NuevaTel to complete suburban GSM networks YE04

Bolivian mobile operator NuevaTel expects by end-2004 to have complete GSM coverage in the suburban areas of the country's three largest cities, La Paz, Cochabamba, and Santa Cruz, the company's regulatory and development VP Freddy Maldonado told BNamericas. "The key factor for Bolivian GSM is still coverage. TDMA has better coverage still for small towns," Maldonado said, adding that two highways linking the three cities are the second priority for expanding GSM coverage. Another medium-term challenge facing the operator today is the implementation of prepaid international roaming services, he said. Though the segment will represent very minimal revenue in coming years, the ability to offer the service improves the operator's image as cutting edge. "The objective today is retention and positioning," rather than expectancy for robust revenues, Maldonado said. International roaming services in general is a competitive advantage for GSM, he added, due to its easy implementation; negotiations are set with fellow GSM operators worldwide via templates provided by the international GSM Association. The operator has sealed agreements with 50 other GSM operators since beginning negotiations one year ago and now is signing 10-20 new agreements monthly. Today traffic stands as evenly divided between incoming and outgoing calls, but current trends indicate that incoming calls will make up 70% of NuevaTel's international roaming revenue over the short-term, he said. NuevaTel also has plans to boost its data revenues, in making available 32 kilobyte cards for SIM toolkit usage to its subscriber base by year-end, Maldonado said. SIM toolkits include ready made applications to GSM users through a menu on the handset. "ARPU has been declining all over the world. Value-added services have to compensate," he said. Maldonado said 30% of NuevaTel's subscribers send up to 10 SMS messages monthly. Volume is still very low due to the inexistence of inter-operator agreements in Bolivia, he said. For now Nuevatel is content with 2G data services, but as soon as EDGE suppliers make cheaper handsets it will likely build out an EDGE network, Maldonado added. At this point UMTS or 3G GSM services are out of the question, because additional spectrum would be needed, and new licenses may be costly to acquire, he said. Owned by US-based mobile operator Western Wireless International (70%) and Bolivian local telephone cooperative Comteco (30%), NuevaTel operates under the brand Viva GSM. Bolivia's other mobile operators are Telecom Italia's (NYSE: TI) Entel and Millicom's (Nasdaq: MICC) Telecel. About 90% of Bolivian GSM subscribers are located in La Paz, Cochabamba and Santa Cruz.