|Issue:||Latin America 2007|
|Topic:||Next-generation home services|
|Title:||VP, The Americas|
Andrew Morton is the Vice President for the Americas of Comtrend Corporation; he is responsible for the companyís North and South American operations. Prior to Comtrend, Mr Morton held management positions at 3Com focused on access and broadband. Prior to 3Com, Mr Morton held various senior sales positions at Lexmark/IBM.
Residential broadband is growing rapidly in Latin America, driven by growing fixed mobile convergence and triple-play offerings. Broadband in Latin America has grown 46 per cent since 2006, far outstripping Asia-Pacific (27 per cent), EMEA (35 per cent) and North America (26 per cent). DSL accounts for 72 per cent of all Latin American broadband connections – higher than the 66 per cent seen globally. Cable, fibre-to-the-home and other forms of broadband Internet are growing, but at a slower rate than in other industrialised regions.
Perhaps more than any other region on the planet, Latin America has a front-row seat at the ongoing communications revolution. Consolidation has enabled large telecom players from Mexico and Europe to take leading positions among service providers in the hemisphere. Broadband continues to attract subscribers at an extremely healthy rate and the promise of new services such as IPTV and fixed mobile convergence continue to drive telecom growth on multiple levels in virtually all Latin American countries. According to a leading industry research firm, the number of broadband subscribers in Latin America surged from 9.7 million in 2006 to just over 14 million in 2007 – a year-over-year increase of 46 per cent. That pace far outstripped Asia-Pacific (27 per cent), EMEA (35 per cent) or North America (26 per cent), testifying to the huge and unyielding demand for high-speed digital services. Although growth slowed slightly in the first quarter of 2007, there is no doubt about where broadband connectivity is headed in the region. What is perhaps less clear is how quickly, and to what extent, non-DSL based broadband technologies will ultimately penetrate. DSL accounts for 72 per cent of all Latin American broadband connections – higher than the 66 per cent seen globally. Cable, fibre-to-the-home and other forms of broadband Internet services are growing at a slower rate in Central and South America compared to other industrialised regions, although cable has experienced an uptick of late. In several countries, government legislation is moving forward, albeit bumpily, allowing telcos and cable companies to offer the triple-play combination of voice, data and television. In some cases, most notably Brazil and Argentina, the impetus has come largely from the private sector. The Mexican government published its long-awaited convergence agreement in October 2006. However, challenges to the regulatory process have been filed by pay TV providers, possibly compromising a speedy conclusion. Still, triple play, along with a host of next-generation services for home and business, should find a willing and eager audience among many of Latin Americaís 570 million people. In many ways, Latin America is at the forefront of the global economic renaissance. With employers throughout the region enjoying unprecedented health, and with quality of life rising quickly for millions, demand for emerging entertainment and communications technologies should increase steadily. Seamless cell / landline There is no shortage of seamless fixed mobile convergence, FMC, projects on the horizon. FMC essentially gives the consumer the ability to use his or her mobile phone handset as both a cellular and a WiFi-enabled, IP-capable calling device. Brasil Telecom, Brazilís third-largest telco, was one of the first service providers in the world to debut at FMC service last year. The service, called Telefone ?nico, directed at both small businesses and individuals, promises up to 80 per cent savings on local calls. Currently available throughout all of Brasil Telecomís service areas, Telefone ?nico enables a user to automatically and wirelessly switch his or her service to a landline phone equipped with a small access point device, when within a range of around 100 metres. Essentially the access point becomes a hot spot that saves on precious cell phone minutes. Although the Telefone ?nico service does not make use of broadband, other FMC protocols are quickly coming to market that will support broadband IP calling using dual purpose WiFi/cellular handsets. The Fixed-Mobile Convergence Alliance has already certified nearly 100 handsets; eventually cameras, portable game systems, PDAs and other devices will all be able to connect via broadband WiFi as well. Broad appeal IPTV is perhaps the most promising catalyst for Latin American broadband growth. More than one specific technology, IPTV is in reality a framework for packaging and marketing an entire range of next-generation television services that will fundamentally change the way people select, manage, interact with, and, ultimately, enjoy their home-based entertainment. IPTV offers exciting new options in content organization, interactivity and distribution. Depending on the mix of technologies brought together by the provider, users will have the ability to easily navigate through advanced onscreen features such as personal video recording, PVR, programming by genre, personal playlists, scheduled playback and more. Programmes can be made highly interactive; sports viewers, for example, can choose camera angles, replays and cutaways during live sporting events. Fans of TV series can choose the episode – or even determine the ending – of their favourite programme. IPTV also supports new pipelines for content. Video on Demand, VoD, limited-edition video games, even classes for students ranging from pre-schoolers to post-graduates, are all possible. IPTV offers service providers the opportunity to attract more customers to broadband with advanced services. Whatís more, enabling technology is currently available. The infrastructure investments service providers need to make to offer these services are already proven through use in other regions of the world, and high-end content providers, software companies and device manufacturers are already on board. In Europe, Asia and the United States, there are current models of IPTV to use as examples of a successful service. This means that service providers can focus more on offering consumers varied types of content and choices, and less on mitigating technical issues. Preparation Successfully launching IPTV locally, however, will require considerable analysis and preparation. Service differentiation and pricing are critical factors; a well-trained customer service infrastructure is essential to speed deployment and minimise problems with customer satisfaction. It is imperative that, as telecoms ready themselves for a new era in broadband services, they do their homework on IPTV. Technologists and infrastructure owners often make the mistake of jumping into a service simply because itís new or technically feasible. They need to carefully study similar services deployed in markets outside their region. Timing is also critical; first-movers are not necessarily the winners in the technology arena. There is a lot of available technology today that can enable a successful service. IPTV, to be successful, requires a strong and dependable broadband connection. If data rates are not high enough – and if quality of service, QoS, protocols are not coordinated from the central office all the way to the residential gateway – transmission quality will suffer. Nothing will kill a nascent digital service faster than poor quality. Quality QoS is among the most critical issues for carriers considering a rollout of next-generation services. Latin American homeowners are connecting their TVs and home computers via a wide variety of equipment, standards, and home networking technologies. Furthermore, virtually every in-home distribution scheme – whether based in coaxial cable, wireless or the electrical wiring grid – has multiple standards bodies, all jockeying to be the delivery method of choice. In Latin America, at the present time at least, it seems that in-home electric wiring will be the most common distribution strategy. Many European carriers have thrown their weight behind the Universal Powerline Association, UPA, standard. Headquartered in Europe, the UPA is dedicated to establishing an open powerline protocol that, unlike some standards, is vendor-agnostic. In March 2005, the UPA approved its Digital Home Standard, DHS, supporting the creation of hybrid coaxial/powerline network equipment. By transmitting signals over both coax and electrical wires within the home, the DHS strategy ensures that the best signal, typically over coax, will prevail in order to maximise transmission quality. Other leading global distribution schemes include MoCA, Multimedia over Coaxial, and HomePNA for cable; 802.11n for wireless; and HomePlug as a competitor to UPA. WiMAX, while not strictly an in-home standard, should soon have a major impact on millions of Latin American homes because it delivers WiFi-class broadband rates over distances more closely associated with cellular. Specifically, WiMAX delivers up to 40 Mbps per channel within typical broadcast radiuses of three to ten kilometres. Neovia, a San Paulo wireless service provider, is the first to deploy WiMAX in Brazil, with a number of other Brazilian carriers expected to follow this year. Columbia and Mexico are just two of the other Latin American countries where WiMAX will soon be offered. With WiMAX, along with terrestrial broadband, FMC, IPTV and other new services available to broad numbers of new subscribers each year, Latin America is perhaps the prime ICT incubator in the world today. With so many technologies from which to choose, itís essential for companies to maintain a customer-centric focus. QoS, good content packaging, user-friendly pricing and correct market timing will ensure that the promise of profits and market share will become a reality for Latin American carriers and their business partners.