CANTO Weekly Newsletter – BNamericas 03/13/15

CANTO Weekly Newsletter – BNamericas 03/13/15

>

<

Roundup: Conatel Paraguay, Azteca Comunicaciones, Siget El Salvador – Regional

CWC deploys 4G LTE network in Panama – Panama

DirecTV expanding in South America with new center in Brazil – Regional

Non-telecom Industries must be involved in development of 5G, says Ericsson CTO – Regional

Consumer loyalty to traditional telcos an advantage over OTTs – Regional

Roundup: Conatel Paraguay, Azteca Comunicaciones, Siget El Salvador – Regional Paraguay’s telecom regulator Conatel will start reviewing the telcom bill next week at the latest with a public hearing, the watchdog’s president Eduardo Neri González told newspaper Última Hora.

The draft of the new law was changed after the last analysis, which will have to be reviewed in the hearing. Conatel wants the law to avoid a near-monopoly situation.

“The analysis should not be just technical,” Neri said.

The draft will be submitted for approval by Paraguay’s national congress.

***

Azteca Comunicaciones has finished its core network of 20,500km of fiber optic, covering 80% of Colombia.

The network reaches 769 municipalities, and will offer IPTV services to residents.

The expansion of the previous 19,000km network was requested by the government in October, in order to increase the number of people connected. Total investment in the network reached US$245mn, including US$10mn for the expansion.

***

Salvadorans spend US$1.2mn a day on mobile telephony, according to data from watchdog Siget.

The first half of 2014 brought in revenues of US$220mn for all operators. Revenues from interconnection brought in US$81.1mn. Phone calls between numbers from the same operator contributed US$58.2mn, whereas calls between numbers of different operators reached US$37.9mn in revenue. International calls brought in US$43.1mn, the Siget figures show.

In total, the telecom market in El Salvador was worth US$711mn during the first half of 2014. Revenues from fixed telephony reached US$78.0mn, fixed internet broadband brought in US$24.8mn and mobile internet broadband US$26.4mn.

CWC deploys 4G LTE network in Panama – Panama Cable & Wireless Communications Panama (CWC) has launched its 4G LTE network, the first in the country, the company said in a statement.

The network took two years to be completed and required an initial investment of US$10mn. It will build up on CWC’s existing broadband, allowing for 10Mbps downloads.

Panama joins the group of Latin American countries that have effectively deployed 4G LTE services. The trend is expected to continue. According to the GSM association (GSMA), LTE networks will reach over three quarters of the Latin American population by the end of 2020.

Currently, the technology is available to a little more than 2% of Latin Americans.

Last year, the region saw 19 LTE launches, including four in Colombia alone and two each in Costa Rica and Peru. The launches brought the number of LTE subscriptions in Latin America to 6mn – roughly 1% of the world’s total.

Brazil is currently the country with the largest number of LTE deployments – seven already working and two more on the way. Colombia is second with five deployments, Mexico has three limited deployments in the AWS band, and Chile has three in 2.6GHz.

DirecTV expanding in South America with new center in Brazil – Regional While it waits for all regulatory nods to be incorporated by US giant AT&T, satellite pay TV group DirectTV is pushing ahead with new investments.

After reports that the company would launch wireless broadband in Buenos Aires bundled with DTH services this year, DirecTV announced in the past week it will disburse 1.3bn reais (US$448mn) to build a new broadband center in Brazil.

The facility will be in a tech pole in São Paulo state’s Jaguariúna and built by DirecTV’s local subsidiary Sky Brasil, replacing an existing structure. According to the company, the center will serve not only clients in Brazil but in all the South American markets where DirecTV operates.

Sky is also preparing the launch of a new satellite, the Sky B1. Both the center and the satellite are expected to start operations in the first quarter of 2016, in time to be used during the Olympic Games, which are to take place in Rio de Janeiro in August next year.

The facility will be three times larger than the existing center – becoming “one the most modern worldwide and the largest in Latin America” – and will enhance the company’s transmission capacity to support subscriber growth and rising demand for data in its networks.

Sky ended 2014 with a little over 5.64mn subscribers (28.8% market share) in Brazil. Latin America-wide, DirecTV had around 20mn customers by the end of 3Q14.

In Brazil, the company does not just provide pay TV services. With equipment provided by Nokia Networks, Sky became in 2011 the first operator to launch LTE on TDD technology in Latin America, with an operation in Brasília after acquiring MMDS carriers.

Sky Brasil also acquired for 90mn reais in a 2012 4G auction blocks of frequency in the 2.5GHz spectrum. Currently, Sky’s 4G LTE is active in about 33 cities.

Non-telecom Industries must be involved in development of 5G, says Ericsson CTO – Regional Input from a wide range of industries will be required for developing the next generation of mobile technology, dubbed 5G, as an estimated 50bn devices will be connected by 2020, affecting all areas of the economy and society, said Ericsson’s CTO Ulf Ewaldsson.

According to the roadmap for 5G, in 2014-15 industry standards organizations are defining certain parameters of what 5G will look like and (ITU, 3GPP, Rel 13) test bed trials of speeds already being carried out.

This process will deepen in 2016-18 with industries and academia being engaged in the discussion. Then from 2019-20 we may see the first commercial deployments.

“With 4G the telecoms industry sat down and decided on the standard. With 5G we’re incorporating other industries in the discussion. If we don’t do that the network will become obsolete,” Ewaldsson said while speaking to journalists during the Mobile World Congress in Barcelona.

“We thought at first there would be one API for 5G. But now we’ve found that every industry has its own idea of how they use mobility,” Ewaldsson said.

USE CASES

Numerous new use cases have been identified or 5G. First of all there will be broadband everywhere with high traffic capacity.

3G has capacity for 2Mbps, HSPA (14Mbps), LTE (100Mbps), the new generation of LTE-Advanced can reach 1Gbps and 5G is expected to have capacity of over 10Gbps in certain scenarios and 100Mbps generally available.

There will be massive machine-to-machine communication and with low latency. This will be important for applications where speed is critical, for example a device in a car that warns drivers of a potential hazard ahead.

Video is expected to account for over 50% of traffic in 2020 and TV will become increasingly personalized and used in companies for training and other purposes.

Energy consumption will be much lower on devices. Connected sensors will have batteries that can recharge themselves using solar power and will save energy by only “waking up” when needed and then switching off again.

With 5G technology a machine can be controlled from thousands of kilometers away using mobile networks (Photo: BNamericas)

INTER-LINKED INDUSTRIES

Ericsson set up a new unit a year ago to build tailored solutions for three key verticals – utilities, transport and public safety. In Latin America the unit merges the latter two into one vertical called smart cities and also has utilities and financial services.

Speaking during a presentation, Ericsson’s VP of industry and society Orvar Hurtig told the Barcelona event that different industries will be intricately linked in what Ericsson calls the “Networked Society”.

“Firemen won’t put out fires, they’ll make sure they don’t happen,” Hurtig said. People traveling to work will park their cars at the train station, get on the train with a seat they reserved on line, get off at the other end, pick up a bike they have previously reserved and ride to work, he added.

By using smart metering, grids will be able to avoid peak hours by balancing the demand for energy. Roads will be used in a more efficient way. “This is about to happen,” according to Hurtig.

Ericsson expects 25% of its revenue to come from non-operator related telecoms activity in 2020.

THE NEW LOOK NETWORK

The 5G network will differ largely from 4G in that it will be cloud based and incorporate network virtualization and software-defined networking to give operators greater ability to manage their networks and build applications on top of them.

Hurtig said there will “a common network platform with dynamic and secure network slices,” dedicated to different industries be that healthcare, cars or retail. And industry input is needed to ensure the network is built in the right way to guarantee those needs are met.

Developing 5G will also require exploring previously untried high frequency bands above 6GHz, which have the capacity to manage high speed traffic.

Consumer loyalty to traditional telcos an advantage over OTTs – Regional While Latin Americans are increasingly turning to disruptive over-the-top (OTT) services such as Netflix, Amazon, and Google, most users still rely on the type of end-to-end support and service traditional telecoms operators provide.

Such perceptions, according to customer management solutions provider Amdocs, offer a unique advantage to telcos in the competition with digital players for customer preference.

“While it is true that almost a third of Brazilians and Mexicans would leave their operators and migrate to OTTs if these provided mobile connectivity, the majority of them would not,” Amdocs VP for Latin America Nelson Wang told BNamericas. “And when they are asked why they would stay, customer care/customer experience is the first answer.”

“The fact is that users largely recognize traditional telecoms service providers have an advantage by managing the infrastructure, the network, customer service and billing.”

Wang was referring to the findings of Amdocs’ Customer Experience Spotlight 2015 survey, commissioned to Market Research (IEMR) and released earlier this month.

The study showed that 80% of respondents would not consider replacing their current service provider even if companies like Amazon, Google and Facebook offered them connectivity. The top three reasons were privacy issues, internet quality and distrust, according to the survey.

In Brazil and Mexico, the rate of loyalty is slightly lower. In Brazil, for example, 26% would switch telcos for OTTs if the latter offered connectivity.

To date, the expansion of services such as Netflix, in Latin America and elsewhere, has not necessarily been followed by a discontinuation of other telecom services. According to a Digital TV Research study, Latin America had 4.85mn Netfllix subscribers at the end of Q3.

That study forecasts non-US subscribers will reach almost 104mn by 2020, of which 24.4mn will be in Brazil, 10.6mn in Mexico and 12.3mn in the rest of Latin America.

Wang said the advantage of telcos must be combined with the offer of innovative and personalized services, as well as with bundled, multi-play packages combining more than one telecom service.

One of them is Wi-Fi, the executive said. According to the Amdocs survey, only 29% of those who had contracted a mobile internet plan used the internet provided by their wireless carrier most of the time.

The majority of them remained connected to Wi-Fi networks, 36% of which were in public spaces, 20% at home and 15% at work. Furthermore, the study shows mobile internet is largely used for low data activities while Wi-Fi is the preferred form for data-heavy ones.

“Several operators are working to offer Wi-Fi as carrier-grade but more needs to be done. Complementing mobile internet plans, Wi-Fi and valuable content would help service providers bring customers back and increase loyalty,” according to Wang.

The information presented and opinions expressed herein are those of the author and do not necessarily represent the views of CANTO and/or its members