Steve Hawley completes his round-up of IPTV progress in the Americas with a look at developments in Brazil, Argentina, Chile, Mexico, Colombia and Venezuela, and concludes that IPTV interest is vendor-driven today

Largest economies

In terms of overall gross domestic product, the largest economies are Brazil, Mexico, Argentina, Colombia, Chile and Venezuela. In terms of GDP per capita, it’s Mexico, Chile, Venezuela, Uruguay, Brazil and Argentina. Although DSL does exist in Latin America, its penetration lags behind the rest of the Americas. Fibre-to-the-home is almost non-existent other than in tourist areas.

Governments in Brazil, Mexico, Argentina and Venezuela do not allow that telephone carriers offer video. Hence, the ‘triple-play’ in these countries is more likely to consist of voice, broadband Internet access and mobile telephony. Countries where regulation does allow telco video include most of Central America, the Andean countries and most of the countries in the Caribbean. Not that there’s a great threat to the telcos: MSOs (Multiple Systems Operators - or large cable companies) have weak broadband penetration in most Latin American cable markets due to economic difficulties in much of the region.

In addition to its robust economy, Chile is said to have the most advanced telecommunications system in Latin America. Accordingly, broadband penetration is high there: about 35 per cent. And government regulators do allow MSOs and telcos to sell like services, including video, in each others’ markets.

In Chile, cable operators have begun selling voice over cable, which has stimulated Telefonica de Chile, owner of CTC, the largest fixed line and ISP operator in the country (and yes, the same Telefonica that’s in Spain and elsewhere in Europe), to get involved in video. Several years ago, network vendor Huawei presented an IPTV system based upon Minerva Networks middleware to the Telefonica Sur (not part of Telefonica de Chile), which had been actively pursuing proposals at the time. We hear that IPTV vendors selling in Chile have reported receiving renewed inquiries from Telefonica Sur.

In Mexico, Cablevision has a 500,000 subscriber TV deployment based upon Microsoft middleware, but it is a cable TV deployment using the Microsoft TV Foundation Edition, not the IPTV Edition. Telmex is another carrier doing lab trials but has no video deployed. Small wonder, since at the end of 2005, Mexico had but 1.6 million DSL lines and more than half of them were added during that year.

Broadband access In Brazil, 12 to 14 per cent of the population have broadband access, according to estimates. Telebras, the national incumbent carrier, was broken up in 1998 and local-loop unbundling became mandatory in 2002. But despite these moves toward open competition, the government still does not permit telcos to offer video services, nor can Brazilian MSOs like Globo Cabo or TVA compete against telcos by offering voice services. Despite these obstacles, several telcos are trying to stir the pot in order to get the Brazilian government to deregulate video. Hopes for any type of resolution in 2006 are low, however, given the fact that it is an election year. A run-down of Brazilian carriers starts with Embratel. The former national incumbent, post break-up, is the largest carrier in the country. It does provide video services but they are via satellite.

Brasil Telecom

Brasil Telecom is Brazil’s second largest telco and second largest broadband carrier in Latin America. Given the restrictions on video, but having an installed base of 11 million fixed lines and 2.2m mobile telephone customers, Brasil Telecom has placed a priority upon fixedmobile convergence, and has entered trials in hopes that it will give them a bundling edge and reduce churn. Mobile churn is a major concern in Brazil, given the number of GSM subscribers. Brasil Telecom launched Turbo Video VOD in 2004, providing Spanish and Portuguese language sports, music and lifestyle programming via its broadband Internet service. According to Point-Topic, Brasil Telecom has about 900,000 ADSL lines in service.

Microsoft bid? Microsoft has reportedly submitted an unsolicited bid, which has sparked enough IPTV interest at the carrier that it launched an RFP to multiple vendors. Telemar, a private Brazilian carrier serving about three quarters of a million subscribers, reportedly has big IPTV plans and has been conducting lab tests using middleware, DSL network equipment and set-top boxes from UT Starcom. There have yet to be any field-based pilot tests, nor have any vendors received major videorelated contracts. Telefonica de Brasil (aka Telesp) passed the million DSL line mark in 2005 and was the first Telefonica subsidiary to launch an RFP for IPTV. They awarded a small trial to Lucent Technologies which has progressed slowly. In Colombia, Emcali, one of several major telcos in the country, is planning to modernise its existing network in order to accommodate Voice over IP. That carrier issued an initial RFP that included IPTV as an add-on application, but sources contend that IPTV is likely to be the last item on the agenda, with no fixed deployment dates. In December 2005, Emcali awarded a softswitch-based next generation network contract to ZTE, whose press release states that the network is capable of an IPTV service. Other Colombian carriers with IPTV activities underway include ETB (Bogota), EPM and Telecom Colombia, all of which have been carefully studying IPTV technologies and are now expected to launch requests for information or RFPs in the near future. Last year, EPM of Medellin began conducting an IPTV lab trial, which has reportedly not yet concluded.

Venezuela RFP In Venezuela, CANTV has been studying IPTV technology by actively attending conferences, visiting IPTV carriers that have already launched their services, by issuing RFIs (Requests for Information), conducting lab tests and visiting vendors. Finally, in early 2006, the carrier launched a formal RFP. It is expected to make its infrastructure choices and enter trials during the second and third quarters of 2006 and begin to deploy in 2007 or beyond. Alcatel is the primary network supplier and, as a result, outside observers believe that Microsoft may be one of the bidders, in competition with all the other major IPTV middleware suppliers - all of which are looking for a first foothold in the Latin American market. Interestingly, CANTV does not have a broadcast license. Despite its size, Argentina has yet to be a major target for IPTV. This is mainly due to regulation, although also it is still suffering from earlier economic woes. Notwithstanding, Telecom Argentina, which is owned by Telecom Italia, recently launched a solicitation process and several of the major IPTV middleware suppliers presented their solution. An RFP has yet to be issued.

Future potential

As readers may gather by the sketches of IPTV in many of these countries, technology vendors have great expectations of Latin America. Many of them reason that the low percentage penetration of broadband in Latin America equates to a large potential for the future. Siemens just announced an investment in a set-top box software development centre in Brazil, which may be both an artifact of Siemens’ global operations and also because Siemens sees potential in South America. And because there are also an estimated 80 million GSM mobile users in Brazil (and therefore, a large number of competitors), video-capable handset vendors like Samsung have made daring claims that mobile video will be the dominant form of video there in years to come. In the end analysis, with the exception of Chile, most of the IPTV activity in Latin America has been confined to technology testing and carriers are doing it in order to put pressure on regulators to permit this service. It’s most likely that the kind of IPTV take-off we’re seeing in Europe, the US and Asia will not occur for a few years there. Steven Hawley is an independent industry analyst, researcher and consultant, serving the telecom and digital media industries through his consulting practice, Advanced Media Strategies. steve@tvstrategies.com

Mexico world #2 for broadband growth MarketResearch.com issued a number of reports covering Latin America last year, one of which put broadband market growth in the region at 87 per cent during 2004. In Mexico, Internet users are growing by around 20pc a year and ADSL subscribers grew 200pc in 2004, putting the country second worldwide for broadband growth. ADSL lines in Chile are increasing around 108pc a year and overtook cable modems in 2004.