DirecTV Latin America CEO Unveils Transformative Broadband Strategy

[Satellite News 07-18-12] DirecTV Latin America (DTVLA) is looking to transform into a key regional broadband player, according to DTVLA CEO Bruce Churchill, who believes there is a strong opportunity for the company after Sky Brazil, in which it has an over 90 percent s stake, launched a 4G wireless network based on TD-LTE technology.

   “The state of broadband development in Latin America is in a much different place than it is in the United States today,” Churchill told Satellite News. “Broadband penetration in somewhere like Brazil and I am talking about penetration in the home, the penetration is around 30 percent in Brazil. Even then, the quality of the service is not high. When living in United States, you think of speeds from 10 Mbps to 100 Mbps. That is simply not available in Brazil. When people talk about broadband in Brazil, they are talking of speeds of around 512 Kbps. The speeds and the quality of the service is much lower, even if the company advertise services of up to 3 Mbps, you may only get half of that when you want to use it in the evening.”
   Churchill believes such a product is a natural complement to pay-TV. “The profile of people who subscribe to pay-TV are probably very similar to those who subscribe to broadband,” he said. “It is our plan to develop a service that actually delivers what we promise. So, it will be wireless to the home, and we will be selling speeds of 2 Mbps to 4 Mbps, at least initially. We will bundle it with our pay-TV product and at a slight discount, and we will see how that goes.”
   DTVLA has been one of the big success stories in recent years, as the regional operator continues to add huge amount of subscribers across its operations. The company added around three million subscribers across all of its platforms in Latin America in 2011.
   In terms of this wireless broadband service, the operator conducted a test that lasted about a year in Argentina, and is getting ready to ramp up its activities in Brazil. Churchill outlined the company’s plans for Brazil. “We have just launched in Brazil in January,” he said. “It is in its early days. We are just finishing out completing the network in that city. We have spectrum holdings that cover a little less than 20 percent of the GDP in Brazil. We would be looking to roll out this service in four to five more cities this year in Brazil. So, it is not an instantaneous nationwide rollout. It is something we will rollout over time. I think there is an overlap with the customers we have and the customers that could subscribe to broadband. It is more a function of our ability to get spectrum.”
   It will be interesting to see what impact satellite broadband could have in the region. With a number of Ka-band satellites such as ViaSat-1 (ViaSat) and Ka-Sat (Eutelsat) now launched, the focus is whether satellite broadband could carve a niche in markets such as Europe and North America.
   Satmex CEO Patricio Northland told Satellite News that he has no doubt that Ka-band will find a healthy place in the Latin American market.
   “If you observe the various business cities in the Latin American region, many of these urban centers are spread out in a large area of several miles radius which will create a huge opportunity for offering high speed internet directly to its end users versus the traditional ADSL or cable Internet services,” said Northland. “ I expect both retail and business customers to be willing to pay a slight premium over terrestrial Internet services when the product offerings give a much higher internet high speed over terrestrial networks There is no doubt in my mind that the prospects for Ka-band are tremendous in the region.”
   Churchill, however, believes Ka-band is much more expensive than wireless or fixed line broadband and limited in its ability to deliver comparable speeds. “I think Ka-band tends to be limited to those areas where there is no viable alternative,” he said. “Certainly, in the United States, there are very few areas like that left now. There are big parts of Latin America, where there won’t be terrestrial or wireless broadband anytime soon. The amount of people that could afford a relatively expensive broadband product is somewhat speculative. I think there is a place for it, but I don’t see it being a big solution here.”

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