Latin America 1998: The Year of cdmaOne™

By Perry LaForge
Executive Director, CDMA Development Group

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The world's first CDMA network was launched by Hutchison Telecom in Hong Kong in September 1995. At that time, the only digital wireless standard available to the South American market was IS-54 (USTDMA). Many South American telecommunications experts viewed the IS-95 based cdmaOne (locally known as CDMA) as technology that had much promise, but was as yet untested.

In the three years that have elapsed since the launch of cdmaOne, much has changed in the South American market. This year alone, seven different countries will commercially deploy more than ten cdmaOne networks. Brazil is launching four networks this year. In all, more than 30 cdmaOne contracts to deploy or trial both mobile and fixed wireless systems have been signed in 11 countries in the Caribbean Basin and South America.

Almost every month brings a new cdmaOne contract to the South American market. What caused this significant move towards CDMA as South America's digital wireless standard?

Telefonica del Peru Leads The Way

The pioneering period of cdmaOne in South America saw operators looking for better solutions to those that were already out there. While cdmaOne boasted technological superiority, it was still an unfamiliar option. Actual deployments in the region were necessary for operators to get hands on experience with the benefits CDMA provides.

Telefonica del Peru (TdP) was one of the first South American operators to adopt cdmaOne. TdP elected to try cdmaOne after U.S. competitor BellSouth purchased the Peruvian cellular operator Tele2000. TdP saw cdmaOne as a means to increase its capacity - which could be leveraged for a significant pricing advantage - and offer superior service to its customers over competing wireless standards.

In third quarter 1996, the Peruvian operator awarded Motorola a cdmaOne trial agreement that turned into a five year, $350 million nationwide contract. As a result, TdP's subscribers where the first in South America to experience the benefits of CDMA including better voice quality and longer battery life. TdP was shortly joined by other pioneer operators, including Puerto Rico's Centennial (4th quarter, 1996) and Mexico's Grupo Iusacell (3rd quarter, 1997).

Technological Superiority

What became apparent when cdmaOne launched was its technological superiority to rival standards TDMA and GSM. From a financial standpoint, operators received tremendous benefits from the capacity and frequency re-use capabilities of cdmaOne. Other primary benefits included superior voice quality, longer battery life, and the industry's best in-building penetration.

In one case, the differences were so persuasive, Mexican operator Grupo Iusacell literally switched digital wireless standards from TDMA to cdmaOne.

"We were able to experience both TDMA and cdmaOne [and now] I don't want to consider TDMA because it's obsolete," said Grupo Iusacell President Fulvio V. del Valle in a recent interview. "I believe CDMA -- for the fact that it is newer -- is the best selection for us. We had two real choices, GSM and cdmaOne. From a management perspective, cdmaOne's ease of deployment, ease of frequency re-use, ease of in-building penetration, ease of capacity, and the superior voice quality with the 13-Kbit voice decoder made the technology a clear choice."

When cdmaOne hit the market, subscriber satisfaction levels were substantially higher than other operators who were using rival digital standards or analogue cellular networks. Coupled with the significant operator benefits cdmaOne offered, the technology was poised for explosive growth.

cdmaOne Takes Off In Latin America

As time passed, cdmaOne became a proven and viable market option. South American telecom regulators looked to the technology and its extraordinary capacity as the best way to offer telecommunications, both in economic investment and for customer satisfaction. The success of cdmaOne is being felt with a recent wave of contracts. At press time, Venezuela became the seventh country this year to sign a cdmaOne contract, thanks to cellular operator Telcel's recent agreement with Lucent Technologies.

Brazil and Mexico are leading Latin America into the cdmaOne era with seventeen contracts for deployment and trials between the two nations. A critical catalyst in Brazil was the recent B-Band auction, which encouraged local cellular operators to differentiate from incoming B-Band operators by offering cdmaOne. Brazilian cellular operator Telesp is already deploying cdmaOne in its Sao Paulo cellular market. In all, nine of Brazil's ten cdmaOne contracts are in the cellular band.

Mexico has also seen significant cdmaOne activity. Mexico's recent B-Band (otherwise known as the PCS band) auctions saw three operators elect cdmaOne, including two nationwide operators Sistemas Profesionales de Comunicacion (SPC) and Pegaso Telecomunicaciones S.A. de C.V. Five cellular operators have signed cdmaOne contracts in eight of the country's nine regions. In all, the five cellular networks command more than 600,000 cdmaOne subscribers.

The reasons for Latin American operators to choose cdmaOne are clear. cdmaOne provides both economic advantages and superior quality of service when compared to other digital technologies. Operators also benefit from a clear migration path to third generation services, Wireless Local Loop capabilities and forthcoming dynamic identification technologies that allow cdmaOne handsets to function in any network regardless of frequency.

Given the technology's current and future technological superiority, those Latin American operators who have joined the cdmaOne movement are likely to be joined by other operators in both their country and neighboring ones. Latin America is moving to CDMA.

SIDEBAR: cdmaOne WLL Arising

Of the 30 Latin American cdmaOne contracts, seven are for Wireless Local Loop (WLL) networks. cdmaOne WLL operators have universal access to customers in their coverage area at low cost. With the technology's impressive rollout time and extraordinary capacity capabilities, cdmaOne WLL operators can rapidly enter the market and pick up new subscribers. Customers benefit from unmatched voice quality achieved via 13Kbit and EVRC voicecoders and from value-added features such as wide-area cordless functionality.