& cplSiteName &

FTTH in Latin America – Really?

Carolyn Mathas
4/18/2014
50%
50%

A recent industry report claims that competition among triple- and quadruple-play providers is driving the adoption of fixed-line broadband services in Latin America, and recommends that service providers should provide both connectivity and content services.

I have no beef with the general conclusions drawn by Ignacio Perrone, senior consultant at Frost & Sullivan Information & Communication Technologies, but I think that drive for adoption is more like a slow crawl.

The numbers presented by Perrone look promising. In 2013, revenues for the Latin American fixed-line broadband services market were $11.75 billion, and, according to Perrone, they are set to reach $18.40 billion in 2018. The study encompasses DSL, cable broadband, fixed wireless, and fiber-to-the–home (FTTH), the latter being the most promising in the growth figures.

But why hasn't this grown faster and earlier? One reason cited is cost. Licenses for concessions, network deployment, marketing, sales, and international connectivity take a big bite out of profitability.

When I read the recommendations in the report that traditional telecom companies must become sole service providers by providing both connectivity and content services, I couldn't agree more. However, based on my experience of having lived recently in both Costa Rica and Chile, I also think that income per capita and the lack of customer service are going to hamper any such developments.

Given the average income in most of these countries, how fast could this adoption be? Here's a rundown of monthly minimum wage (2010) in US$ in Central and South American countries:

  • Argentina, $457
  • Bolivia, $110
  • Brazil, $300
  • Columbia, $261
  • Costa Rica, $388
  • Ecuador, $254
  • El Salvador, $81
  • Guatemala, $186
  • Honduras, $279
  • Nicaragua, $133
  • Panama, $371
  • Paraguay, $192
  • Peru, $200
  • Uruguay, $294
  • Venezuela, $303

I'll concede that these figures are out of date. Let's say, for argument's sake, that in the past three years, these figures have doubled. In Costa Rica, I paid $75 per month in 2013 for a very good Internet service, which I needed to be able to work. In Chile, for the same level reliable service in 2014, the cost is pretty much the same, although in both countries, it's possible to find basic service in the $25 to $40 per month range. Imagine what the price would be for an FTTH service. Therein lies most of the disconnect.

In addition to the percentage of income that these broadband services will eat up, there is a second challenge. So far, in my limited experience, customer service is not really understood as a concept in Latin America.

The company from which I purchase residential WiFi in Chile asks that I deposit the amount I owe monthly directly into its bank account -- at the bank. After many months I am still awaiting my first invoice, and I am hoping that I will be able to pay online. However, since I had to give them cash for the first month and the installation, I am not very hopeful. One of my friends moved into a high-rise apartment building with WiFi, and it took more than three weeks to be connected. Lead times for satellite service are eight weeks. And, by the way, my small town of 25,000 residents does have fiber installed -- it's just not being used yet.

I just don't see the huge demand, ability to pay, or infrastructure in place. Certainly, fixed broadband demand will no doubt explode in Latin America at some point, as the economies in the region are growing. Today, however, that explosion is pretty hard to spot.

— Carolyn Mathas, contributing editor, special to Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Yulot
50%
50%
Yulot,
User Rank: Moderator
4/21/2014 | 9:28:41 AM
Colombia FTTx
Colombia has a government sponsored FTTN initiative under deployment throughout the country, to give high speed access to all communities (even the really remote ones). The project started in 2012 and is being deployed and operated by Azteca Comunicaciones (from Mexican Grupo Salinas). So not quite TTH, but at least proper high speed, as opposed to dodgy connected internet.
briandnewby
50%
50%
briandnewby,
User Rank: Light Sabre
4/19/2014 | 8:28:00 AM
Re: barriers to adoption
It seems like another realistic barrier, at least in some of the countries, is that the governments aren't likely excited about end-users having better Internet access.  That would make "twitter bans," for instance, much harder.

 
nasimson
50%
50%
nasimson,
User Rank: Light Sabre
4/18/2014 | 9:51:03 AM
barriers to adoption
@ Carolyn Mathas:

You have shared some important insights from your first hand experience. I didnt know that the lead time for satellite service installation is 8 weeks !!! It seems that barriers to adoption are HUGE in Latin America.

 

> And, by the way, my small town of 25,000 residents does have fiber
> installed -- it's just not being used yet.


What do you mean by "not being used yet"?


Thanks in advance for explaining.
More Blogs from Column
As the industry looks to aggressively ramp up NFV efforts, it becomes critical for strong and interoperable industry standards to eliminate vendor lock-ins and create a marketplace for best-in-breed services.
Today's telcos and communication service providers are more vulnerable to large-scale DDoS attacks than ever.
But this story will take years to write.
A few myths have emerged about microservices that need to be addressed, says Ciena's Abel Tong.
New and exciting methods of automation – whether virtualization, the cloud, IoT or even best practices like network segmentation – tend to emphasize innovation over visibility. As such, networks develop blind spots that mask network problems and even faulty devices.
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Viavi Explores the Latest Cable & Fiber Trends Within the CATV World

6|29|17   |     |   (0) comments


Viavi's Koji Okamoto discusses CATV technology and trends with Alan Breznick of Light Reading. From DOCSIS 3.1 deployment to the impact of Distributed Access Architectures (DAA), bringing fiber closer to the home, and leveraging DWDM technology for business services.
LRTV Interviews
Masergy: It's Time for SD-WAN Options

6|28|17   |   03:09   |   (0) comments


Paul Ruelas, director of network products for Masergy, explains how adding SD-WAN has changed the service mix for his company's customers. In some cases, the change is incremental, enabling more granular customer control. Masergy's newest version, SD-WAN Go, gives up some of those controls for a streamlined version targeting mid-sized customers with the most ...
Women in Comms Introduction Videos
Intel Ushers in the Revolutionary 5G Era

6|28|17   |   5:00   |   (1) comment


5G will bring job opportunities for women in telco and IT, as well as a whole new era of communications for consumers and industries of all kinds, says Caroline Chan, vice president and general manager of the 5G Infrastructure Division at Intel.
LRTV Custom TV
VeEX at ANGA COM

6|27|17   |     |   (0) comments


At ANGA COM 2017, Cyrille Morelle, president and CEO of VeEX, updates Alan Breznick with VeEX's new products and technology. This includes VeSion cloud-based platform for network monitoring, AT2500-3G advanced spectrum analyzer and MTTplus-900 WiFi Air Expert module. He also comments on DOCSIS 3.1 deployment and Remote PHY technology.
LRTV Custom TV
The Overall Objective Is to Win the Game

6|26|17   |     |   (0) comments


SCTE•ISBE's Chris Bastian discusses Energy 2020's success to date and the importance of a flexible approach that allows for changes in specific strategies in order to reach significant milestones.
LRTV Interviews
CenturyLink: Let's Get Past SD-WAN Hype

6|23|17   |   04:02   |   (0) comments


Technology becomes a "shiny object" unless it's properly focused on solving business needs for enterprise customers, says Bill Grubbs, network solutions architect for CenturyLink. He explains to Light Reading why SD-WAN deployments have to be tailored to specific needs – and more.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (1) comment


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Montcalm Marble Arch
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Does AT&T Deserve Time Warner?
Mari Silbey, Senior Editor, Cable/Video, 6/23/2017
Hulu Is Greatest Threat to Pay-TV Providers – Study
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 6/27/2017
Calix: Russo's Not-So-Overnight Success?
Carol Wilson, Editor-at-large, 6/28/2017
DT, Chinese Operators Take NB-IoT to Market
Iain Morris, News Editor, 6/26/2017
Brexit to Hit UK-Based Broadcasters – Report
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 6/23/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.