|Latin America III 2001
|Importance of Roaming to the Growth of Convergent Systems in Latin America
|Dr. Richard Downes
|Director for Latin America and the Caribbean
|Universal Wireless Communications Consortium
International roaming both benefits from and promotes technology convergence-leading to a massive common calling area in the Americas equalling or exceeding any European or Asian example. Widespread international roaming in the Americas will soon be common: 33 million visitors from the Americas should visit the United States this year; 37 million United States residents travelled within the Americas in 2000. Greater economic efficiency will result and contribute to even greater levels of economic interaction across borders and geographic barriers.
Rising Expectations My arrival at Buenos Aires’s Ezeiza International airport was initially uneventful, marked only by a jolt of cool July air filtering into the jetway-a welcomed relief from the heat of Rio de Janeiro. But as I shuffled toward the immigration booth, the evening became truly memorable. I bravely pulled out my wireless phone, pressed the power-on button, and waited for a response. The magic word ‘Roam’ appeared on the screen, raising hopes that my wireless service provider in the United States had actually reached an agreement with an Argentine operator to make automatic international roaming (the use of another operator’s network to provide service; automatic roaming allows the customer to dial as if on his or her own network; manual roaming requires the use of a pin or credit card number to complete the call) a reality. Manoeuvring among the baggage carousels, I dialled my voice-mail in the United States as a test. And it worked! It worked! Mobile communications for US visitors to Argentina would never be the same, and I joined the legions of world travellers who expect their mobile phones to work everywhere, on demand, even throughout the Americas. This expectation is becoming increasingly realistic, as technology convergence is overcoming the challenges posed by multiple wireless technologies in the Americas and facilitating access to the impressive financial opportunities available through international roaming. Moreover, the relationship is synergistic: international roaming both benefits from and promotes technology convergence-leading to a massive common calling area in the Americas equalling or even exceeding any European or Asian example. Achieving easier and more immediate mobile communications will not be accomplished overnight-challenges still exist-but the pathway toward more widespread international roaming in the Americas is becoming as clear and bright as the full moon that illuminated our arrival on the Pampas that memorable evening. The Drivers Major increases in wireless penetration, travel within the Americas, and minutes of use are providing solid structural foundations for the growth of international roaming throughout the region. A study prepared for the World Bank by Pyramid Research (www.infodev.org) estimates that Latin America’s wireless customers now total over 50 million. Wireless penetration exceeds 20 per cent in Chile and Venezuela, is approaching 20 per cent in Argentina, and stands at about 15 per cent in Brazil and Mexico. Latin America’s wireless penetration is expected to reach at least 30 per cent by 2010, representing more than 150 million wireless users in the region. Further to the north, wireless usage in the United States continues to surge, currently registering 115 million subscribers, a 40 per cent penetration rate, and is expected to reach over 225 million by 2010. These trends will create an Americas wireless communications region in 2010 of over 375 million users. Simultaneously, travel among the nations of the Americas is growing to titanic proportions. No less than 33 million visitors from the Americas are projected to visit the United States this year, and annual growth rates are expected to approach 5 per cent. Over 37 million United States residents travelled to destinations in the Americas in 2000. International travellers to Brazil from all destinations more than tripled between 1980 and 1999, when it exceeded five million visitors, with nearly 70 per cent originating in the Americas. The growth in visitors to Brazil from other South American countries has been especially strong, approaching 3 million by 1999. Mexico annually records over 20 million tourists, with over 10 million originating in the Americas. (mexico-travel.com) Even tiny Costa Rica receives a million visitors per year, over 77 per cent of whom originate in the Americas. Wireless subscribers are also increasing the time they use to communicate via their wireless phones while travelling. According to a recent study by the Strategis Consulting Group prepared for the Universal Wireless Communications Consortium, international business travellers originating in the United States will increase their daily use of mobile terminals from 18 minutes per day in 2000 to over 39 minutes per day by 2003, and even US-originating international leisure travellers will increase the use of their phones from 9 to over 19 minutes per day. Travellers originating in Chile, Colombia, Mexico and Venezuela will also increase their daily use time. Travellers from Argentina and Brazil will decrease use of their phones slightly, but still rely on them for critical communications. On the balance, these trends present wireless operators with significant and attractive revenue opportunities that are growing annually and should increase even more with the onset of advanced wireless services. According to the previously mentioned Strategis Group study, which treated only revenues available from the over 70 million subscribers using TDMA technology, the average potential revenue per contract-subscriber traveller will grow from US$90 in 2000 to US$156 in 2003. Potential revenue from within Latin America will remain steady at a respectable US$76 per traveller. While the study focused only on major markets, it did reveal substantial revenue potential. For the US-Mexico market, the TDMA community’s roaming revenues could grow to US$152 million by 2003 from outbound US travellers and an additional US$97 million from Mexican travellers to the United States. The US-Brazilian market has the potential to generate over US$5 million in roaming revenues by the same year from US travellers, and US$1.8 million from Brazilian travellers to the United States. The US-Argentina market would generate over US$2.4 million from US travellers, and over US$3.7 million from Argentines visiting the United States. Similar scales of revenues should also become available to operators from other nations as their customers grow in numbers and travel more frequently. The Technology Accelerators Technology associations have been working feverishly to provide the technical specifications to make automatic international roaming feasible. The Universal Wireless Communications Consortium (UWCC) recently published for its members all the technical and operational specifications needed to implement international TDMA roaming. These specifications are providing the basis for an increasingly pervasive TDMA roaming capability throughout the Americas. Meanwhile, the GSM Association has successfully implemented GSM roaming in Chile, Venezuela, and Peru, and is completing implementation in Argentina, Bolivia, the Dominican Republic, El Salvador and Paraguay. Simultaneously, operators from two of the world’s dominant mobile technologies-TDMA and GSM-have been working closely together to advance interoperability, leading to ‘interstandard roaming.’ A joint interoperability team (known as the GSM-ANSI-136 Interoperability Team, or GAIT, for short) representing both technologies developed the specifications for an interoperable TDMA-GSM terminal and supporting infrastructure. The GAIT terminal will operate on either TDMA or GSM networks, providing service for TDMA customers visiting GSM-dominated geographic areas, such as Europe, and vice versa. Those customers served by operators that have selected a GSM overlay for their TDMA network (see below) will also benefit. They could access data services provided by a GSM/General Packet Radio Service (GPRS) network, while also utilising the more comprehensive digital voice coverage offered by nearly ubiquitous TDMA networks. One terminal manufacturer (Siemens) has already announced the availability later this year of a tri-band, dual-mode terminal capable of supporting TDMA 850 and 1900 and GSM/GPRS 900 and 1900. Siemens estimates the market demand for such a terminal to exceed 50 million units over the next four years. By far the most significant recent development advancing international roaming and convergence is the decision of several major TDMA operators to implement a GSM overlay on their TDMA networks. AT&T Wireless, TelCel RadioMovil of Mexico, and Telecom Personal of Argentina will all create a GSM overlay to their current TDMA networks. Beyond providing the means for delivery of higher mobile data rates and a smooth evolution to third-generation services, this move will provide for even higher levels of interoperability throughout the region and with other regions where GSM is the dominant technology. Several other TDMA operators in Latin America have privately indicated an interest in a similar technology evolution. When the appropriate handsets become available, this means that an AT&T Wireless customer with GSM service will be able to utilise roaming wherever GSM is available. These two routes for technology convergence between TDMA and GSM, the GAIT terminal and the GSM overlays, will soon start to erase differing technical standards as one of the major barriers to seamless international roaming. A truly seamless wireless experience in the Americas is moving ever closer to reality. Challenges Ahead Unfortunately, there are still major issues to be resolved before the full potential of seamless international roaming can truly be realised. The CDMA community, with over 15 million subscribers in Latin America but a much-reduced geographic footprint than TDMA, still depends upon the existence of analogue channels on TDMA systems to complete roaming in many areas. As analogue becomes increasingly difficult to support because of spectrum shortages, CDMA operators will have to devise alternative solutions. These include the possibility of a dual-mode CDMA-GSM terminal or broadening the use of the removable identity card recently announced to allow CDMA-GSM interoperability in the Chinese market. International roaming for pre-paid users is also a significant challenge, given that pre-paid service is the preference of the majority of new accessions for most operators in Latin America. At least one proprietary solution has been developed and tested but has yet to be widely implemented. Other challenges to the advancement of international roaming involve the complexities of devising and ratifying appropriate roaming agreements and clearing house arrangements. Inherent in these transactions is the necessity for the operator to invest in appropriate authentication equipment and processes to prevent fraud resulting from unauthorised use of a visited network. Finally, the need to co-ordinate frequencies in the Americas has not disappeared. The selection of common mobile frequencies within the Americas promotes the availability of low-cost terminals that support international roaming across the widest possible geographic area. As the region moves towards third-generation services, only a co-ordinated selection of new spectrum for such services will allow the cost-effective development of terminals compatible for inter-national roaming in advanced multi-media services. Conclusion It is difficult to exaggerate the impulse current trends are providing for the creation of a truly seamless mobile experience in the Americas. Over the next ten years, technology convergence, higher mobile penetration and an increased propensity to employ the inherent efficiencies of mobile communications will transform how travellers in the Americas communicate with each other. Greater economic efficiency will result and probably contribute to even greater levels of economic interaction across borders and geographic barriers. No longer will international business people be tied to the hotel voice-mail or their computer’s electronic mail. No longer will international leisure travellers be inaccessible to family members in an emergency, nor will they be denied future access to advanced features informing them about driving directions, maps and hotel accommodations via their wireless phones. The era of seamless international roaming in the Americas is on the horizon.