Home Latin America I 1998 The Local Loop’s New Paradigm Shift

The Local Loop’s New Paradigm Shift

by david.nunes
Gil SimoesIssue:Latin America I 1998
Article no.:5
Topic:The Local Loop’s New Paradigm Shift
Author:Gil Simoes
Title:Senior Advisor
Organisation:Nortel CALA, USA
PDF size:44KB

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Article abstract

The virtual monopoly held by telephone and cable companies on wideband and broadband local access in Latin America is about to change dramatically due to deregulation. Recent technological developments in radio technologies, along with decreasing product prices, have meant that radio in Latin America is being assessed as a viable alternative for broadband access.

Full Article

Over the past few years Latin America has seen political stability, economic growth and international pressures open up its market. In the telecommunications industry, this has fostered deregulation and liberalisation of local access, leading to increased competition, lower tariffs and higher quality of services. The Need for More Speed In the business arena, the continuous globalisation of industries creates the need to communicate with overseas branch offices, suppliers and customers. A growing number of information intensive industries, such as medical and financial, rely on data for a competitive advantage. An ever-growing number of remote locations demands the use of Local Area Networks (LAN) and Wide Area Networks (WAN) to facilitate timely communications; and the popularisation of the Internet and intranet for both external and internal communications has spurred the demand for high bandwidth connectivity and services. Many medium and large companies throughout Latin America have relied on a combination of privately-managed leased lines, microwave links and VSAT link-ups, leading to a high cost of services at sometimes marginal quality. The cost pressure in high capacity telecommunication services is bearing down on businesses and companies, which are eager to control costs and optimise their telecommunications operations. As competition increases, companies are more likely to turn to their carriers for better service that will complement, and in many cases replace, private networks. In the residential market, the competitive environment and the end-user demand for high-speed access are driving operators to look at extending services beyond basic voice to multimedia applications with the emphasis on high-speed data transfer, such as the Internet and digital video. Which Technology? Various technologies can offer high-speed data access. Sophisticated multimedia services, however, require bandwidths of 1.5 Mbps or more. The traditional wireline network can support data services such as ISDN, switched 56 Kbps and DSL technology. However, the new DSL technology, such as the asymmetrical digital subscriber line (ADSL) or the high bit-rate digital subscriber line (HDSL), has certain bandwidth limitations, complexity in provisioning, and high cost of deployment and operation. Fibre does solve many of these shortcomings but the limited deployment in Latin America, the prohibitive costs to an off-net customer and the long-term customer commitment requirements do not make it a viable mass access mechanism for the region. Broadband Wireless – The Ubiquitous Solution Aware of the limitations of wireline technologies, Nortel, along with other equipment vendors, has developed a sophisticated generation of broadband wireless technologies which enable carriers to offer a multitude of services over a high-speed and high-capacity wireless pipe, comparable to fibre technology. Nortel’s Reunion product line of broadband wireless products supports a range of operating frequencies from 2 to 40 GHz, and has integrated some of the most recent technological developments such as robust modulation, wide-band radios, advanced error correction algorithms, dynamic power controls and faster microprocessors. Broadband wireless employs a two-way microwave technology that can deliver high capacity voice, data, and video signals between local hub sites and end users, for both commercial and residential applications. The large amounts of bandwidth generally allocated at the operating frequencies (usually from 200 to over 1000 MHz), combined with advanced communications protocols, ensure sufficient spectrum utilisation for full two-way multimedia networks. The new architecture offers several advantages over traditional wireline broadband systems: · low and targeted initial capital investments; · low maintenance and operating costs; · ease and speed of deployment, enabling operators to activate a new service within hours, leading to faster paybacks; · competitive new services which can be bundled, and · potentially integrated billing which would allow the operator to offer the end user one bill and one service agreement for all their telecommunication needs, including voice, high-speed data communications, leased line, long distance, Internet access and digital video. This gives the broadband wireless operators an edge over other technologies since it allows them to provide bundled services at very competitive prices. The non-cellular nature of the architecture and the low capital requirements will change the operators’ business models and attract untraditional broadband operators such as existing cellular carriers. Initially, the future operator concentrates on capturing a few customers and building its broadband wireless network around them and then lets its customer base expand naturally at very competitive costs. The use of broadband wireless for the last mile also has its limitations. The need for a line of sight between transceivers must be addressed at earlier planning stages. Usually hubs are placed at between 2 and 5 km apart depending on topography and the local environment. Overlapping cells, integrated network management and sound network planning that addresses environmental variables, coverage and service offerings are critical in delivering very high quality and reliable broadband services. Around the World Several broadband wireless networks, such as the 23 GHz example in Kobe, Japan, have concentrated on the provision of services for digital video. It is in being able to provide bundled services, however, in the local loop including voice and high-speed data, while maintaining a flexible migration to digital video, that sets broadband wireless apart. Although several frequencies in the radio spectrum can support some of these services, it is the 28 GHz range or LMDS that has recently gained most attention. In the US, with a total of 1300 MHz of spectrum per trading area (two licenses, one for 1150 MHz and one for 150 MHz), LMDS has more spectrum than any other single commercial wireless service. Currently US licenses have also been awarded in both the 24 GHz and 38 GHz ranges. Two companies, WinStar Communications and Teligent, are implementing multipoint network architecture based on broadband wireless access from Nortel’s Reunion product family and ATM transport and switching. Future of ‘The Last Mile’ With few exceptions, the selection of the appropriate spectrum and the allocation of high-frequency broadband wireless licenses in Latin America is still in the planning stages. With the constant developments in radio equipment and the increasing demand of advanced services, frequencies higher than 20 GHz, with large blocks of spectrum available, represent the more cost-effective solutions leading to more economical end-user service offerings. As the liberalisation in the Latin American telecommunications sector gathers steam in many of the region’s markets, green-field opportunities are being created for a host of new players who will look for innovative solutions for the last mile. Conclusion Given that the future choice will be driven by the increasing need for more advanced services, higher bandwidth and speed to market, broadband wireless will be a winning choice.

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