Regulatory Gains Aid Latin America

By David Hartshorn

Expanded satellite market access and earth station interoperability topped the telecom agenda at a recent government/industry meeting held in El Salvador. The focus was to identify the role satellites could play in improving broadband operating conditions throughout the region.

As Latin American demand for satellite-based applications has grown, urgency has been mounting for the development of ways to overcome regulatory problems throughout the region. Those regulatory gaps include a lack of standardization, high licensing fees, severe hub restrictions, and difficulty in obtaining regulatory approvals.

In response to these challenges, a region-wide campaign was rolled out on two fronts:

Satellite Regulatory Reform: Government and industry leaders jointly drafted recommendations and regulatory guidelines to facilitate provision of satellite communications in the Americas. The initiatives, which build on recent satellite market-access and licensing gains made throughout the region, were igned during an October meeting of the Inter- American Telecommunications Commission’s (CITEL’s) Permanent Consultative Committee II: Radio- communications Including Broadcasting.

CITEL, the telecom regulatory body of the Organization of American States, is the hemisphere’s main forum for government and private sector representatives to coordinate regional efforts to develop telecommunications in the region. During the meeting, CITEL and the Global VSAT Forum (GVF) – a non-profit association of international satellite companies – had signed an agreement to jointly promote the development of satellite-based communications in the Americas.

Interoperability: During Futurecom 2003 in Florianopolis, Brazil, the GVF led an international satellite industry effort to heighten awareness among potential end-users. The initiative was aimed at partnering with the European Telecommunications Standards Institute (ETSI) in its role as the lead organization of the Alliance for the Information Society, a European Union-funded program to promote digital connectivity and interoperability throughout Latin America.

At the conference, Brazil’s Hispamar Satellites announced that it had purchased 3,000 terminals to be used for one of the first broadband multimedia platforms in Latin America based on ETSI’s digital video broadcast-return channel via satellite (DVB-RCS) technology. This should improve interoperability among Latin American and European satellite systems, while providing an advanced broadband infrastructure to service the requirements of ISPs, ASPs, mobile telecom systems, and other point-to-multipoint applications in the region.

Rising Stakes

The prospect of improved regulatory conditions and the development of new technologies couldn’t come at a better time. The Americas region has demonstrated its strong interest in using broadband services. For example, the Americas comprised 38.9 percent of broadband subscribers worldwide in 2002, second only to Asia with 39.9 percent, and Europe with 20.8 percent. Oceania accounted for 0.5 percent and the Africa/Middle East usage was so thin its share was measured at 0.0 percent.

The statistics, derived from research conducted for the International Telecommunication Union’s recent “Birth of Broadband” report, shows that by far most of the broadband penetration was in Canada and the United States, notching, 11.2 million and 6.9 million subscribers, respectively. By contrast, the remaining top 10 countries using broadband services in the Americas, ranked by their penetration rate, are: St. Vincent, 0.9 percent; Chile, 0.7 percent; Grenada, 0.5 percent; Venezuela, 0.5 percent; Brasil, 0.4 percent; Dominica, 0.4 percent; and Argentina, 0.3 percent.

Detractors might suggest that such low penetration rates underscore an inherent inability for satellite to effectively serve developing countries – and in particular rural areas. However, a presentation at the CITEL meeting suggests otherwise. A representative of the Peruvian government reported that approximately 5,000 rural towns in his country had been successfully connected to the Internet using VSATs. The project, which was designed by the Telecommunications Private Investment Supervising Organization (OSIPTEL), demonstrated to the Peruvian administration a number of advantages of using satellite-based solutions, including:

• Eliminating the need for terrestrial repeaters, “which are exposed to acts of vandalism”;
• Providing nationwide coverage that encompasses unserved remote areas;
• Enabling efficient traffic handling between remote stations and optimized use of space segment through centralized management;
• Consuming energy at comparatively low levels;
• Delivering “tailor-made solutions”; and
• Minimizing preventive/corrective maintenance.

The Peruvian case study was not an isolated example. Another recent ITU report, “Trends in Telecommunication Reform 2003,” cites a village area network (VAN) project in the rural community of Bohechio in the Dominican Republic. In that locale, a hybrid VSAT/WiFi system effectively extended the facilities of a multi-purpose community telecenter. A village of 7,000 people in one of the Dominican Republic’s least developed communities was linked to the telecommunications network. Telecom services to schools, a medical clinic and agricultural enterprises are available in that village. Now, calls to the capital city – which had cost 30 cents per minute via the former monopoly provider – were cut to 18 cents per minute.

Finally, the ITU report goes one step further. It estimates potential revenues from rural markets in Latin America and the Caribbean potentially could be almost $3 billion per year.

While substantial progress has been achieved in Latin America’s regulatory arena, much work remains to be done to optimize operating conditions for satellite systems and service providers. Clearly, the satellite industry’s ability to serve the region’s rural and enterprise markets has only begun to be realized.

David Hartshorn is secretary general of the Global VSAT Forum. He can be reached at 44 1727 884739 or [email protected] .