|Issue:||Latin America II 1997|
|Topic:||PCS Enters Latin America: The Future is Now|
|Title:||Director, Sales N. Latin America|
|Organisation:||Phillips Consumer Communications|
The demand for hassle free communication in Latin America has led to some of the most aggressive marketing and technology plans to be found in the region. With Personal Communications Services, the region can introduce new technology today, to take advantage of installing semi- to completely developed technologies without the trial and error phases of progress.
The impact of cellular communication on the Latin American public is measured not only by higher usage rates but also by some of the innovative accomplishments of the service providers in the region. When one considers that some 450 million people live south of the United States border and that in this region there is an unsatisfied demand for hassle free communication then it is easy to understand why the most aggressive marketing and technology plans are found in Latin America. Cellular Today The structure of 800MHz cellular today will be the starting point of 1900MHz tomorrow. The challenges of network deployment, customer training and tariff structures are no longer new. The first network deployments required much effort on the part of the network engineers who had to contend with government regulations and unruly landscapes before the network could place a call. The mountains of Jamaica are beautiful and the views of Mexico City and Sao Paulo are incredible but they present some of the most challenging places in the world to install radio communications. The reality is that the geography has created some problems and some solutions, and Personal Communications Services (PCS) operators will be able to benefit from this experience. Training the customer was all part of the challenge 5 years ago and the same stories are echoed everywhere in the region. As a result of these past experiences the new operators will not need to train the public on the lack of a dial tone and the usage of “SEND” and “END” buttons. Tariff structures in most of the countries are now established and the PCS operator has the option of following or adapting his own structure. The interesting aspect of what to charge for wireless services is that it varies from one country to another regardless of the economic condition of that country. PCS will have the advantage of launching tariffs that make sense to the local market. The United States Effect Cellular today is dominated by the presence of technologies from the north. Advanced Mobile Phone Service (AMPS), Narrowband Advanced Mobile Phone Service NAMPS) and Dualband Advanced Mobile Phone Service (DAMPS) are technologies which are to be found mainly on our side of the world. The reasons are clear; roaming is advantageous, terminals can be found and network suppliers are ready with their product. The latter is most important because Latin America has had the advantage of installing semi to completely developed technologies without the trial and error phases of progress. The Colombian and Panamanian launch of DAMPS are good examples of this type of deployment. One of the best examples of launching an already developed technology can be found in Argentina where deployment of a new AMPS network on a national basis was completed in record time. As such, PCS will also have this advantage. The United States 1900MHz operators are learning as they install and there are new lessons to be learnt in cell site location and marketing strategies. The services are being advertised to the mass market and the technologies are allowing a variety of sets with different features. Perhaps one of the most exciting technological developments for the Americas is the arrival of 1900MHz Global System for Mobile Communication (GSM), which will enable a complete wireless menu and allow PCS operators to choose technology that will eventually allow their customers to roam in the world markets. Digital Communication So what technology will be deployed? GSM is the most advanced and universally deployed. Being Time Division Multiple Access (TDMA) based, it is a cousin to the DAMPS which is also found today in the Americas. The following features are available: Caller Identification, Message Waiting Indicator, Short Messaging Services, Digital Data, Extended Stand By Times and landline quality audio. DAMPS IS-136 has some of these features but its most attractive quality is its duality. The specification allows for AMPS/DAMPS in the handset so the PCS customer can roam on an 800MHz network, which is an incredible marketing tool. There is also the newest technology, Code Division Multiple Access (CDMA), which has finally arrived and can provide the following facilities: Caller Identification, Message Waiting Indicator and Extended Stand By Times. The main advantage is its increased capacity which will probably be its most attractive feature. All of the technologies provide increased voice security and anti-fraud characteristics that allow for better marketing and competitive advantages. Change the Wireless Market The future is wireless. For some countries this means that within the next 10-15 years penetration rates will increase and eventually cannibalise the landline customers. But in our region this can happen much sooner. Since technologies arriving here are already tested and developed, the ability to offer value added services and landline quality audio have become a reality. What kind of PCS operator will exist in the region? Dual license and single license. Dual License Dual license operators are those which hold 800MHz and 1900MHz licenses at the same time and these licenses can be complimentary or overlapping. If they are complimentary then the operator can offer a larger coverage area and set up his tariff structure to take advantage of this. If they are overlapping then the situation becomes more interesting. There are a variety of marketing opportunities but one of the most interesting is migrating customers to the 1900MHz thereby opening capacity on the older 800MHz network. This would allow for more flexible and less expensive rate plans on the older network. The 800 MHz network could then be used to provide “basic” phone services or competition for landline customers at the same prices without new network investments. Single License Single License operators are those which hold the 1900MHz license and the impact of this operator is profound in the region. With the increase in competition the rates could fall dramatically. New licenses are not free and digital infrastructure is not cheap. The business plan for a new network requires the rapid acquisition of a subscriber base and the only way to achieve this is by mass marketing. No longer is the professional user the target customer. The new operator has to be aggressive or subscriber acquisition will not be enough. Existing 800MHz operators would need to evaluate tariffs to avoid churn to the new network. The 800MHz systems would need to be improved and invested in to compete with new digital value added services. Future Distribution The future is mass distribution. Regardless of the PCS or 800MHz plans, the distribution of terminals has to become fluid and organised. Future wireless customers will walk into a store and purchase their PCS as easily as a television, radio or camera. Future marketing programmes will be tailored to the no contract, no subsidy customer. Operators will concentrate on providing services and terminal manufacturers will have to distribute these products without the financial intervention of the operators. Terminal manufacturers and service providers will have clearly defined mutual goals based on the coverage areas, portfolio of services, and quality of equipment. Conclusion The future is those companies who act now and blaze the trail. The successful terminal manufacturers will reach the retail market and offer easy communication to the subscriber. The future is now.