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

3

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

13

16

22

27

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

9

20

4 - Connections

44

41

34

36

31

MotorolaNextNet WirelessPT Wireless

Promotional Features

6-710-11

26

MotorolaIntec Telecom SystemsNextNet WirelessNewport NetworksOrga SystemsITU TelecomAsia ITFuturecomVoIP World Asia 05eSecure Malaysia 05PTC14th Convergence IndiaISTARHispamar

AdvertisementsIFC-1

258

15 & 1718232429323942

IBCOBC

All articles are available online at: www.connect-world.com

46

48 - Subscription

38

p q p g

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: info@connect-world.com 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. Morrisfredric.morris@connect-world.com;Publisher:David Nunesdavid.nunes@connect-world.com;Managing Director:Valetta Brownadmin@connect-world.com;Printers: Ricargraf Grafica e Editora Ltda

ISSN 1362-0525

T

4

p q p g

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?

Promotional Feature

Motorola - Motorola - Motorola - Motorola - Motorola - Motorola - Motorola

"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

p q p g

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.

Promotional Feature

Motorola - Motorola - Motorola - Motorola - Motorola - Motorola - Motorola

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.

p q p g

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.

9

p q p g

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

Promotional Feature

mayeri@nextnetwireless.com

9555 James Avenue South, Suite 270, Minneapolis, MN 55431 • 952-929-4008 • www.nextnetwireless.com

© 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.

NextNet Wireless • NextNet Wireless • NextNet Wireless • NextNet Wireless • NextNet Wireless • NextNet Wireless

Promotional Feature

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

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. 

12

Figure 1: The number of public Internet booths has grown not only in Lima but also in many ruralareas.

p q p g

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.

13

p q p g

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. 

14

p q p g

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

p q p g

MAKE THE RIGHT CONNECTIONS

ITU TELECOM WORLD 2006 provides a unique global ICT networking platform

where great minds, companies and new technologies connect. Join the

leaders of business, government, regulators, innovators and visionaries to

explore, negotiate and decide the future of the ICT industry. Organized by the

International Telecommunication Union (ITU). Visit www.itu.int /world2006

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’.

19

p q p g

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-

20

p q p g

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.’

21

Figure 1: People wish to access communication services 24 hours a day, at home, at workor in their cars.

p q p g

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

22

p q p g

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.

25

p q p g

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.

For more information about visiting the show, please:- visit our website www.2456.com/cnc- send an email to publicity@adsale.com.hk

A giant telecom event in Beijing!

PT/Wireless & Networks Comm China 2005The leading telecom industry show in China

18 - 22 October, 2005, China International Exhibition Centre (CIEC), Beijing, PR China

Promotional Feature

PT/Wireless & Networks Comm China 2005 - PT/Wireless & Networks Comm China 2005

The show now has more than 400 exhibitors. Confirmed exhibitors include such well-known companies as Microsoft.

p q p g

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.

27

p q p g

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.’

28

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.

p q p g

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!

Hot

Be visible as a prestigious

sponsor, and connect your

business directly to a group

of targeted customers today!

Contact Cynthia Wang

on +65 6322 2756

or email at

cynthia.wang@terrapinn.com.

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

Name: ..........................................................................................................................................................................

Job Title: ......................................................................................................................................................................

Company: ........................................................................ Main Line of Business: ......................................................

Address: ......................................................................................................................................................................

Postal code: ...................................................................... Country: ............................................................................

Tel: .................................................................................... Fax: ...................................................................................

Email: ................................................................................ Website: ...........................................................................

New for 2005!

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.’

30

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.

www.connect-world.com

VISIT the onlineversion ofThe decisionmakers’ forum forICT drivendevelopment.

REVIEWpast issues,upcoming eventsand our contributingauthors fromaround the globe.

SIGN UPto receiveConnect-Worlde-Letter,a fortnightlyselection of:

the most importantICT events all overthe world;

the latest articlesfrom some of theworld’s top-leveldecision makers;

what is comingin the nextConnect-Worldissues.

www.connect-world.com

p q p g

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.

31

p q p g

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.’

33

p q p g

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

34

p q p g

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.

35

p q p g

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

36

p q p g

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.

37

p q p g

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

38

p q p g

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. 

40

p q p g

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.

41

p q p g

Supporting Journal

Pragati Maidan, New Delhi, India

21-23 March 2006Pragati Maidan, New Delhi, India

21-23 March 2006

nvergenceIndia 2006nvergenceIndia 2006

14th14th

International Exhibition & ConferenceInternational Exhibition & Conference

Ushering the Infocomm Revolution...Ushering the Infocomm Revolution...

South Asia’s largest communications eventSouth Asia’s communications eventlargest

Exhibitions India Pvt. Ltd. (An ISO 9001:2000 Certified Company)

A-17 (2nd Floor) DDA SCO Complex, Near Moolchand Flyover, Defence Colony, New Delhi 110 024, IndiaTel: + 91 11 2463 8680, 5155 2001 Fax: + 91 11 2462 3320, 2463 3506 exhibitionsindia@vsnl.com www.exhibitionsindia.comCtc: Rajesh Kapur, Executive Director (M) 98111 51456 / Bunny Sidhu, Vice President (M) 98733 43925 / Debasish P. Choudhury, Group Manager (M) 98117 101901

Tel: + 91 22 2857 5235 / 1672 exhibitionsindia@vsnl.net Tel: + 91 80 2532 7322 / 7324 exhibitionsindiablr@vsnl.net Mumbai: Bangalore:

Co-organisers

Supported byCo-sponsor

Government of IndiaMinistry of Communications & IT

Department of Information Technology

Government of IndiaMinistry of Communications & ITDepartment of Telecommunications

Certified by

Telecom IndiaTelecom India

InfoSecurityIndia

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.

43

p q p g

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

44

p q p g

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.

45

p q p g

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

46

p q p g

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. 

47

p q p g

Yes, I would like to subscribe for... (Please tick the appropriate boxes. Subscription is free of charge for all ITU members)

Connect-World Africa and the Middle East US$60 US$100Connect-World Asia-Pacific US$60 US$100Connect-World Europe US$60 US$100Connect-World EMEA US$60 US$100Connect-World ICT Global Challenge Issue US$60 US$100Connect-World India US$60 US$100Connect-World Latin America US$60 US$100Connect-World North America                         US$60 US$100

Personal DetailsName: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Organisation: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Position: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Address: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .State/Country: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Postcode/Zip: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Telephone: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fax: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Email: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payment (Billing address)

As aboveOther address: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .I am an ITU member. My membership number is: . . . . . . . . . . . . . . . . . . . . . . . .

SIGNATURE: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Please fax back to: +44 20 7474 0090

Global House 12 Albert Road London E16 2DW United KingdomTel.: +44 20 7540 0876 Fax: +44 20 7474 0090 email: admin@connect-world.com URL: www.connect-world.com

One Year                                Two Years

The Information Communications Technology revolution is upon us andConnect-World is here to help you to stay ahead of the competition.

Connect-World is the most authoritative publication on the market, packed withissues, views and regular contributions from leading authorities in the ICT sectorand leading experts in their field.

Repl

y Ca

rdSubscribe to Connect-World

Repl

y Ca

rdSubscribe to Connect-World 

Repl

y Ca

rdSubscribe to Connect-World 

Repl

y Ca

rdSubscribe to Connect-World 

Repl

y Ca

rdSubscribe to Connect-World 

p q p g

•The best coverage of the entire American continent

•The only satellite for the Americas with on-board processing:DVB-RCS Platform for multimedia applications

•Exclusive 24-hour Support in Portuguese, English and Spanish

•Privileged Orbital Position

•Greatest capacity for the Americas

•State-of-the-Art Satellite

•Broadband via satellite

CONTACT USPhone: 55 21 2555-4800

55 21 2555-4833 Fax: 55 21 2555-4849E-mail: brasil_sales@hispamar.com.br

international_sales@hispamar.com.br

NEWSFLASH: we are launching a radio and TV project to integrate the AmericasTel.: 55 21 2555-4813 E-mail: international_sales@hispamar.com.br

Phone: 34 91 708-0853 Fax: 34 91 372-9000E-mail: comunicacion@hispasat.es

Phone: 1 410 315-6968

COME JOINUS ANDBECOMEONE OF OURSATISFIEDCUSTOMERS

COME AND BE PART OF THE GREATEST SUCCESS IN SATELLITE COMMUNICATION IN THE AMERICASwww.hispamar.com.br

With great dedication, the Hispamar team

has achieved an unprecedented feat: a record

occupancy rate for a new orbital position.

Look who is with us:

- Fixed and mobile telephony operators

- Occasional service providers

- Free and Pay TV Channels

- DTH

- Long Distance Learning Community

- Corporate and governmental networks

The Hispamar Team at the Management Center located in Rio de Janeiro, Brazil