3G subscriptions estimated to surge 50% to 32mn this year

- Friday, January 14, 2011

3G subscriptions estimated to surge 50% to 32mn this year

Brazil's 3G subscriber base is expected to increase 50% to nearly 32mn in 2011, while growth in other Latin American countries could push down the country's regional weighting of 3G clients, the president of wireless industry trade association 4G Americas' Latin America unit, Erasmo Rojas, told BNamericas.

Brazil's 21mn 3G subscribers currently account for nearly 60% of the regional tally, a percentage which Rojas expects to come down to about 50% this year as Latin America surges to 60mn total. 4G Americas expects data - rather than traditional voice - plans to lead growth in Brazil and beyond.

Several factors account for 3G penetration in Brazil, Rojas said. Foremost, high-speed packet access (HSPA) technology was rapidly offered by various operators - Vivo, Claro, Oi and TIM - soon after its initial market launch.

Start your 15 day free trial now!

cta-arrow

Already a subscriber? Please, login

"We have seen that users adopt the technology quicker when it's offered by several competitors around the same time, instead of one operator with a large network," Rojas said.

A trend away from modems in favor of smartphones has also helped accelerate adoption, he added. In 3Q09, 3G users were divided evenly between the two devices. Today, smartphones have about a 75% share.

"We believe there will be more and more devices, and prices will be more reasonable," Rojas said, citing the introduction of iPhones, BlackBerrys and phones running Google's Android OPS to Brazil. "We think this will push mobile internet adoption as well."

While overall mobile penetration has topped 100%, the 4G Americas executive continued, broadband usage remains at about 10%. He foresees the government-mandated extension of 3G services to rural areas and remote municipalities as a force that will start closing the gap in 2011.

"We have heard Vivo saying that more than 50% of municipalities will be covered in Brazil," he said. "And soon another competitor will arrive, Nextel, so it will be interesting to see what happens there. They've acted thus far in a very niche market, but now they want to compete nationally."

4G AND HSPA+

As for 4G services, Rojas predicted the technology could arrive in the region on a small-scale late this year or early next year.

"We think Colombia will be one of the first countries, as they already auctioned the 2.5-2.6 GHz spectrum last year," he said.

4G Americas is also watching for the introduction of long-term evolution (LTE) in Chile and Mexico. Brazil, Rojas noted, will probably take a little longer.

Telecom regulator "Anatel's first push was to get leftover 3G spectrum out of the way, which it finished last month," he said. "In the middle of this year, they will start discussing and divulging the rules of the [4G] auction."

HSPA+, which affords users connections speeds double or triple those of traditional HSPA, has already been implemented in Chile. Rojas is confident HSPA+ will spread to other major cities in the region but will require operators to improve their backbone infrastructure.

SPECTRUM CAPS

4G Americas identified spectrum caps as one obstacle for mobile broadband growth.

"We don't like spectrum caps, because we believe that caps fulfilled their mission in the last decade," Rojas said. "Regulators wanted to limit spectrums to prevent monopolies. Now, it's an experiment and we don't know if it will be successful. It hasn't been tested."

Caps inhibit current users of the technology by preventing existing operators from introducing new products and services, he said, and the caps even create network congestion.

"Some operators have a fifth or one-tenth the amount of users, but the same amount of spectrum," Rojas said. "We feel for these markets to go up to LTE, the regulators will have to deal with this spectrum cap issue."

The demands on 3G and 4G differ from demands under voice-only plans, according to the executive.

"The type of service data demands are important, whether for five or 500 people, so the rules for assigning spectrum should adapt," he said. "You don't know whether users are going to do a simple Google search or download some HD video."