In Mexico, the Federal Competition Commission (CFC) 21 endorsed the bid by the Commission Federal de Telecommunications (Cofetel) in which the winner was the Televisa and Nextel consortium. Meanwhile, the Mexican Parliament requested the government to cancel the tender, arguing its outcome did not offer the best financial reward for Mexico. Televisa and Nextel were declared winners 30 MHz block in the 1.7 GHz band nationwide for only 14.3 million dollars.

Paraguayan Communications Company (Copaco) announced its first mobile offering after its acquisition of mobile operator Vox. Copaco plans to offer 200,000 mobile phones to some of its existing fixed line costumers. The operator is planning a tender to decide to which mobile phone manufacturer will buy those units.

In Brazil, the National Telecommunications Agency (Anatel) wants to force operators to ensure at least 50% of their advertised mobile broadband speeds during pick hours. The proposal arises from the second public consultation about the regulation of mobile phone quality of service. “Speed is one of the most important quality factors in the perception of users,” said Bruno Ramos, ANATEL’s general manager.

During the first six months of this year, sales of personal computers (PCs) in Brazil grew by 20% over the same period a year earlier, Brazilian Association of Electrical and Electronics Industry (Abinee). Abinee forecasts sales of 14 million units for all 2010, representing an increase of 17% over 2009. By 2011, the association is forecasting sales of 15.8 million units.

And in Argentina notebook sales surpassed desktop sales for the first time, said Hewlett-Packard in a statement. According to HP, 2.8 million PCs were sold during the first half of 2010.

The Chilean House of Representatives unanimously approved the draft for fixed and mobile number portability Law. Portability will begin later this year and its full implementation will be in 2011.

Telefónica Móviles Colombia, which owns Movistar, said it would issue bonds for about 194 million dollars. The proceeds from the sale of these bonds will be used to refinance debt already incurred by the company. Telefónica Móviles Colombia, a subsidiary of Spanish company, through Movistar is the second mobile operator in the country with 22% market share.

Mariano de Beer, CEO of Telefónica Brazil, said the operator expects 10,000 households connected to fiber (FTTH) by the end of the year. The executive said the operator is not advertising its FTTH offering because its coverage only reaches 22 districts of Sao Paulo. Broadband packages through fiber cost 170 dollars per month for 100 megabytes of download.

Motorola announced last week that the number of users in iDEN networks has reached 10 million worldwide, excluding service operators offering this technology in the United States. Currently there are 30 operating iDEN networks in 23 countries. Around 80% of these users belong to Latin American trunking operator NII Holdings.

The president of the Dominican Institute of Telecommunications (INDOTEL), José Rafael Vargas, announced that the Dominican Republic would adopt the American digital TV ATSC standard. TV operators are required to upgrade within the next five years. Analogue switch-off is scheduled for September 2015.

Both Argentinean mobile operators Personal and Movistar increased their prices between 15 and 20%. The price hike is affecting both prepaid and postpaid users. The long distance call cost is increasing 15% in both operators.

The Brazilian government announced the auction for the digital TV infrastructure build up, which rules should be ready within the next three months. The winner will sign a 1.5-billion dollars contract in exchange for building 256 digital TV transmission towers throughout the country.

Meanwhile, Brazilian National Telecommunications Agency (Anatel) opened last week the 2,5GHz discussion for mobile broadband services over fourth generation (4G) wireless technologies, most likely to be used for LTE. Public consultation on the spectrum auction will begin in November. The call for the tender participants will be made in September of next year. It will not be until December 2012 when winners will get a hold of their licenses, which means LTE will not be deployed until then in that frequency band.

Last week it was also leaked to the press rumors that Vodafone could be preparing to invest in mobile operator TIM Brazil. The Brazilian telecommunications market is suffering a wave shock since Telefónica finally announced it had acquired Portugal Telecom’s stake in largest mobile operator Vivo. For some reason, Vodafone thinks the right time to enter the Latin American region as arrived and TIM seems to be the only available bate to bite.

And if Vodafone is planning to enter the Brazilian market, Carlos Slim did not want to get out of all the press frenzy and decided to strike back at Telefónica´s announcement and maneuvering and it announced that Embratel would purchase paid TV operator Net Services preferred shares for a total of 2.6 billion dollars. That way, America Móvil aims at consolidating all its operations in Brazil, including entering the paid TV market for a possible quadruple play offering. Embratel already owns Net Service 37.9 percent of common shares and 21.2 percent of preferred shares.

In Argentina, Telecom Italia announced it has finally reached an agreement with Grupo Werthein, its partner in the fixed-line operator Telecom Argentina, thus, closing the long conflict between the two companies in that market.

Telecom Argentina announced that its earnings rose during the first half of 2010 by 216 million dollars. The increase is due to a rise in sales primarily in the mobile telephony business, data and Internet, the operator said. The increase in earnings represents a 23 percent increase over the same period a year earlier, when it recorded profits of 178 million.

In neighboring Uruguay, Telecom Personal has been negotiating with state-owned Antel since 2009 its entry in that market as an MVNO. Last year, both companies worked together in the deployment of an undersea cable between the towns of Maldonado, Uruguay and the Argentinean city of Las Toninas.

And in Ecuador, state-owned National Telecommunication Corporation (CNT) officially absorbed troubling mobile operator Telecsa SA, also known as Alegro PCS. CNT plans to launch an HSPA+ network to compete with Porta and Movistar in the 3G arena, where it is placing all its hopes to gain some market share, which it will not be very difficult given its current small share.

In the first half of 2010 the mobile broadband user base in Chile totaled 920,401, 46 percent more than the 630,492 number of users recorded in December 2009, according to the Association of Mobile Telephony (Atelman). The broadband market is made up of 36 percent of mobile connections and 64 percent fixed. Industry analysts indicate that in the coming years the trend is for mobile connections to match that of fixed, although many users will be using both types of connections since mobile is becoming a complement to fixed access, rather than a substitute.

El Salvador plans to launch a project to connect over 890 rural schools to the Internet. The program will use the Armed Forces wireless network to provide connectivity to remote and rural areas.

Telefónica expects the Venezuela government to authorized the dispatch 1.8 billion dollars worth of dividends back to Spain. The profits generated by the operator in that country have been frozen since January of this year, when a new exchange rate control scheme was introduced to cope with the local currency devaluation.

Colombia set new standards to define broadband access. The Communications Regulation Commission (CRC) defined through a resolution the new minimum speed rates for a broadband access to be considered as such. From now on, one megabyte per second (Mbps) in the downlink and 512 kilobytes per second (Kbps) in the upstream are the new minimum speeds that define a broadband connection in Colombia. These values are twice as much as those of the previous resolution passed in 2008.

And this is it for now. Feel free to leave a comment and suggestions so we can improve our weekly reporting.

QuovisMedia

So, this is how it all ended, or begins, depending on your mood: Telefónica announced that it had signed an agreement with Portugal Telecom (PT) to buy its stake in Brazilian mobile operator Vivo. Telefónica will pay 7.5 billion Euros in three stages and the operation will be completed in a period of time no longer than 30 days. The Spanish company said that after that period it expects the Brazilian regulatory approval, which we all also know it is just a matter of time—or you thought that Telefónica had not gotten the informal approval before making its offering?—. Telefónica has the intention to integrate its fixed line operator Telesp with Vivo, becoming the leading telecommunications operator in Brazil.

Just soon after the acquisition, Telefónica announced its results for the first half of 2010. The Spanish giant’s net profit rose 9.4 percent, exceeding analysts’ forecasts, which estimated a maximum growth of 7.8 percent. Telefónica had at the end of June 273.5 million customers worldwide, of which 44 million are in Spain. Its largest market is Brazil with over 75 million subscribers.

Meanwhile, Brazilian mobile operator Oi announced that Portugal Telecom (PT) would purchase shares in the company and two of its operating units for 4.7 billion dollars—you all know where that money came from, don’t you—. Oi described the operation as “a partnership” that will allow both companies to increase their presence in Brazil and one that would allow for an expansion in other countries. Oi is controlled by Brazilian investors, such as: National Bank of Economic and Social Development (BNDES), Brazil’s government-owned funds, pension funds and national business groups. The Brazilian state is the main shareholder in the operator with a 31.4 percent stake in Telemar Participacoes.

Oi also last week announced that it plans to invest 1.7 billion dollars in the second half of this year, according to Alex Zornig, Oi’s director of finance and investor relations. Most of the investment will be directed towards broadband and 3G network expansion and completion of infrastructure in the states of Rio Grande and Santa Catarina.

But PT buying stake in Oi was not an easy task as national pride surrounds the operator. Brazilian President, Luiz Inácio Lula da Silva, said he would make sure that Oi continues to be under national control. He said, however, that the agreement with PT was well received by the authorities. “The only thing I can guarantee is that while I am president, the company will remain a domestic one, is for that purpose that it was created to be a national company and help the country in the implementation of broadband,” he said. The National Telecommunications Agency (ANATEL) must approve PT entrance in Oi—but as we know, this was also informally approved before hand—.

And you imagine how much free publicity Vivo and Oi were getting out of all this. What happened with Claro and TIM during that week? Well, Claro, remained quiet as far as we know, they are probably planning how to address the changes in the market. TIM, on the other hand, announced an aggressive sales force that will engage in gorilla warfare on the streets of Brazil. The new street sales force aims at capturing low-income clients in socioeconomic classes C and D.

Leaving Brazil to another major market with far less activity in terms of mergers and acquisitions: Mexico. The Mexican telecommunications market will be worth 25 billion in 2011, according to IDC forecasts released last week. The entry of new operators will generate greater choice and competition in providing quadruple play services, fixed and mobile telephony, pay TV and Internet package, said the IDC report.

In Panamá, the National Authority of Public Services (ASEP) estimates that revenues from the telecommunications sector will be about 1,000 million dollars in 2010 due to the expansion of the sector. The regulator indicated that the country has about six million mobile lines in contrast with its population of 3.3 million inhabitants. The number of cell lines is ten times higher than fixed lines. Fixed telephony penetration stands at 15 percent.

Also ASEP granted approval to four TV stations to start DVB-T transmissions testing on channels 41, 42, 45 and 47, said the Panamanian regulator in a statement. Companies that receive authorization were State System of Radio and Television (SERTV), Corporación MEDCOM Panama, National Television (TVN Channel 2) and Hosanna Vision. These companies must submit detailed reports about their tests to the authorities. The regulator has not yet released an approximate timetable or details defining the transition from analog to digital TV.

And in Costa Rica the opening of the telecommunications market is not advancing without incidents. Digicel, Cable & Wireless (C&W), Tigo (Millicom) and Claro (America Móvil) said that they are still very interested in participating in bidding for one out of the three frequencies that will be available to operate a cellular telephony network in the country. However, operators share concerns about the administrative process. In this sense, they requested the regulator to clarify issues related to base stations installation, interconnection with ICE and the use of microwave frequencies. In this regard, George Miley, from Sutel, acknowledged that there are still issues to be addressed and Sutel is working on them. Digicel and Claro have already indicated that they have designed their future mobile network to ensure maximum coverage. The spectrum tender is scheduled for the second or third week of August.

Signals Telecom Consulting had a busy week releasing projections in two Latin American countries. In Chile, paid TV revenues will exceed 5.5 billion dollars by 2015. In Ecuador broadband revenues will be over 108 million dollars between 2010-2015. The compound annual income growth rate (CAGR) for mobile broadband services in the period 2010-2015 will be 46.95 percent, Signals said.

Going back to Brazil, Anatel said that the country had 8.4 million paid TV homes at the end of June with pay TV. Considering the amount of people per household, according to Brazilian Institute of Geography and Statistics (IBGE), paid TV services reaches 27.8 million Brazilians, 14.4 percent of the total population. There were 217,299 new subscriptions in June, representing 2.6 percent more than in May. The accumulated growth in the first six months of the year is 12 percent.

And this is it for this week. We will see you here next.

QuovisMedia Team.

And fist of, we need to report on America Móvil financial results. Carlos Slim mobile operator reported 18% lower profit margins during the second quarter of this year. During that period, América Móvil profits reached US$ 1.450 billion. However, net income grew and reached US$7.900 million between April and June, representing an increase of 11.9 percent compared with the same quarter last year.

In Paraguay state owned operator Copaco paid US$3 million for mobile operator Vox, stated Mario Esquivel president of Copaco, at a press conference held on July 22^nd. According to an audit of the Uruguayan state-owned operator Antel, Vox assets are valued at US$16.5 million.

And Argentina will see the launch of its first MVNO. The Federation of Southern Cooperatives (Fecosur) will launch on July 29^th its own MVNO. “Our” (in Spanish “Nosotros”) is the name chosen for the new MVNO, which will use Telecom Personal infrastructure.

Bolivia government sent a commission to China to manage and speed up the construction and purchase of the Tupac Katari telecommunications satellite. The country is planning to launch its first satellite sometime during 2013. Among its uses is projected to improve Internet connectivity and mobile telephony, mainly in rural areas. According to the agreement signed in April 2009 between the Bolivian Space Agency (ABE) and the Chinese company Great Wall Industries Corporation, the project demands an investment of approximately between US$200 and US$300 million.

Following the social network trend on mobile networks, Personal and Movistar in Argentina announced the launch of their SMS based Twitter offering.

The Brazilian Association of Telecommunication Resources (ABR Telecom) reported that from September 2008 until 30 June of this year 5.5 million users carry their phone number to another operator. ABR Telecom explained that in the first quarter of this year 1.02 and 1.08 million fixed and mobile numbers respectively were ported. Since it launch, 70 percent of porting numbers come from the mobile market.

Total investments in the telecommunications sector in Mexico this year will reach US$3.411 billion, representing a 16 percent increase over 2009, according to estimates from The Competitive Intelligence Unit.

The Supervisory Agency for Private Investment in Telecommunications (Osiptel) in Peru approved the new productivity factor that reduces by 5.98 percent annual fixed telephone rates for local and long distance calls. The tariff reduction will be effective from September 1^st and it will apply until August of 2013. The state agency estimates that the reduction in costs will produce savings of US$17.67 million for fixed line telephone users.

In Nicaragua mobile phone penetration will rise from 53.9 percent in 2010 to 80 percent in 2015, according to a recent report by Pyramid Research. The consultancy predicts that the market will grow at a compound annual rate (CARG) of 6.5 percent over the next five years. The market value will increase from US$ 478 million in 2010 to US$655 in 2015.

Panama’s regulator, National Authority of Public Services (ASEP), announced August 19th as the new date for companies to submit their proposals for the implementation of number portability. The government had declared the tender void in June, arguing that none of the companies fully complied with all the requirements and specifications.

Instituto Costarricense de Electricidad (ICE) is for the first time interconnecting with private companies this week. IP telephony companies can now interconnect with ICE´s infrastructre and begin marketing their services.

Telefonica plans to invest US$517.5 million in Brazil in broadband development this year, up 24 percent from the US$417.3 million it invested in 2009. This represents a 40 percent of the total investment of Telefónica in 2010 in that country. In the first six months of 2010 its customer base grew 14 percent compared to December 2009. According to company executives, the cost of broadband service has been reduced by nearly 80 percent since the year 2000.

The Minister of Transport and Telecommunications in Chile, Felipe Morande, told the newspaper El Financiero they hope to achieve a 70 percent broadband coverage by 2014. Morande said that the government wants to have full broadband coverage in the next eight years.

Tigo and Viva in Paraguay are offering prepaid BlackBerry devices and plans.

Telefonica, NII Holdings (Nextel Televisa) and Iusacell won the mobile telephony frequencies tender in Mexico, said Commission Federal de Telecomunicaciones (Cofetel).

Telmex launched its range of Video on Demand (VOD) services for their users subscribed to Advanced TV services. With this new offering the company competes against other pay TV services offered by operators such as DirectTV. The VOD service will only be available at first in the city of Bogotá, subject to coverage.

See you next week, we promise!

Much has been made of mobile network operators running the risk of becoming “dumb pipes”.  The delivery of all-you-can-eat data plans and success of Apple’s application store have fueled this discussion. However, this conversation fails to note an important fact – the only party that knows at any given time the who, what, how and where of mobile service usage is the network operator. 

To read the entire piece click on TeleSemana.com

To read the full article go to ExpandIT

To read the entire piece click on TyN Magazine 

Later in the week, it was reported that Telefónica could consider buying PT after the rejection of its offer. PT could still change its mind, as the offering is open until mid June. Needless to say, PT did not like speculation around the Spanish operator intention to get all PT as to acquire Vivo.

Vivo had a busy week last week and while Telefónica and PT were discussing its future structure, Vivo´s president, Roberto Lima, said that it is impossible to offer mobile broadband access for US$8.5 as suggested by the National Broadband Plan, which is being addressed in Brazil. According to Lima, the lowest price at which mobile broadband could be offer would be US$16,9, assuming always a set up a download limit per user. The National Broadband Plan hopes to offer broadband services to 27 million households in Brazil by 2014, of which 4.6 million would access the service via 3G networks.

In Mexico, mobile operator Iusacell will appeal its disqualification from the CFE fiber tender, the company announced later last week. The Secretary of Communications and Transport (SCT) expelled Iusacell from the Federal Electricity Commission (CFE) fiber optic project tender arguing the operator failed to properly submit all information required. Iusacell does not dispute such claim but considers it is not sufficient to justify its expulsion. The company plans legal actions if it is not allowed to participate.
Smartphone sales will grow 33% CAGR in Latin America between 2010 and 2015, Coda Research Consultancy said last week. Worldwide growth it is expected to be 24%.

In Costa Rica opening up the telecom market is taking forever. The Superintendence of Telecommunications (Sutel) reported that the awarding of the three mobile licenses could take between six to nine months.However, this period is without taking into consideration possible delays due to operators’ disagreement with the final outcome. Five operators have shown interest in participating: Cable & Wireless, America Movil, Movistar, Digicel and Millicom. With the entry of three of these groups, Costa Rica would have four mobile service providers.

In Venezuela Movistar reacted to accusations of offering a bad service and speculating with users rights. Earlier this week, the Public Services Subcommittee agreed to submit to the Supreme Court of Justice of Venezuela a lawsuit against mobile operators for fraud and intentionally offer a deficient service.
Deputy Angel Landaeta accused operators, especially Movistar, to speculate with its service offering for its own benefit. Movistar reacted by issuing a press release on its website arguing it is open to cooperate with the authorities to sort those accusations out.

In Colombia, ETB is in the process of finding a strategic partner to assure its future growth and competitive edge. After several delays, the operator said that it would have signed with its future strategic partner by the end of 2010. The operator made that statement after the process had to be postponed for 30 days at the request of the companies trying to become its strategic partner.

Thanks for reading and let us know how we are doing so we can improve our weekly Wrap Up.
QuovisMedia Team

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