It’s too early to tell whether LTE in Latin America will become complimentary to fixed broadband, or if it can eventually be positioned as a substitute, according to major operators and vendors at the second day of Informa’s LTE Latin America conference in Rio de Janeiro, Brazil.
Operators and analysts say they’ve watched the US market as Metro PCS launched its LTE service, and not only did the company not go after the fixed broadband market, it didn’t pursue mobile broadband either. It’s a challenge for most because of the necessary spectrum capacity, and some may not even pursue the USB modem market either, which offers profit margins that may prove too low.
A few things must be in place before Latin America sees massive adoption of LTE, says Mark Ventimiglia, strategic marketing director for TEKELEC. Because voice networks are already deployed and working, they’re serving as great cash generators for operators with little maintenance involved. There’s not a huge financial incentive to move to voiceover LTE, Ventimiglia said.
The second big hurdle for Brazil and neighboring countries is the technology gap that still separates voice quality of LTE with what customers get on today’s network, Ventimiglia said. “Your network capacity needs to be relatively high, and that’s an issue of providing enough latency on the pipe to sustain the same level of service,” he said. “Networks must be optimized not only to handle the traffic, but the mix of traffic, and maintain quality for the customer to not jeapordize the revenue they’re getting from that voice customer.”
Brazilian operators still feel like they’re on hold in many ways, as they wait for guidelines for LTE to be decided on by the nation’s telecom regulatory agency. An initial draft of those regulations was released this week for review.
“The regulatory issues will be important to understand the speed with which Brazil will deploy (LTE),” said Renan Oliveira de Barros Leal, executive director for strategy at Telefonica Brasil. “It’s next year, maybe, for the needs of the World Cup (in 2014). But there’s a lot of investment at stake, and without these rules being clear and equal, in terms of the players suffering the impact, (forecasting) is a difficult position to take.”
Some providers have discussed the potential benefits of simply upgrading the network they have now and supplement that by adding WiFi hotspots, instead of a total LTE revamp. The main issue that pops up for everyone are the limitations of WiFi regarding fraud and authentication.
“The big concern we see with WiFi offload is if you have a mobile device that moves off on to a WiFi network, you don’t have a secure way of authenticating that device like it is on the cellular network,” Ventimiglia said. “(Operators) are working on ways to authenticate devices on the WiFi network, through the mobile network.”
