software packages will soon bring thefunctionality of advanced PABX sys-tems to the desktop computer.
At one time, many thought that video-conferencing was ‘the’ solution. Wenow know that it is just a part of amuch larger and more valuable busi-ness solution called collaboration.
Each year, many were convinced,would be the ‘breakout’ year – theyear the industry would take off andvideoconferencing would become amainstream business tool likecopiers, faxes and PCs. This neverhappened for several reasons:
1. Videoconferencing did not bringenough value. Without full collabora-tive capabilities, videoconferencing
solutions just did notgenerate enoughreturn to justify theinvestment;
2. Network reliabili-ty, or call connec-t i on/ comp l e t i on ,with ISDN was poorcompared to today’strue broadband solu-tions;
3. There was no com-pany large enough tocreate a market forvideoconferencing byitself. There were,and are, good,well-managed con-ferencing technologycompanies. Theywere not largeenough, though, topush collaborativetools onto everydesktop and laptopcomputer and intoevery conferenceroom or boardroom.
Now major softwareplayers, global cham-pions of convergingc o mm u n i c a t i o n
through real time collaboration overIP networks, have legitimised theindustry.
What does this mean for convergingcommunication in the Latin Americanregion? With a major player now seri-ously entering the real time collabora-tion space, we will see the cost peruser of true collaborative solutionswill go down.
This is especially important in CALA,as this region is more price sensitivethan the USA. The increased demandfor videoconferencing will also generatemore demand for broadband servicesand an increase in network build-out bythe service providers. Bandwidthremains relatively expensive in LatinAmerica and an increase in demandwill bring increased competition andhelp drive down prices.
Someone once said that LatinAmerica is where you should go whenyou know that the world is coming toan end, because everything arriveshere 10 years later. Not any more.Converging communications is rapid-ly changing all that.
‘The typical businessdrivers for LatinAmerican telephony,while there aredifferences, are roughlythey are the same as inthe USA.’
Figure 1: In the USA, fixed line service penetration has topped 95 per cent. Latin Americahas never come close to this.
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by Helena de Araújo Lopes Xavier, Senior Partner, Xavier, Bernardes, Bragança, Sociedade deAdvogados
IP and the law in Latin America
Technological evolution has shaken the legal frameworks in the telecommunications sec-tor. New technology based upon the Internet Protocol has raised questions in countlesslegal fields from property rights to taxes. Technological convergence has blurred the linebetween the traditionally unregulated information technology sector and the tradition-ally regulated telecommunications sector. The regulation of Voice over IP (VoIP) net-works presents serious difficulties as does the production and distribution of content onthe Internet, intellectual property rights and the carriers’ control over creation.
Helena de Araújo Lopes Xavier, is a lawyer and a senior partner at Xavier, Bernardes, Bragança –Sociedade de Advogados, with offices in Rio de Janeiro, São Paulo, Brasília, Joinville, in Brazil, andLisbon and Madeira, in Portugal. As a business lawyer, she practices administrative law, focused on ICTand telecommunications, airports, public service concessions, tax law and foreign investments.
Mrs Xavier is the author of ‘The Special Competition Regime in Brazilian Telecommunications Law’, aswell as numerous articles in Brazil and abroad. She is a member of the Brazilian Association ofComputer and Telecommunications Law, the Brazilian Institute of Tax Planning, TELECOM-ABT, TEL-EBRASIL, the Computer Law Association, the United Telecom Council, Deutscher Anwaltverein and thePortuguese Association for Communication Development.
Helena de Araújo Lopes Xavier earned her degree in Law from Lisbon University. She has lectured onAdministrative Law at Lisbon University and International Telecommunications Law at the Institute ofLegal Research (IPEJUR – Rio de Janeiro and São Paulo).
Legal and regulatory issues
Much has been said about the devastat-ing impact of technological evolutionupon the stability of legal frameworksin the telecommunications sector. Thedevelopment of new communicationtechnologies based on the IP protocolhas raised countless legal questions,pertaining to fields as varied as civillaw, intellectual property rights, taxlaw, competition and regulatory law, tomention just a few examples.
One of the most relevant legal issuesraised by the dissemination of newcommunication technologies refers tothe definition of an adequate regulato-ry approach to be taken with respect toservices rendered with the use of IPover convergent networks, such asVoIP or Internet content distribution.
Among the major difficulties faced byregulators is the problem of determin-ing how the new IP-based services fitinto the existing legal and regulatoryframework and, consequently, if andhow they should be addressed.
The convergence brought by techno-logical evolution has blurred the fineline that separates information tech-nology, traditionally unregulated, from
telecommunications services andmedia (broadcasting, cable TV, etc),which are subject to numerous regula-tory restrictions and obligations.
Challenges presented by the conver-gence of networks and services includethe need to determine the extension ofregulatory obligations to be imposedupon providers of new services, havingin view the need to ensure minimumquality and reliability standards, whilestimulating the development of newservices and networks and promotingcompetition.
The regulation of voice services offeredover IP networks, for example, pres-ents serious difficulties in view of theirconsiderable differences in comparisonwith traditional telephone services.
An inevitable by-product of conver-gence is the increasing demand foraudiovisual content, especially in thecontext of triple play (voice, data andvideo). This raises important issuesrelated to the production and distribu-tion of such content, such as foreigncapital restrictions, intellectual proper-ty rights and the carriers’ control overcreation.
This article aims to examine how theBrazilian legal and regulatory frame-works deal with these issues and howthe national regulatory agency, ANA-TEL, has responded to the challengesof modernisation and convergence.
Telecommunications, Internetand media sectors in Brazil: abrief overview
Telecommunications
The process of liberalisation of theBrazilian telecommunications marketbegan in 1995, with ConstitutionalAmendment 8/95, which gave autono-my to the telecommunications andbroadcasting sectors, by submitting theformer to the jurisdiction of one soleand independent regulatory authority(art. 21, IX).
The Brazilian Federal CommunicationsAgency (ANATEL), created in 1997 byLaw 9472/97 (LGT), which also estab-lished criteria for the privatisation offederal concessionaires of fixedswitched telephone service, rules con-cerning the gradual liberalisation, andspecific competition rules within
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Legal and regulatory issues
telecommunications markets, with theintent of stimulating user benefits aswell as social and economic growth.
In a very forward-looking approach,art. 60 LGT defined telecommunica-tion service in a very broad, neutral andconvergent manner as any activitywhich allows the offering of ‘transmis-sion, emission or reception, by wire,radio, optical means or any otherelectromagnetic process, of symbols,characters, signals, writing, images,sounds or information of any nature’.However, licences are still grantedaccording to different modalities ofservices as defined by ANATEL, whichmay be critical to innovation in newservices delivery models.
The exploitation of any telecommuni-cations service or networks is generallyconditioned upon obtaining a licencegranted by ANATEL, with the excep-tion of some specific situations inwhich a mere communication to ANA-TEL is required. There are no restric-tions to the technology that may beemployed and, with exception ofmobile services, there are no limits tothe number of operations.
The LGT also determines that networksshall be organised to form integrated‘highways’ so that traffic can freely cir-culate among them and imposesmandatory interconnection between allnetworks supporting services offered tothe public, the collective interest serv-ices, guaranteeing their integratedoperation. Furthermore, with respectto the networks, the LGT conditionsthe property rights to the duty of com-pliance with their social role. In thisway, interconnection is a major instru-ment for convergence.
There are no restrictions to foreigncapital in regards to the exploitation oftelecommunications. This has resultedin significant investments, driving theachievement of universal servicesgoals. Constitutional Amendment 6/95completely revoked the general princi-ple of different treatment for foreigncapital, which was contained in article171 of the Constitution.
Foreign companies entering the mar-kets of collective interest services arerequired only to incorporate a Brazilianholding company to control the operat-ing company. Any operator either ofcollective or restricted interest servicesmust be a Brazilian company.
Information technologies
In addition to the legal definition oftelecommunications services, Article61 LGT establishes a legal definition ofvalue added services, which expressly
declares that such services are nottelecommunications services and clas-sifies the value added service provideras a user of the underlying telecommu-nication service or network.
Therefore, with exception of datatransmission itself any Internet servic-es are outside ANATEL’s jurisdictionand may be rendered free from any reg-ulatory constraints.
Broadcasting and media sectors
In accordance with broadcasting’s roleof offering broad and indiscriminateaudiovisual content to the public ingeneral, and its impact upon social val-ues, the legal obligations that apply tobroadcasting activities differ substan-tially from those that apply to telecom-munications services.
Article 222 of the Brazilian FederalConstitution provides that televisionand radio licences may only be grantedto Brazilian individuals or Braziliansnaturalised for over ten years, or tocompanies organised according toBrazilian laws and with headquartersin Brazil. At least 70 per cent of thetotal capital and of the voting capital ofthe service provider must belongdirectly or indirectly to Brazilians orBrazilians naturalised for over tenyears, who must manage activities anddefine the content of the broadcasting.
Furthermore, the same article estab-lishes that only born Brazilians orBrazilians naturalised for over tenyears may have editorial responsibilityand be in charge of the selection anddirection of the broadcasted pro-grammes.
Broadcaster’s activities are charac-terised by the right to organise theirown networks.
In order to broadcast terrestrial televi-sion or radio programmes, it is neces-sary to obtain a concession from thePresident of the Republic – for region-al or national TV or sound broadcast-ing, or a permission from the Ministryof Communications – for local soundbroadcasting, through a competitivebidding process. Approval by theNational Congress is required for thegranting and the renewal of licences.The use of the necessary radio frequen-cies requires an authorisation by ANA-TEL.
Conversely, Cable Television,Microwaves and Satellite Television arenot subject to such rigid restrictions.
Microwave and Satellite televisionservices suffer no restriction at all as toforeign capital ownership.
Cable television is regulated by a spe-cific law and is subject to a concession,granted through a competitive bid.This law was enacted prior to theAmendment of the Constitution thatabolished the general principle of dif-ferent treatment for foreign capital,and includes foreign ownership limits(49 per cent). However, since cable tel-evision is not listed in the Constitution,the discrimination may be challenged.In fact, such pre-existing restrictionscontradict the constitutional principleof non-discrimination, which itself pre-vents a wide interpretation or analo-gous application of the broadcastingconstitutional rule.
Convergence in the Brazilianlegal framework
It is therefore clear that under theBrazilian legal system, telecommunica-tions, broadcasting and pay-TV, mediaactivities and IP-based services ren-dered through the Internet are distinctand autonomous sectors, subject tocompletely different constitutional,legal and regulatory norms.
While broadcasting is characterised bya broad and indiscriminate offer ofaudiovisual content to the public ingeneral, telecommunication is legallydefined as the mere transmission,emission or reception of any kind ofinformation signal.
Pay-TV services require a serviceagreement between the user and theprovider, while Internet technologies,on the other hand, make available awide range of content which is accessedand chosen selectively by each individ-ual user.
For these reasons, it is not acceptableto compare telecommunications,broadcasting, Pay-TV and Internet-based services for the sole purpose ofimposing similar legal restrictionsupon all providers.
In fact, due to its continental dimen-sions and the need for social and eco-nomic growth, and inclusion, Brazilhas a dramatic need for voice and dataconnectivity.
Therefore, in addressing convergencein Brazil, the legislator and the regula-tor should look at the issues raised byconvergence from all sides, since inclu-sion and growth depend on adequateincentives to diversified investmentsand upon the harmonic development ofall sectors.
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