Published: Monday 14 November, 2005

China, India and Russia are most commonly held up as the great battlegrounds for wireless technologies in the second half of this decade. But in broadband wireless in particular, we should not underestimate the significance of Latin America, which is in the forefront of WiMAX deployment and will have a strong impact on its future success. While the WiMAX community - meeting last week in Chinese capital Beijing for the second interoperability testing plugfest for initial standards-based equipment mainly talks up potential in Asia, Intels own figures indicate that a quarter of first wave roll-outs are in Latin America.

Our own in-depth survey of WiMAX and pre-WiMAX services shows that 12% of broadband wireless operators that are rolling out 802.16 this year or have firm plans to do so within two years are currently in Latin America, and this figure will increase to an estimated 18-20% by 2008 as more WISPs turn to WiMAX more if some key countries like Brazil decide to make their 3G spectrum technology neutral, or to sideline 3G in favour of next generation networks.

While start-ups and competitive telcos like Ertach in Argentina are in the vanguard of WiMAX, and incumbents like Telmex in Mexico and Argentina or Telefonica are also looking to deploy the technology, the most significant move so far has come from Brazil, where Samsung has won the first contract outside Korea for its Wi-Bro technology, which will form the basis of the upcoming 802.16e mobile WiMAX standard. This is a victory for Samsungs claim that Wi-Bro is a general purpose pre-WiMAX technology with international relevance, rather than a variant specific to the needs of Korea, especially as the Brazilian project is in 3.5GHz spectrum, not the 2.3GHz and 2.5GHz for which Wi-Bro was created. For Samsung and its compatriot LG, WiMAX is a strong opportunity to start to penetrate telco markets in the west at the equipment end rather than just with handsets.


The Brazilian Market:

The Brazilian deal has come from cable television company TVA Sistema de Televisao, which aims to build a national broadband wireless network, with commercial trials due in mid-2006, by which time the first Wi-Bro systems will be live in Korea. TVA is taking something of a gamble, planning a mobile broadband deployment before the Brazilian regulator Anatel has agreed to allow mobility in the 3.5GHz spectrum, although that approval is widely expected before the end of 2006. In the mean time, TVA will use Wi-Bro for a fixed and portable service, to fill gaps in its cable coverage and add mobile services to its bundles. Anatel is currently examining the modification of its 3.5GHz rules to support multimedia and mobility, and will start tenders for 3.5GHz and 10.5GHz licenses soon.

Brazil is interesting as one of the most likely countries where operators could look to leapfrog 3G by moving directly to a post-3G technology such as WiMAX. The countrys regulator, Anatel, has not yet auctioned 3G licenses, although it plans to do so next year, keeping prices low to encourage competition. However, interest from carriers has been lukewarm, whereas there is a growing list of triallists of WiMAX, including the major fixed line operators Telefónica, Telemar and Brasil Telecom.

By contrast, the cellular carriers - TIM Brasil, Vivo, Claro and Oi said earlier this year that they wanted to recover their investments in second generation systems before investing in 3G.

Vivo president Fernando Padinha said the operator is already providing advanced wireless services such as video for mobile phones, and the main benefit of the 3G auctions is the additional network capacity the spectrum will bring.

Growth in Brazilian cellular communications is rapid, with the total number of subscribers up 42% between 2003 and 2004, reaching almost 70m in 2005, the fourth largest base in the world.

The operators are investing accordingly for instance, TIM Brasil, a unit of Telecom Italia Mobile, is to invest $2.5bn in Brazil in 2005-6 to increase network coverage and quality of service. TIM is growing ahead of the market and expects to have 57% growth by subscriber numbers in 2004, taking about 20% of the total. Its main rivals are Claro, part of Mexicos America Movil SA de CV (AMX); and Vivo, the largest of the three with 23m users, which is a joint venture between Spains Telefónica and Portugal Telecom. Vivo has spent $13bn-$14bn so far on its network, and TIM and Claro an estimated $6bn. However, all this investment activity is entirely focused on GSM, GPRS and EDGE, not 3G, and WiMAX may prove a better way to add new spectrum and introduce new services for some cellcos, especially if Anatel makes the 1.9GHz 3G spectrum technology neutral.

WiMax in Brazil

Brazil has already been the most active Latin American nation, along with Mexico, in promoting broadband fixed wireless services and testing portable or mobile extensions. The Brazilian administration has a program called Service of Digital Communications (SCD), which aims to bring internet access to remote areas. Intel is working with government agencies and will have a WiMAX pilot, probably in partnership with Siemens, running by the end of this year. The network will not only serve rural communities but will generate most of its revenue from business users and providing services to ISPs and hosting companies.

Also in Brazil, Neotec, a consortium of mobile operators, has tested a NextNet-based system in urban areas, in the MMDS spectrum that many Brazilian operators own for television services.

The Brazilian TVA project with Samsung may be a mixed blessing as far as Intel is concerned. While any victory for pre-WiMAX technologies is good for the chip giants agenda, it has no interest in seeing the Korean giants, which either make their own chips or source them from their own associates, becoming dominant on the global stage. Last week, Intel was more intent in playing up the victories to date for equipment based on its own silicon, and took the opportunity of the WiMAX Forums second plugfest at which vendors undergo initial interoperability tests - to talk up the 24 carriers that it says will have Intel-based pre-certified WiMAX systems live by year end. Although commercial chips from Intel have been slow to appear, opening a welcome window for smaller challengers such as Sequans, many broadband wireless vendors are now using its PRO/Wireless 5116 interface, including Alvarion, Aperto and Siemens.

WiMAX Plugfest

The Beijing plugfest was significant in location and timing, given that the Chinese authorities are debating several key decisions that will affect WiMAX chances in the huge market, and are opening up 2.3GHz spectrum the same band used in Korea by Wi-Bro. Samsung and LG believe they will have a natural advantage in the Chinese market (along with Nortel, through its important LG joint venture), because of the spectrum similarities and the growing tendency for Japan, China and Korea to seek to reduce dependence on western vendors and intellectual property. Intel and its allies, therefore, are lobbying hard in China and take any opportunity to show off non-Wi-Bro options.

The plugfest was also important in public relations terms to sustain the momentum behind the WiMAX certification process, which kicked off recently. After several delays, and considerable scepticism over how long the market will wait for fully featured, well priced standard gear, it is essential that the WiMAX Forum and its test laboratory partner Cetecom keep up the appearance that the process is now moving rapidly and producing real results.

Although the public plugfests are largely for profile and confidence boosting, with a great deal of detailed work to be done to complete full interoperability certification, several vendors saw the one in Beijing as a chance to place themselves ahead of the pack in customer perception. Other suppliers, of course, are waiting out this first stage, which will just certify the basic air interface, and will join the process at later stages, which will test equipment for additional functionality such as quality of service (first half of 2006), and then for indoor usage, portability and finally mobility. Alvarion, for instance, will not seek certification for the air interface alone but will deliver standards-badged products at stage two, while others like Motorola will wait for the final, mobile round.

Among those joining the Forums activities from day one are Airspan, Axxcelera, Redline and Aperto, plus chipmakers like PicoChip, Wavesat and Sequans. Airspan and Axxcelera said their base stations and subscriber units interoperated successfully, and also with base station platforms from PicoChip and Sequans, and Sequans CPEs. For its part, Aperto said it interoperated with four other vendors.

All this is important to prove that real progress is being made, but there is the risk that first generation certified equipment may be a step back from many operators proprietary systems, or they will have to buy significant non-certified elements to get the performance they want. For instance, several vendors now offer indoor subscriber units, which are important to consumer-focused service providers, but indoor devices will not be tested and certified until the third stage of the Forum process, probably in about six months time, and so some operators could purchase customer equipment that subsequently needs to be changed or updated to be fully interoperable with multivendor base stations.

In this situation, the pre-standard nature of Wi-Bro does not look like such a disadvantage, and Samsung will continue to push its claims in new markets. In the early stages of WiMAX, the eyes may be on Korea and China, but Latin America, with its extensive experience of broadband wireless and its undeveloped 3G infrastructure, may prove a region with, in the short term at least, greater growth potential.

This article originally ran in Wireless Watch, a publication of Rethink Research. Reproduced with permission. For information on the weekly Wireless Watch Newsletter and other Rethink Research products and services, click here.