3G TECHNOLOGY IN LATIN AMERICA

Most of Latin-American countries face uncertainty to carry out investments on third generation UMTS networks because of their available frequency bands inconsistency with the ones used in Japan and Europe, the recent initiatives in United States to deploy UMTS on the same 2G bands, the permanent discussion to incur on other frequency bands, the great investments needed and the potential existing market to data services development

Investment income-yield capacity on 2G networks

Activities on Telecommunication areas are commercial activities which generate great capital investments and need to be recovered in long-term. Recently, great investments on the Latin American region have been generated to create the existing scenario with GSM technology. The introduction of this technology has solved many existing problems on former systems. The great mobile market competence and the great prepaid segment development have lead operators to introduce permanent technological innovations and great marketing expenditures which require reasonable periods to recover investments made.

Voice market still offer huge growth gaps on 2G, which allow making investment profitable. 3G deployment requires huge investments to install from cero parallel networks along with the existing ones. In addition has to be considered the fact of the licenses given back in several European countries and the recurrent discussion about the impact of the election of frequency bands on the quantity of base stations to be installed.

In this sense, Latin America has been cautiously moving forward on data services introduction on the existing 2G networks using GPRS and EDGE.

The data market

From the information obtained from Europe to five years since 3G license bidding process was carried out, it’s observed that data services usage offered by this technology have been lower than expected and a longer period of time is required to create a significant demand.

From above we conclude that it is necessary to seriously consider the potential service demand and data applications existing on the market, being the main benefit of 3G technology. Meanwhile, in Latin America there are still voice market growth gaps, so it is reasonable to exploit this market and gradually introduce data services using available updates within the same GSM networks in 2G.

Technological maturity

In relation to technologies, it is observed that in UMTS there are already several revisions which improve performance of former versions adopted in Japan and it’s been also going ahead in the evolution from UMTS to others improved radio interfaces. There are also advances in internet broadband access technologies, which in the short term will start to introduce mobility and voice capacity over IP.

Given the great variety of solutions and technological versions, it seems cautious to await for a greater maturity in markets in order to take advantage of UMTS universalization benefits and the eventual complementing with emerging technologies. Besides being expensive technologies, very complex and of recently introduction, which generates the uncertainties mentioned before, today these are no longer competitive comparing with widely tested technologies on local fixed telephony.