article reprint — TELLABS INSPIRE june 2008

3G Comes to Latin America

In less than a year, 25 operators in 14 countries have launched 3G. Why now?
By Erasmo Rojas

In 2001, Japan’s NTT DoCoMo was the first operator worldwide to With the exception of
launch 3G GSM technology. Branded as “FOMA” and deployed in Ancel in Uruguay, all
the 2100 MHz band, the service achieved incredible market success. of these networks were
The next milestone in the 3G evolution occurred in December 2005, launched using existing
when Cingular (today AT&T Mobility) became the first operator “in-band” spectrum at
worldwide to launch HSDPA. Both service providers continue to 850 MHz and 1900
evolve their networks to even more advanced levels. MHz. Only in the sec-
ond half of 2008 and
Now the 3G revolution is pushing into Latin America and the into 2009 will we start
Caribbean, which is a unique wireless region for several reasons. seeing 3G HSDPA
The area has a relatively low ARPU of approximately US$15, networks deployed
with voice as the predominant revenue source. Prepaid makes in the new spectrum
up about 80 percent of the market, and there is a high wireless of 1900/2100 MHz
penetration rate, expected to reach nearly 70 percent by the end in Brazil. Although
of 2008. These factors, plus the high investment costs required the adoption rate of
for both wireless infrastructure and devices, make it necessary 3G services will be
for operators to build economies of scale for a profitable business. slow at first, there
are already more
The operators in Latin America and the Caribbean determined that than 211,000 UMTS/
the time was right in 2006 to deploy 3G services to deliver greater HSDPA subscriptions in
network capacity (rather than spending money to expand their 2G Latin America and the
networks) and to boost the value-added services’ contribution to Caribbean after less
ARPU enabled by 3G services. Once 3G HSPA was technically and than 18 months.
economically proven in the United States, it was time for Latin
America to consider adopting the technology in existing spectrum, The outlook for the GSM family of technologies’ evolution to 3G in
as there were more 3G devices of all types available at affordable Latin America is very promising. HSDPA and EDGE will be the best
prices for end users. foundation to offer 3G services to both enterprise and consumers.
The operators have made an extra effort to offer good coverage and
Throughout most of the Americas region, UMTS/HSPA networks a variety of 3G devices that will suit the needs and budgets of both
are deployed in the spectrum bands of 850/1900 MHz. T-Mobile postpaid and prepaid users. With wireless penetration in the region
USA recently launched UMTS in the 1700/2100 GHz bands, and approaching 70 percent, the operators realize that to increase
there are plans to auction this spectrum this year for 3G networks ARPU, retain customers and remain competitive, the name of the
in countries such as Chile and Mexico. game is 3G.

25 Operators, 14 Countries, 211,000 Customers Erasmo Rojas is director of Latin America

During the last quarter of 2006, AT&T (Puerto Rico) and Entel and the Caribbean at 3G Americas, a group of
PCS (Chile) became the first two operators in the region to launch mobile operators and equipment manufacturers
in the Americas using the GSM family of wire-
HSDPA commercially. Following on their heels, Telecom Personal
less technologies. For more information, visit
(Argentina) launched UMTS/HSDPA in the first half of 2007. www.3gamericas.org.

The pace of deployment picked up significantly during the second

half of 2007, when a flurry of 10 new UMTS/HSDPA networks were
launched in different parts of the region: two in Argentina, one in
Aruba, two in Brazil, one in Chile, one in Paraguay and three in
Uruguay. The speed of UMTS/HSDPA launches has not slowed dur-
ing 2008. By the end of April, an additional 12 3G UMTS/HSDPA
networks were deployed, for a total of 25 operators in 14 countries.
2 article reprint — 3G Comes to Latin America

Acronym HSDPA High-Speed Downlink Packet Access

ARPU Average Revenue Per User HSPA High-Speed Packet Access
EDGE Enhanced Data Rates for GSM Evolution 3G Third-Generation
FOMA Freedom of Mobile Multimedia Access 2G Second-Generation
GSM Global System for Mobile Communications UMTS Universal Mobile Telecommunications System

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