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GSMA LA Plenary 37: The Latin American mobile industry met in Chile for the GSMA Plenary Meeting

Representatives of the Chilean Government and 250 executives from more than 30 Latin-American operator companies, met at the 37th Plenary Meeting organized by GSMA Latin America at Viña del Mar, Chile, where it was highlighted the boost that meant the telecommunication industry to the regional economy through the investment plans that keep making grow the connections and spreading the benefits of the knowledge society around the continent.

The Transport and Telecommunication Minister of Chile, Pedro Pablo Errázuriz, was the person in charge of opening the meeting, announcing the goals of the government for 2014: Increase the internet penetration from 40% to 70% in homes, to have 100% of the schools and companies connected and go from 13% to 33% of mobile internet penetration. “We need a market open to innovation in order to put Chile on top at the region in terms of telecommunication development, to benefit all the Chilean people”.

The Minister Errázuriz described as crucial the 4G Contest that is currently boosted by the government in order to provide more quality in mobile internet services. In that matter, he assured that in order to modernize telecommunications “It is necessary to remove the barriers and obstacles in favor of a free market competition and achieve a better user experience”.

The Chief Regulatory & Government Affairs Officer of GSMA, Tom Phillips, announced the future opening of an office of the association in Brazil that will complement the presence that the association has in Chile and Argentina. “As Latin America becomes more important globally, GSMA continues to expand its arrival with an increase in regional presence and support to our members” confirmed Sebastian Cabello, GSMA LA Director.

At the Plenary also presented the Undersecretary of Telecommunications of Chile, Jorge Atton, who explained the policies carried out by Subtel in order to fully include Chile in the Knowledge society: “The competence and quality of the service has to be deal in depth, through new tenders of spectrum frequencies, and keep increasing the coverage with public-private alliances”. The undersecretary also emphasized that the Chilean Government “strongly believes in attracting private investment and recognized the big investments of the telecommunication sector in Chile reaching more than 2400 million dollars in 2011.”

The Mobile Telephony Association of Chile (ATELMO) was represented at the Plenary by its President, Guillermo Pickering, who revealed that in Chile the mobile data traffic will grow 13 times by 2016 in a scenario where “telecommunications agencies are the key” to keep improving the users experience. “The Mobile industry has always been competitive and strong in terms of investment. We have faced periods of time where the investment went down in numbers in all the industries except in the telecommunications that is why they were a great contribution to the national economy “, stated the President of ATELMO.

During the Plenary Meeting, the GSMA presented its “Connected Living” program which is aimed at forming the ecosystems in the new development areas of Mobile industry: m-automotive, m-Health, Smart Cities y m-Education. The GSMA will be soon carrying out the “Connected Living Latin America Summit” during June 26th and 28th in Brazil.

The regional meeting closed with the presentation of “Start Up Program Chile” where internet ventures from all over the world are being incubated. The executive vice president of the Production Development Corporation (CORFO) Hernán Chevre Valenzuela, talked about the importance of the scope of the program and three projects were presented: Latinda from Argentina, Woapi from Chile and Yupi Studios from Brazil.

About the GSMA LA Plenary Meeting #37

The 37th plenary meeting of GSMA Latin America was conducted between 23 and 25 April in Vina del Mar, Chile. Sponsored by ATELMO (Chilean Association of mobile phones) composed of the local operatos Claro, Entel, Movistar, Nextel and VTR, consisted of 3 days of activities including Mobile Business and Public Policy seminars and the sessions of the four GSMA La Working Groups: Billing and Roaming (BARG), Regulatory (REGF), Technical and Terminals (TECT) and Security and Fraud (SEGF). The event had more than 450 representatives from 40 mobile operators in the region, 37 companies providers of networks and services, and more than 30 representatives of government among those who stood out Subtel and CORFO (Chile), Cofetel (Mexico ), ACMA (Australia) and PTS (Sweden).

Download presentations from the Plenary:

  • For Working Groups presentations go to Infocentre

Pictures: Photo gallery from the Plenary Meeting.

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GSMA LA Plenary 37: Mobile Broadband as a fundamental factor for Latin-American social and economic development

The seminar “Development of the mobile broad band – Now and in the future” opened the 37th Plenary Meeting of GSMA Latin America, outstanding the importance that means the Access to Mobile Internet to close definitely the digital divide among the region, which exceeds the 630 millions of connections.

The first speaker of the conference, John Giusti, the Head of Spectrum for the GSMA, reasserted the stance that is a central part of the work into the Association, in favor of harmonize the bands used for mobile broadband services, because it helps to reduce the devices costs until a 50% for the consumers and, at the same time, facilitates the networks deployment. “The growth deploying fixed infrastructure is limited, that is why the Mobile Broad Band will be crucial for the universalization of services, becoming the main platform for high-speed internet services for most of the Latin-Americans who are currently disconnected”, he explained.

Later, The Director of GSMA Latin America, Sebastian Cabello, described some of the results of the Latin America Mobile Observatory: “The mobile market in the region generates about 175 billion or 3.6% of the regional GDP. The distribution of the spectrum of Mobile Broad Band, in the short term, will help to improve even more the coverage and connect to the “disconnected”, it will speed up the adoption rates and it will shock significantly the economic growth.”

For his part, Edwin Fernando Rojas, Leader of the ECLAC Secretary for the Regional Dialogue of Mobile Broadband, highlighted the need of decreasing the impact of the international traffic costs regarding the broadband tariffs to promote the creation and adoption of local content and increase the regional traffic exchange.

At the seminar, also presented Sergio Scarabino, Director of the ITU Office for South America, who said it was necessary to make additional assignments of the spectrum for mobile services and identify additional broadband frequencies. Alexis Milo Caraza, Commissioner of the Federal Commission of Telecommunications of Mexico (COFETEL): pointed out the opportunity that means the digital switchover to take advantage of the release of the 700 MHz band.

Representing the Chilean Government, Oliver Flögel, Executive Secretary for Digital Development, explained the different initiatives that they have in mind to contribute to the digital development and inclusion in the short term: Infrastructure Development, devices provision, massification and subsidization for the demand and the development of applications for productivity. “The total penetration of Internet (fixed + mobile) in Chile reaches a 29%, mainly driven by the mobile internet connections which have increased an 886% since June 2009”, he emphasized.


During the first day of the Regional Conference, also presented Dr. Jack Rowley, expert on Health’s matters for GSMA, proving the lack of evidence of the negative effects on the exposure to electromagnetic fields of mobile phone base stations: “taking into account the low levels of exposure and the results of researches until now, there is no scientific evidence that the weak signs of radio frequency and wireless networks cause negative effects on health”. Among other specialists on the effects of the non-ionizing radiations, were Renato Sabatini, biomedical of the Brazilian institute Edume, and Aderbal Bonturi from the Mobile Manufacture Forum, who supported some of the concerns presented by the Director of ATELMO, Guillermo Pickering, regarding the Antennas Law that the Chilean Congress is about to enact.

About the GSMA LA Plenary Meeting #37

The 37th plenary meeting of GSMA Latin America was conducted between 23 and 25 April in Vina del Mar, Chile. Sponsored by ATELMO (Chilean Association of mobile phones) composed of the local operatos Claro, Entel, Movistar, Nextel and VTR, consisted of 3 days of activities including Mobile Business and Public Policy seminars and the sessions of the four GSMA La Working Groups: Billing and Roaming (BARG), Regulatory (REGF), Technical and Terminals (TECT) and Security and Fraud (SEGF). The event had more than 450 representatives from 40 mobile operators in the region, 37 companies providers of networks and services, and more than 30 representatives of government among those who stood out Subtel and CORFO (Chile), Cofetel (Mexico ), ACMA (Australia) and PTS (Sweden).

Pictures: Photo gallery from the Public Policy Seminars

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GSMA LA Plenary 37: Mobile Money and mHealth with new interesting prospects for development in Latin-America

With more than 400 regional executives between operator representatives, regulatory agencies and Government, began the 37th GSMA Latin America Plenary Meeting, with Mobile Business Seminars which highlighted the great opportunity to develop Mobile money and health projects that the industry has in the region.

At the opening of the seminar “Mobile Money opportunities and NFC in Latin-America”, Alexis Arancibia, Innovation and Technology Manager of GSMA LA, reinforced the “excellent occasion that offer the mobile Money initiatives for the Latin-American and the Caribbean region, this because of the lack of financial inclusion but the high mobile penetration”. According to information of GSMA Latin America, every increase of a 1% in banking at rural areas reduces a 0, 34% of poverty while the production increases a 0, 55%.

Later, Carolina Carrasco, Senior Specialist of the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB), presented the perspective of financial inclusion that mean the mobile financial services, since 50% of population in Latin-America do not have a saving account and only 20% use the financial system to save money. The expert from the IDB considered as essential the alternative channels that offer the mobile technology, as they make possible to expand those services to the population at lower costs. “A 1% growth in telecom services generates around 3% growth in the economy”, said Carrasco.

At the seminar there was a panel of companies that are innovating in the mobile Money field as Gemalto, Visa, Ericsson, Kuapay and Citigroup which detailed the key elements to build a successful ecosystem in Latin America. The moderator was Andy McGuire, vice president of GSMA and NFC specialist, the technology that makes possible to exchange information between two devices that are separated just by a few centimeters, giving a great range of new services like mobile payments, ticketing and vouchers, among others.

Mobile technology to boost the medical assistance in Latin-America

The Executive Director of GSMA Mobile Health, Jeanine Vos, was the responsible for opening the Seminar “Perspective of Mobile Health for Latin-America” emphasizing that “the general use of mobile connectivity in medical assistance may reduce costs, increase the scope and the accessibility of the health services and reduce the impact of diseases in people’s lives”.

The last report of GSMA states that the mobile health’s projects will mean a great market opportunity of 1.6 million dollars for Latin-America in 2017. “The mobile technology will be a key enabler so that health assistance services reach every place of the planet. The developing countries are trying to launch services that save lives in communities in need and the mobile technology offers the capacity of providing very effective and affordable health assistance, no matter where a hospital or a clinic are” said the specialist.

About the GSMA LA Plenary Meeting #37

The 37th plenary meeting of GSMA Latin America was conducted between 23 and 25 April in Vina del Mar, Chile. Sponsored by ATELMO (Chilean Association of mobile phones) composed of the local operatos Claro, Entel, Movistar, Nextel and VTR, consisted of 3 days of activities including Mobile Business and Public Policy seminars and the sessions of the four GSMA La Working Groups: Billing and Roaming (BARG), Regulatory (REGF), Technical and Terminals (TECT) and Security and Fraud (SEGF). The event had more than 450 representatives from 40 mobile operators in the region, 37 companies providers of networks and services, and more than 30 representatives of government among those who stood out Subtel and CORFO (Chile), Cofetel (Mexico ), ACMA (Australia) and PTS (Sweden).

Pictures: Photo gallery from the Mobile Business Seminars.

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Roaming in a Multi-Network Environment

By Shlomo Wolfman, COO and Co-Founder, Starhome

In the beginning

Not so long ago, there was a time when we sat glued to our PCs for hours on end, enjoying what we thought was the freedom of high-speed internet. Today, with the advancement of technology, high-speed internet is available wherever you are and wherever you go and can be accessed from pretty much every high-end mobile device. Even though most people still have various sources of online access at home, recent figures suggest that the majority of subscribers are now accessing the internet through their mobile devices.

Social networks are being accessed on the move. Nearly half of Facebook’s 845 million users are accessing the site via their mobile devices. It is, after all, the simplistic ease of bringing all our Facebook friends together on one mobile device that has contributed to this massive phenomenon. Following closely behind are the 55% of Twitter lovers who are accessing the site via smartphones.

Local mobile searches are growing at a rapid rate, with users seeking local information and services, such as location-based daily coupons, as well as local and national maps. A huge number of shoppers are also using their mobile devices to gain instant access in real-time to local data sources to look for availability for specific items in stores or to compare prices. Their mobile devices instantly place them in the fast lane for purchasing goods – without standing in line at the stores.

Mobile growth is also soaring to stratospheric heights – from about 9 billion wireless devices in 2011 to an estimated 24 billion in 2020, while, in 2011, tablet and smartphone deliveries already surpassed PCs sales.

The merging of Social, Local and Mobile (SoLoMo) is shaping a new mobile lifestyle, which instills subscribers with an insatiable need to stay connected. And, together with this exciting world of information at our fingertips, comes our heightened dependence on our mobile devices.

SoLoMo – meets the multi-network environment

The merging of Social, Local and Mobile has had a direct effect on mobile networks and their capacity to cope with higher data rates, wider coverage and improved mobility. Whatever way we look at the industry today, one thing is for certain, the mobile landscape is changing, and a multi-network environment is emerging.

This complex, heterogeneous network comprises multiple network domains, layers and technologies which include 3G, WiFi and islands of LTE within a growing number of networks. One of the main obstacles for operators will be to provide seamless network mobility to subscribers, which will require compatibility with new technologies and devices. Operators will need to reexamine their key strategies and solutions for supporting their subscribers’ mobile usage.

The first line of approach will be for operators to establish themselves in this new environment. Being first to launch into new areas and improve the user experience will not only gain subscriber loyalty, but also it is a sure way to undercut rival operators vying for customers.

Network challenge

It goes without saying that the mobile industry is fiercely competitive, and operators have faced many tough challenges. While most successfully rode out the impact of the global financial slowdown, they are still facing a head-on battle to protect their business. To boost network performance and customer ARPU and enrich the customer experience, operators know they must innovate to survive in this new environment.

Additionally, mobility has become an essential part of daily life for most subscribers, who are now demanding internet everywhere. With the rising use of smart devices, mobile applications and content, LTE, M2M and demands for extra bandwidth, operators find themselves with yet another level of complexity to add to the stack of mounting challenges. To successfully manage these new requirements, operators will have to invest in new solutions as existing solutions available today will not be able to support this new mobile way of life.

Off the hook with bill shock

SoLoMo has created a new kind of environment where all subscribers and all devices are always connected. With set pricing packages for fast data usage in a domestic environment and complete transparency for spending, subscribers feel confident of mobile phone usage – without incurring extra fees. And, in an industry where technology reigns, subscribers expect the same experience abroad.

However, once a subscriber travels abroad, they are not given the same transparency for spending and often find themselves in the dark of how much data they are actually consuming. Switching off their mobile device is one way to protect against bill shock, but this translates into a substantial revenue loss for operators.

Until now, network technology did not support similar domestic and roaming packages. However, new technology and accompanying solutions have made it possible for subscribers roaming abroad to enjoy comparable packages to those at home.

It all seems complicated, but fortunately, the transition into a new multi-network environment does not have to be difficult. Solutions designed to tackle today’s major issues, maximize the subscribers’ experience and boost operator’s earning potential are already emerging.

Meeting the challenge

To keep up with market momentum and realize new market opportunities, operators require innovative solutions that will simultaneously and dynamically adapt and react to new market demands. And, to maintain a competitive edge, it is essential for operators to prepare themselves for the challenges and opportunities of a multi-network environment.

New technology can now bring domestic and roaming usage in line. Operators can encourage fearless data roaming by empowering their subscribers to control and manage their data consumption and expenses in real time by providing better, customized, tariff packages that meet their individual needs. With complete transparency of spending, roamers will feel confident using their devices when they need them most. An increase in data usage means an increase in operator revenue.

Furthermore, in an LTE network, mobile operator roaming agreements will be expanded to include policy-based arrangements. This means that operators will be able to steer subscribers to preferred partners to ensure that individual roamers are provided with the best possible services suited to their roaming needs and packages.

A key success factor in a multi-network environment is to ensure seamless network mobility. Roamers will be unaware of network handover – until their services are lost. This can be easily prevented with solutions that support roaming in a multi-network environment. Quality of User Experience solutions that employ an innovative approach to performance monitoring will ensure roamers receive the best possible service at all times.

The mobile industry has undergone significant changes over the years. Smart devices have created a massive increase in demand for speed and support higher data rates, wider coverage and improved mobility. Multi-network environments will revolutionize the use of roaming services in general, and data, in particular. It’s all good news.

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LTE needs excellent IPX Connectivity – and Sybase 365 is delivering

For some time now Sybase 365 has been quite successful in offering its IPX 365 Services. Over 80 Mobile Operators around the world are using our platform for interconnection of IP-native services like mobile data roaming over GRX, international MMS, and BlackBerry® Connectivity. But despite the industry’s global effort to make IPX the single IP-based platform for all interconnect services, Mobile Operators are still hesitant to start using IPX for the traditional services of Voice and roaming signaling.

There seem to be two reasons for this. First of all, making the strategic change from traditional circuit-switched technology to IP-based technology for these services isn’t all that obvious. After all, these services are usually running quite well on the legacy platforms so despite the promise of increased efficiencies, the attitude seems to be: if it ain’t broken, don’t try to fix it.

But more fundamentally, Mobile Operators have not been particularly impressed so far with the one key benefit offered by the IPX: that of full transparency of end-to-end costs and operational performance. This is rather ironic, considering that the IPX and in particular its transparency was originally conceived by the GSMA, an association whose membership list is dominated by Mobile Operators.

Now all of this is about to change. Under the banner of Long Term Evolution or LTE, Mobile Operators have started to deploy next generation mobile networks. Contrary to 2G and 3G mobile networks which are built around a mix of technologies, LTE uses primarily IP technology, both in the core network and on the radio network. An IPX market survey sponsored by Sybase 365 and published in August 2011 by Telecom Asia showed that Mobile Operators see IPX as being essential for the deployment of LTE-based services. In essence there are three reasons for this.

1. The need to Handle increasing volumes of data roaming traffic

Traditional mobile data roaming involves backhauling all data traffic from the Visited Network to the Home Network via a GRX. One of the ways in which LTE roaming differs from traditional mobile technologies is that it supports local break-out of traffic: whereas in 2G and 3G mobile networks, data roaming requires data connectivity to the Home Network through a GRX, in LTE roamers can be allowed to connect to the Internet locally through the Visited Network.

But though technically possible, most Mobile Operators prefer to stick to the 2G/3G model and use a GRX service. And since LTE offers more bandwidth as well as many new services, more will be required of a GRX service than just basic transport. LTE operators will be looking for a GRX service that can offer end-to-end SLAs, and that is able to deal with substantial growth of traffic.

Only a GRX service provided over an IPX network will be able to meet these requirements.

2. Enabling secure LTE roaming: Diameter

Mobile roaming involves the exchange of information between the Visited Network and the Home Network: subscription and authentication data for authenticating/authorizing user access to the Visited Network, and policy and charging control information in order to support the local breakout function. The exchange of this type of information is typically done using an AAA protocol (Authentication, Authorization and Accounting).

The AAA protocol of choice for LTE roaming is Diameter, an evolution of the well known Radius protocol. Diameter is an IP-native protocol, so naturally the LTE standardization bodies 3GPP and GSMA identified IPX as the network of choice to provide Diameter connectivity between Mobile Operator networks.

3. Interworking of new services

With the launch of LTE networks the market will see a new generation of mobile devices supporting all-IP services, typically built on IMS (IP Multimedia Subsystem). The two services currently in the spotlight are good old Voice and the GSMA’s Rich Communication Suite (RCS), an effort to bring services like Instant Messaging and Presence to the handset under a mobile industry standard.

Since these new services are IP-native, interconnection between Mobile Operators will be IP based. For national IP interconnects, bilaterals are often preferred. But internationally the preferred platform for IP interconnection will be IPX. And not just for Voice and RCS, but for all IMS-based communication services.

 

Sybase 365 IPX already supports all of these basic requirements. The IPX MPLS core has both the quality and the capacity to comfortably deal with the increasing demands put upon it. But our ambition goes beyond providing just basic connectivity. Based on our experience with service hubs – specifically the messaging hubs for SMS and MMS – and our experience with growing Mobile Operator communities – GRX and, more recently, IPX Voice – we are launching two new IPX product sets which go hand-in-hand with the global roll-out of LTE networks: one around Diameter and one around IMS Interworking.

This Diameter product set is based on a Diameter proxy in the Sybase IPX network. As with any hub-based service, the Diameter proxy offers Mobile Operators the benefit of establishing Diameter connectivity to all of their roaming partners through a single IPX connection. Additional services include interworking between the 2G/3G world and the LTE world, and traffic management services like load balancing.

The IMS Interworking services are built around an IMS hub the IPX network. Contrary to the Diameter proxy which operates at the network level and is dedicated to just Diameter, this IMS hub operates at the application layer. It enables not just interworking for Voice over LTE and RCS but for any future IMS-based service.

Being able to set up multiple roaming and interworking destinations through a singly IPX connection is in itself of great operational value. Of greater importance is the commercial value of IPX: the potential of an IPX connection to shorten time-to-market and thus the ability to help Mobile Operators grow revenue more quickly. But eventually, only an IPX built on an excellent MPLS core network and offering the full set of essential Mobile Operators services, and IPX like that of Sybase, will able to deliver that potential.

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The Republic of Colombia Wins GSMA Government Leadership Award

Mobile World Congress 2012, Barcelona: The GSMA today presented the Honourable Minister of Communications for the Republic of Colombia, Diego Molano, with the mobile industry’s prestigious annual Government Leadership Award. The award recognises the significant achievements made by the Colombian government in developing the country into one of the major hubs for Latin America, known for its growing economy, competitive business.

As the fourth-largest country in South America and one of the continent’s most populous nations with more than 46 million people, the Republic of Colombia has witnessed a revolution of its business landscape thanks to mobile communications and now enjoys a dynamic market with penetration rates unimaginable a decade ago. In 2011, internet connections doubled to six million, with mobile making up almost half of these.

“The Colombian Government has made universal access to broadband internet a priority through our strategy, Vive Digital. We want to offer Colombians more opportunities through mobile telephony, including increased education, comprehensive health care services and more job opportunities,” said Minister Molano. “Vive Digital’s goal is to quadruple the country’s internet connections in four years; the rapid expansion of the Internet and mobile telephony is essential to our economic growth.”

“The Republic of Colombia has put mobile right at the heart of its social and economic agenda with a fresh and innovative communications strategy,” said Tom Phillips, Chief Regulatory Officer, GSMA. “On top of this, Colombia is a leader in management of what is now one of the world’s scarcest assets – spectrum. In recognition of its commitment to mobile communications and the exemplary vision of its government, the GSMA is proud to present the 2012 award for government leadership to the government of the Republic of Colombia.”

The Republic of Colombia was the first country in Latin America to licence the 2.6 GHz spectrum band and one of the region’s to first  allocate spectrum in the 700 MHz band for Mobile Broadband globally by creating a spectrum roadmap and is planning to double the amount of assigned spectrum in the next three years. The government is working alongside international committees to ensure the region’s future use of spectrum is harmonised. The government also recognised that the growth of mobile data traffic has made it necessary to allow greater access and encourage competition.

The judging panel for this year’s Government Leadership Award was:

  • Professor Martin Cave, Visiting Professor, Imperial College Business School, and Deputy Chair of the Competition Commission
  • Jon Fredrik Baksaas, President and CEO, Telenor Group
  • Ambassador David A. Gross, Partner, Wiley Rein
  • Anne Bouverot, Director General, GSMA

The award was presented at the Government Mobile Forum, an annual event in which more than 450 government and regulatory representatives from around the world meet with industry to discuss specific regulatory issues relating to the development of mobile communications. The forum is a key event in the GSMA’s Ministerial Programme which takes place every year in Barcelona during the GSMA Mobile World Congress. In 2012, the Ministerial Programme has attracted more than 140 delegations from around the globe.

-ENDS-

About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo.

For more information, please visit the GSMA corporate website at www.gsma.com or Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com.

Media Contacts:

Abigail Faylor: +44 (0)2070 670 851
afaylor@webershandwick.com
GSMA Press Office:
press@gsm.org

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Wireless Intelligence: Fast-growing Brazilian operators look ahead to LTE auctions

Brazil reaches a quarter of a billion connections by year-end 2011, growing 20 percent year-on-year

Brazil reached almost 250 million mobile connections by year-end 2011, according to Wireless intelligence data, accounting for over a third of total connections in the Americas region. It is now a larger market than Mexico, Argentina and Colombia combined.

Brazilian connections grew almost 20 percent year-on-year with all the market’s major operators recording double-digit growth. 3G connections accounted for 17 percent of the Brazilian total at year-end, slightly ahead of the 15 percent regional average. Mobile penetration stands at 125 percent.

The market is led by Telefonica’s Vivo which had 72 million connections at the end of the year, giving it a 29 percent share, followed by Telecom Italia’s TIM Brasil (64 million/26 percent), America Movil’s Claro (60 million/25 percent) and Oi, the mobile arm of Brazil’s fixed-line incumbent Telemar Norte Leste (45 million/18 percent). Although there are a number of smaller and regional operators in the market, these ‘big four’ account for 98 percent of the country’s mobile subscriber base.

At Telefonica Group, the organic revenue contribution from its Latin American division increased by 5 percentage points between Q3 2010 and Q3 2011, offsetting the declining contributions from its Spanish (-2.1pp) and European (-0.2pp) units. According to the operator, this was due in part to the “high rates of growth driven by a favourable economic context and acceleration in the adoption of new services” in Brazil.

Telefonica’s Vivo added almost 3 million mobile net additions in Q3, up 72 percent year-on-year and 50 percent on the previous quarter. The operator has been pursuing the higher-value market segments and claims a 37 percent share of Brazil’s contract-based mobile subscribers, and 43 percent in mobile broadband. This focus saw ARPU at Vivo rise 3 percent year-on-year to US$13.21 in Q3.

The Brazilian regulator has been able to support growth in the market via several spectrum auctions in recent years. The most recent swathe – largely spectrum left over from previous tenders – was sold off in December 2011 and netted the government BRL237.8 million (US$132 million). TIM Brasil secured nine blocks of spectrum in the 1800MHz band for BRL109.3 million, with Oi acquiring four blocks in the same band for BRL110.6 million. Sercomtel spent BRL3 million on a single block of 1800MHz spectrum while Claro secured a block in the 800MHz band for BRL14.5 million.

Meanwhile, the government is gearing up to auction-off 4G-suitable spectrum later this year. Auctions for spectrum at 2.5GHz (suitable for LTE) and 450MHz are due to begin in April, while 3.5GHz fixed-wireless spectrum auctions are due to follow. Much sought-after 700MHz spectrum could also be sold before year-end.

In recent years, the main operators have all moved to merge their mobile and fixed-line businesses to provide integrated fixed/mobile service offerings. Telefonica bought out its former partner in Vivo, Portugal Telecom, in 2010 partly in order to more closely integrate the unit with its local fixed arm, Telesp. Meanwhile, America Movil brought Claro and its fixed-line arm, Embratel, under one roof last year and recently added cable firm Net Servicos de Comunicacao to its Brazilian portfolio. Telecom Italia acquired the long-distance fibre player, Intelig, in 2009.

However, the fixed businesses of the foreign-owned operators continue to trail that of Oi, which remains Brazil’s largest fixed-line provider by some distance. Oi has concentrated in recent years on integrating its 2008 acquisition of rival fixed-line firm Brasil Telecom, with all its services – both mobile and fixed – now under the Oi brand.

Joss Gillet, Senior Analyst, Wireless Intelligence:

Mobile growth in Brazil has rapidly spread throughout the country’s geographically challenging territory. The north of the country – including Rio de Janeiro – reached 113 percent penetration in Q4 2011, compared to 131 percent in the mid-west and south and 142 percent in the state of Sao Paulo. Overall, the north region, as segmented by the regulator, comprised 120 million connections by year-end, half of the country’s total connections and twice that of the two other sub-regions. However, as is the case in other BRIC countries, multiple SIM ownership is inflating penetration rates and diluting real growth. With penetration rates on course to reach increasingly distorted levels (173 percent in 2016), Anatel could look to replicate methods used by the TRAI in India, which collects active user figures and recently showed that real penetration in the country was closer to 58 percent in 2011 rather than the 82 percent reported by operators. Compared to other BRIC countries, Brazil is closer to Russia, which has reached 213 percent penetration on average in Moscow and St Petersburg, and 146 percent in the rest of the country. In both markets, mobile operators have clearly moved from a customer acquisition phase focused on 2G network expansion (as is still the case in India) to a customer retention phase focused on technology migration. Operators in Brazil are investing in 3G network deployments throughout the country, with Vivo’s 3G coverage reaching 2,516 municipalities in 2011 (of which 1,310 were added last year) giving it 82 percent 3G population coverage. Meanwhile, TIM claims 67 percent 3G coverage of the urban population with 3G services present in 488 cities. Similarly, Claro claimed to have increased its 3G footprint in Q4 2011 (without providing specific figures) while upgrading its network to HSPA+, which has been instrumental in its 9.1 percent year-on-year growth in data ARPU. Overall, such investments in data networks will help the BRIC countries overtake the US in terms of total mobile revenue in 2012, by which time we expect them to account for over 40 percent of total revenue in the developing world.

 

Connections
(million)

% 2G

% 3G

Market Share

Growth,
annual

Vivo

71.55

78%

22%

29%

19%

TIM

64.08

85%

15%

26%

26%

Claro

60.38

74%

26%

25%

17%

Oi

45.48

96%

4%

18%

16%

Nextel (NII)

4.15

100%

-

2%

25%

Algar Telecom

0.65

72%

28%

0.3%

6%

Sercomtel

0.08

83%

17%

0.03%

-2%

 

246.38

83%

17%

-

19%

Brazil mobile connections, Q4 2011
Source: Wireless Intelligence

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Broadband tariffs in Latin America and the Caribbean: Benchmarking and trends

Hernan Galperin, University of San Andrés (Argentina).

Supply characteristics are a key indicator of the broadband Internet access market performance. The price, quality, existing contracting options and other characteristics of the supply are also an important determiner of service adoption levels in homes and businesses1. This paper analyzes the characteristics of broadband services offered in Latin America and the Caribbean. The analysis is based on a survey conducted in 24 countries of the region, to the leading operators of mobile and fixed broadband in each market, and was then compared to OECD countries. Data refers to Q2 2011, and comparisons are made against the same survey in Q2 2010.2

Despite the increasing segmentation of the supply and access speed improvement, poor quality and high prices of fixed broadband are still common in Latin America and the Caribbean.

The increasing segmentation of fixed broadband supply in the region is a positive sign of the gradual market development and the operators’ interest to expand the universe of clients served. This is reflected in the increased supply of entry-level plans, which offer a basic service (between 256kbps and 512kbps of download speed with data download volume limits) at relatively affordable prices. In several countries these plans are part of government initiatives to expand broadband access, either through state operators (as in the cases of Venezuela, Costa Rica and Uruguay) or agreements with the private sector (as in the case of Brazil). On the other extreme, we find a growing range of plans with very high access speeds (> 30Mbps download speed) aimed towards the residential and SMEs market in countries with more mature markets such as Argentina, Brazil and Chile, as well as the Caribbean (particularly Jamaica and Trinidad & Tobago).

Nevertheless, as shown in Figure 1, the quality of the offered fixed broadband varies significantly in the region. Less than half (11 out of 24) of the countries surveyed offer speeds above 10Mbps, and no one offers FTTH. The setback is particularly significant in many countries where the average broadband offer does not exceed 2Mbps. It is also worth mentioning that, on average, supply quality (measured by offered download speeds) is four times higher in OECD countries. Still, the trend is positive and the average supply quality increased by 65% in the region compared to 2010, which, as shown below, entails a significant cut in service costs per Mbps.

Figure 1. Quality average of offered fixed broadband (in kbps download speed), Q2 2011

The tariffs of fixed broadband services in the region should be evaluated in relation to the restrictions on the quality of the service. On average, tariffs for fixed broadband in the region are three times higher than those found in OECD countries, although, as shown in Figure 2, there are significant variations between different markets. On the other hand, the introduction of low-cost access plans has reduced the price gap with OECD countries in the entry-level supply segment. In this segment, the average tariffs in the region exceed those of OECD by 80%, which represents a significant improvement compared to the 2010 survey (on average, there is a 16% year-on-year reduction in the cost of entry-level plans in the region). Furthermore, countries like Venezuela, Uruguay and Brazil stand out given that they offer basic access plans with tariffs that are similar or below the level of most developed countries. 3

The introduction of low-cost access plans has reduced the price gap with the OECD in the entry-level supply segment.

Another trend that has reduced market entry barriers is the increasing availability of bundled services. They are offered in over half of the countries surveyed (15 out of 24) and provide broadband, phone (generally unlimited local calls) and cable TV services. In less than half the countries (11 out of 24) triple play bundles are available, although in some cases, these bundles include TV services provided by agreements with satellite TV operators. Service bundles can expand the market by reducing additional costs for users who already pay for other services. Nevertheless, as noted by the OECD (2011), it is necessary to monitor these practices as to ensure an ideal combination of stand-alone services and bundle offers.4

Figure 2. Fixed broadband plans (least expensive plan and average plans offered) in US$ PPP, Q2 2011

Comparisons based only on tariffs do not take into account quality restrictions of broadband services in the region. To introduce them, the unit of comparison must be the cost of the access service per Mbps download speed, an indicator that considers both price and quality of the service promised. The results are shown in Figure 3. Given that the tariffs are non-linear; this indicator favors the more mature markets where there are higher speed offers (and therefore lower cost per Mbps). Hence we find that the average cost of Mbps download speed for a household in the region is 20 times that of a home in OECD countries. But again, there is significant price dispersion among countries in the region: analyzing the extreme values, the average Mbps cost for a household in Chile is 25 times cheaper than for a household in Bolivia (in US$ PPP). It should also be noted that in countries with very high speed offers (> 100Mbps) such as Brazil and Trinidad & Tobago the Mbps cost is similar to OECD reference values.

The results show a significant dispersion in fixed broadband prices among countries in the region: analyzing the extreme values, the average Mbps cost for a household in Santiago de Chile is 25 times cheaper than for a household in La Paz, Bolivia.

Moreover, the trend shows a remarkable improvement regarding 2010 given that, although nominal tariffs did not present much change, the supply quality improvement has resulted in a 36% reduction in the average cost of Mbps in the region. The improvement is even greater in the case of entry-level plans with a 44% year-to-year decrease in the Mbps average cost in this segment. Even though this trend is positive, broadband price/quality ratio improvement must be accelerated in order to reduce the gap that separates Latin America and the Caribbean from most developed countries.

Figure 3. Fixed broadband plans (least expensive plan and average plans offered) in US$ PPP Mbps, Q2 2011

The causes of the persistent price gap between Latin America, the Caribbean and the OECD, as well as important price dispersions between countries within the region, are manifold and require an extensive discussion which exceeds the scope of this paper. However, some aspects that arise from this analysis are worth mentioning. First, a lack of intermodal competition can be seen (i.e. between different fixed broadband access platforms) in almost one third (7 out of 24) of the countries surveyed. This deficit in investment for alternative access infrastructures must be offset by rules that enable competition among service operators on the same platform (in general the one controlled by the incumbent operator of fixed telephony). However, high prices found in some of the less developed markets show the limited range of these rules in the region.
In these cases, the only alternative to discipline fixed broadband access prices is mobile broadband supply. This requires defining up to what extent are fixed and mobile broadband complementary or substitute products; to be addressed in the next section. It should be noted that in most countries, the operators who offer both services are the same, which reduces the incentives for direct competition between the two platforms.

Price dispersion among countries in mobile broadband services is significantly lower than that observed in fixed broadband plans, indicating higher levels of competition in the mobile segment.

Mobile broadband development is seen as an opportunity to address the competition shortage in fixed broadband services and also expand existing market boundaries. According to ITU estimates (2011) the number of mobile broadband connections doubles that of worldwide fixed connections. This requires analyzing up to what extent are these services substitutes or complementary, and in turn, the comparison of supply characteristics of both services. This comparison has some limitations. Firstly, the promised quality of both services is not strictly comparable. Usually, mobile broadband services are marketed under a single speed promise (in general between 1 and 3 Mbps), which, in many cases, is reduced once exceeded a threshold level of data download. At the same time, the supply of mobile broadband plans has greater segmentation in terms of contract options (prepaid or postpaid), length of service (can be purchased from one hour to a monthly contract), data download and other demand segmentation variables.

This paper is limited to examining mobile broadband services as a substitute for fixed broadband. In other words, the analysis is limited to examining the extent to which mobile broadband puts pressure on supply prices for residential fixed broadband. Therefore the analysis only compares mobile and fixed broadband plans which -in terms of type of contract and service quality- are close substitutes. The comparison focuses on (monthly) subscription tariffs of mobile broadband services of at least 1GB of data download volume (regardless of the access device), vis-a-vis the tariffs of fixed broadband services with similar quality (between 1 and 3 Mbps download speed).5

Figure 4 presents the results of this analysis.6 Price dispersion in mobile broadband services is significantly lower than that observed in fixed broadband plans: the gap between countries with the highest and lowest average cost (Bolivia and Uruguay respectively) is reduced 14 times in the case of fixed services and 5 times in the case of mobile broadband, while the standard deviation is three times less in the case of mobile broadband. The greatest tariff equality reflects greater competition levels in the mobile segment, where -with the exception of Costa Rica- there are two or more operators competing in each market.

Figure 4. Fixed broadband vs. mobile broadband monthly cost (average plans of up to 3Mbps and 1GB download) in US$ PPP, Q2 2011

The results reveal that, on average, mobile broadband services are 25% cheaper than equivalent fixed broadband services. However it is worth noting that the difference is largely explained by the worst performing fixed access markets; while in some of the more mature markets such as Uruguay and Chile the tariff difference between the two platforms is significantly reduced. Taking only the cheapest plans from each market into consideration, the difference in favor of mobile services is extended to 32%. Again, in countries with less developed fixed services -like in most Central American markets- the differences are greater than in more mature markets.

The results reveal that, on average, mobile broadband services are 25% cheaper than equivalent fixed broadband services. Taking only the cheapest plans from each market into consideration, the difference in favor of mobile services is extended to 32%.

In short, there is no doubt that mobile broadband development favors access market expansion by providing an offer of higher segmentation level in terms of type of contract, length of service and download limits, as well as competitive prices regarding equivalent fixed access services. The results show that mobile broadband supply is complementary to fixed broadband in terms of services focused on mobility and prepaid access, and also a substitute due to the pressure it puts on prices in the entry-level segment plans.
Lastly, it is important to point out the increasing segmentation by type of service (chat, mail, social networks and navigation) in the marketing of mobile broadband services. Although these commercial innovations allow the operator to segment the demand and improve traffic management -which in turn reduces deployment and network operation costs-, they also introduce potential competition problems in the value-added services market, and must be monitored to ensure the markets competitive functioning.

1 Of course, even in these countries the relative cost is still higher due to lower income levels in the region. In this regard see Galperin and Ruzzier (2010).

2 OECD (2011).Broadband bundling: Trends and Implications. OECD Digital Economy Papers No. 175. OECD Publishing.

3 See Galperin and Ruzzier (2010).The broadband tariffs: benchmarking and analysis. In Jordan, V., Galperin, H., & Peres, W. (Eds.). Accelerating the digital revolution: Broadband for Latin America and the Caribbean. Santiago de Chile: ECLAC.

4 The survey was conducted according to OECD guidelines (see www.oecd.org/sti/ict/broadband).

5 Although data download restrictions make some of the mobile broadband services not strictly identical to those of fixed broadband, the ITU criterion was used to establish a 1 GB minimum level of monthly use for the compared plans. See ITU (2011), Measuring the information society. Geneva: ITU.

6 It is noteworthy that Belize and Suriname were excluded from this analysis due to lack of information on mobile broadband offers in these countries.

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Aicent IPX’s Vision


Mobile and Fixed Network operators are evolving towards IP infrastructures with the advent of 4G, IMS and NGNs. The interconnect medium between these networks and the applications provisioned on top of the network infrastructure are all converged on IP protocols.
Aicent IPX architecture consists of a global, private, IP transport network which provides end-to-end quality of service and application level service gateways to provide service awareness towards variant services in and amongst mobile operators, fixed network carriers, and enterprise entities.
Aicent integrates a congestion free private IP infrastructure supporting end-to-end quality of service and service aware proxy gateways bringing these advantages:

  • Aicent’s MPLS network ensures carrier class quality and global coverage.

A private, global, and resilient Multi Protocol Label Switching (MPLS) based network to provide the GRX/3GRX access service with proven, reliable service performance and dedicated customer care and support to Tier 1 MNOs.

  • Multiple state-of-art service aware gateways integrate multiple services on single network transport.

Beyond GRX/3GRX services, Aicent has developed several Value Added Services for mobile operators, leveraging Aicent’s network coverage and addressing customers’ most urgent needs, for example messaging and RIM BlackBerry Connectivity.

  • Value added services derived from the application of service awareness within the network transport

Aicent’s RIS (Roaming Intelligence Suite) provides visibility into Aicent managed devices and allows the operator “see” the data roaming sessions from Aicent’s point of view. This capability is vital to troubleshooting data roaming problems between two roaming partners.

Aicent IPX Services & Functions

On top of the secure and end-to-end QoS enabled IPX network infrastructure, Aicent deploys a wide range of service functions and features supporting all IP based service communications between two mobile operators and their corresponding enterprise customers. These IPX supporting functions are the essential building blocks for making the IPX services successful. 
By converging their voice and data services into IP packets and exchanging over the IPX network, mobile operators will be able to enable rapid service deployment, reliable service support, and control of each service aspect while maintaining visibility at the individual subscriber level. 


Aicent IPX service framework

Figure 1  Aicent IPX Service Framework Building Blocks

  • Highly secured, resilient and dedicated private IP network with end-to-end QoS transport
  • Directory service including global MNP solution and ENUM support
  • Data clearing service and support for multiple services
  • RADIUS and DIAMETER proxy gateways for user signaling and control
  • SIP proxy gateways for service application signaling and control
  • Media gateways for voice and video payload data session management
  • Messaging gateways for SMS and MMS interworking
  • Service route election and automated tools for implementation
  • Security management on network and service access
  • Roaming intelligence from GTP session analysis
  • Integration of GTP session and DIAMETER session monitoring and control
  • Integration of network level and application service level monitoring and support

Aicent IPX Network Infrastructure
Aicent IP Service Network (AISN), Aicent’s private IPX network infrastructure consists of a network access layer and a core backbone network. The network architecture is illustrated in
Figure 2.


2 Aicent Global IPX Network Infrastructure

  • The network access layer is used to connect mobile operator’s networks to AISN.  The access layer consists of Aicent POP’s in Asia Pacific, the Americas, and Europe.  
  • The core backbone network is Aicent’s MPLS enabled private IP network that provides high speed, reliable and robust networking to the POP’s in the access layer. 
  • The IPX Peering is used for Aicent to exchange traffic with other IPX providers, and Aicent has established presence for IPX peering at Amsterdam, Singapore and Ashburn/USA.
  • Aicent’s 24X7 operations center proactively monitors core network and each network access for our customers and ensures the highest service availability and network performance.
  • Aicent’s sophisticated reporting system allows our customers examine our service delivery against the SLA commitment and help our customers for future planning. 

Europe and Near/Middle East

  • Austria
  • Belgium
  • Czech Republic
  • Denmark
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Israel
  • Italy
  • Luxembourg
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Russia
  • Slovakia
  • Spain
  • Sweden
  • Switzerland
  • Turkey
  • UK

Asia Pacific region

  • Australia
  • China
  • Hong Kong
  • India
  • Indonesia
  • Japan
  • Macau
  • Malaysia
  • Philippines
  • Singapore
  • South Korea
  • Taiwan
  • Thailand

The Americas Region

  • USA
  • Canada
  • Mexico
  • Argentina
  • Brazil
  • Columbia
  • Chile
  • Panama
  • Peru
  • Puerto Rico
  • Venezuela

Through strategic partnerships with some of world’s largest global backbone carriers, Aicent is able to offer MPLS based network and coverage in over 200 countries across five continents.

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Wireless Intelligence: 3G comes of age in the Americas

3G connections reached 100M by year end; local operators to add 4M 3G subs per month in 2012

Rapid adoption of 3G services is driving mobile connections and revenue growth in the Americas region, according to the latest Wireless Intelligence data.

The number of 3G connections in the region is estimated to have hit 100 million at the end of 2011, accounting for about 15 percent of the total and more than doubling from a year earlier. The Americas was the second-fastest growing global region in terms of 3G connections in 2011 (rising 45 percent year-on-year), just behind the Middle East and Africa (52 percent).

Brazil was the region’s largest 3G market with 41 million 3G connections at year-end, followed by Mexico (18.4 million) and Argentina (7.8 million). Brazilian market-leader Vivo is the largest 3G operator in the region with 16 million 3G connections in Q4 2011.

According to Wireless Intelligence, mobile operators in the Americas added close to 3 million 3G connections every month on average last year, and this run rate is expected to increase to 4 million 3G additions per month in 2012. As migration to 3G accelerates, growth in 2G GSM connections will slow and could begin retracting by the end of this year. 2G accounted for 85 percent of the region’s connections in 2011 but is forecast to drop to 52 percent of the total by 2016.

Total mobile connections in the Americas are forecast to hit 800 million by 2016. The region passed 100 percent mobile penetration in 2011, and is forecast to reach close to 130 percent penetration by 2016.

The migration towards WCDMA-based 3G has coincided with the region’s move away from CDMA networks. According to Wireless Intelligence, CDMA connections in the Americas declined by 17.5 million between Q4 2009 and Q4 2011 and now account for just 2 percent of total regional connections, compared to 6 percent two years ago. Migration away from these networks is complete or close to completion in many cases. Telefonica closed its CDMA network in Ecuador in December, while its Brazilian arm, Vivo is scheduled to do so in June this year.

3G growth in the region is also having a positive impact on operator revenues. According to Wireless Intelligence, mobile ARPU in the Americas grew by US$0.27 in Q3 2011, bucking a global decline of US$0.02. At Telefonica, the organic revenue contribution from its Latin American division increased by 5 percentage points between Q3 2010 and Q3 2011, offsetting the lower contributions from its Spanish (-2.1pp) and European (-0.2pp) units.

According to new figures from the GSMA, the mobile market in Latin America currently generates an estimated US$175 billion, or 3.6 percent of total GDP, with mobile operators alone contributing US$82 billion in 2010 (1.7 per cent of the total output of the region).

In Q4 2011 the first commercial LTE networks were launched in the region by UNE (EPM) in Colombia, AT&T Mobility in Puerto Rico and Ancel (Antel) in Uruguay. In addition, local operators in 12 regional markets rolled out HSPA+ networks during the second half of 2011.

Joss Gillet, Senior Analyst, Wireless Intelligence:

Strong connections growth and the rapid adoption of mobile broadband services in the Americas are driving mobile revenue growth in the region, and are responsible for rising ARPUs that buck the global trend. Telefonica, for example, reported in Q3 2011 that growth in mobile broadband led to a 31.7 percent rise in Latin American non-SMS data revenue (compared to a 19.6 percent group average), a segment that accounted for 25 percent of total service revenue in the region in the period, up 4 percentage points from a year earlier. This trend can be observed across the Americas and further data revenue growth will be fuelled by the wave of HSPA+ and LTE deployments that are underway. However, to support future growth, operators and regulators will need pan-regional spectrum harmonisation – without which economies of scale and global roaming could be hindered. Brazil, Argentina and Chile are setting the tone for LTE frequency band allocation in the region. According to our latest study, the vast majority of LTE connections in the Americas will be supported in the 2600 MHz band, yet the allocation of additional spectrum in the digital dividend band and the re-farming of existing bands remain high priorities.

Americas: mobile connections/technology split, 2011–2016

Source: Wireless Intelligence

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