& 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I'll concede that these figures are out of date.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
WiFi is offering a challenge to the network-centric cellular status quo and that's something that mobile network operator CEOs recognize, believes Devicescape CEO Dave Fraser.
NFV can bring operational headaches as well as operational gains, argues Andy Huckridge.
5G is about so much more than just very high bandwidth and low latency – and SDN is going to play a key role in enabling 5G full potential, argues ONF Executive Director Dan Pitt.
To ensure the best possible customer experience, service providers must find ways to make more performance metrics available to users.
How cable operators can prepare to grasp the mobility opportunity.
From The Founder
Download our complete guide to de-risking NFV deployment in 2016, including:
  • An eight-step strategy to deploying NFV safely, based on input from the companies that have already started virtualizing their production networks.
  • Interviews with leading executives at Colt, AT&T, Deutsche Telekom, Cisco, Nokia, ZTE, Ericsson and Heavy Reading.
  • Flash Poll
    Live Streaming Video
    Prepping for the Future: Upskill U Explained
    During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
    LRTV Interviews
    AT&T Expert on the Key Pillars of UC

    4|29|16   |   03:58   |   (0) comments


    Vishy Gopalakrishnan, AVP of product marketing at AT&T, talks about the three developments that are making unified communications and collaboration secure and reliable for enterprise users.
    LRTV Documentaries
    LRTV Report: Mobile Core Innovation

    4|28|16   |   25:32   |   (0) comments


    Hear from multiple industry experts from Deutsche Telekom, SK Telecom, Heavy Reading, Huawei, Cisco, Ericsson, Nokia, NEC and many more about developments in the mobile core as operators virtualize their IMS and evolved packet core systems and prepare for a 5G world.
    LRTV Huawei Video Resource Center
    NFV World Congress Highlight

    4|26|16   |     |   (0) comments


    The highlight of the NFV World Congress contains exciting telecom news. Join us for an inside look at Huawei's ICT 2020 plan and its latest collaboration with industry leaders.
    LRTV Interviews
    Unified Comms Finds Its Voice

    4|25|16   |   03:44   |   (0) comments


    Peter Quinlan, VP of UCC Product Management at Tata Communications, talks about the evolution of the unified communications and collaboration services sector and how voice is now a big part of current developments.
    LRTV Documentaries
    So... What Do We Do Now?

    4|25|16   |   03:24   |   (0) comments


    After a long hiatus, Max Dingman, the CEO of a GeeGhiz, returns for a motivational board room pep talk.
    LRTV Documentaries
    NAB 2016 Highlights

    4|21|16   |     |   (0) comments


    Light Reading's Cable/Video Practice Leader Alan Breznick climbs down from the slots to tell us about the latest news in broadcast technology at NAB 2016 in Las Vegas.
    Between the CEOs
    CEO Chat: Deepfield's Craig Labovitz

    4|21|16   |     |   (0) comments


    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Shades of Ray
    Leading Lights 2016: Shortlists Announced

    4|20|16   |   0:53   |   (0) comments


    The judging is over and the Leading Lights 2016 shortlists have been published -- you can see who made the cut by clicking on this link.
    LRTV Custom TV
    Introducing MulteFire – Qualcomm at MWC 2016

    4|18|16   |   3.29   |   (0) comments


    MulteFire is the latest option for using LTE in unlicensed spectrum. As oppose to its close 'siblings', LAA and LTE-U, MulteFire operates solely in unlicensed spectrum, which enables it to offer the best of two worlds – LTE-like performance with WiFi-like deployment simplicity. In this interview, Sanjeev Athalye, Sr. Director, Product Management at Qualcomm ...
    Between the CEOs
    CEO Chat: Grant Van Rooyen of Cologix

    4|18|16   |     |   (0) comments


    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    LRTV Huawei Video Resource Center
    ONS 2016 – Demonstration of Huawei's NetMatrix Multi-Vendor SDN Orchestrator

    4|15|16   |     |   (0) comments


    This demonstration shows how Huawei's NetMatrix SDN Orchestrator (SDN-O) addresses an operator's core service agility needs for services spanning multi-domain, multivendor networks: it includes a demonstration of:
    - Rapid New Service Design: using YANG to model a complex example of multi-domain, multivendor L3VPN network connectivity service that ...
    LRTV Custom TV
    AT&T Wants to Own North Carolina

    4|15|16   |     |   (1) comment


    Venessa Harrison, president of North Carolina for AT&T, tells how the company will expand its GigaPower service beyond the seven N.C. cities it already serves.

  • This blog, sponsored by AT&T, is the second part of a ten-part series examining next-generation broadband technologies titled "Behind the Speeds."
  • Upcoming Live Events
    May 23, 2016, Austin, TX
    May 23, 2016, Austin Convention Center
    May 24-25, 2016, Austin Convention Center, Austin, TX
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    Ultra-Broadband Summit, Hong Kong
    Iain Morris, News Editor, 4/27/2016
    WiCipedia: Woman Cards & Bitch Switches
    Sarah Thomas, Director, Women in Comms, 4/29/2016
    FCC Poised to Re-Regulate Wholesale Access
    Carol Wilson, Editor-at-large, 4/28/2016
    Mitel Asks: What Time of Day Do You Shower?
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/25/2016
    GoT Fans Curse HBO (Not Right) Now
    Mari Silbey, Senior Editor, Cable/Video, 4/25/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Live Digital Audio

    Of all the tech companies in the Valley, Intel has made the most aggressive commitment to building a diverse and inclusive workplace culture. It's doing so by taking concrete, measurable steps, making a large financial investment and through a commitment to complete transparency about its progress. In this radio show, WiC Director Sarah Thomas will be joined by Shlomit Weiss, Intel's Vice President, Data Center Group, and General Manager of Networking Engineering, who will share with us why Intel is tackling this huge challenge, how and to what effect. She will also discuss her unique experiences leading development of Client SOC development in the past and today leading development of all of the chipmaker's silicon hardware for networking IPs and discrete devices and managing a team of 600 engineers across Israel, Europe and the US.