Brasil Telecom, Telemar and Telefónica plan to launch video services via broadband by year-end. Brasil Telecom says IPTV is its highest priority today, and begins its pilot in Brasilia with 300 clients. By Branislav Pekic

"In the area where Brasil Telecom is active, 20 per cent of the population has a computer and more than 95 per cent have a TV set at home," he explained.

Brasilia launch

Brasil Telecom’s service will initially launch in Brasilia and later extend to other cities. Mr. Frasson admits that IPTV is currently BrT’s highest priority, saying that “Fixed telephony revenues are falling and operators need to diversify their business." Deals with content providers have yet to be announced. The plans of Telefónica, which operates in the State of São Paulo, are even more ambitious. Besides IPTV, the operator wants to launch a Pay TV satellite service - in a market dominated by Rupert Murdoch’s Sky Brasil. A Telefónica source confirmed to ipTV News Analyst that a request for a DTH license has already been submitted to Brazilian telecom regulator Anatel and a business plan is currently being prepared. On the IPTV front, Telefónica recently signed a global deal with Lucent, which is powering its Imagenio IPTV service in Spain. In Brazil, Telefónica is also testing modems, set-top boxes and access ports provided by China’s ZTE, but its technology commitments have not yet been made.

Telecoms leadership

The new projects are only the latest battle Telefónica is waging with Mexico’s Telmex for leadership of the telecommunications market in Latin America. The two groups are the biggest fixed and mobile telephony players in the region and continue to expand their businesses. Telemex controls telecom operator Embratel, which in turn has a significant shareholding in Net, Brazil’s biggest cable TV operator. Until now, the Spanish group had confined its investments to fixed and mobile telephony. For its part, Telemar is targeting the first quarter of 2007 for the launch of its IPTV service. "Thanks to IPTV, we will be able to offer all of the interactivity available on the Internet also on TV sets. The number of channels will be unlimited and the service will have innovative functions such as the possibility of pausing or skipping commercials", reveals Telemar’s head of new business, Alberto Blanco. Telemar is also said to be close to finalising its IPTV equipment selections. However, all of the operators face several obstacles to launch their IPTV services, including existing legislation and the difficulty of providing a high quality signal using the existing infrastructure. Anatel does not have a defined position on IPTV, while cable and satellite TV operators are putting pressure on the regulator in fear of losing their market, which has 4 million subscribers and has been growing slowly since 1999. “We have still not obtained a return on the investments we made,” says Sky Brasil president Ricardo Miranda, stressing the need for equal treatment of all players. The other barrier is technological: in order to offer a wide range of services and be competitive, IPTV needs ideal connection speeds of 15-20Mbps. However, the maximum that can be achieved today in Brazil is 8Mbps.

Cable response

Meanwhile, the competition is also waking up to the new technology. Cable operator Net has already launched a triple-play package in nine of the 44 cities in which it is active: São Paulo, Campinas, Santos, Rio de Janeiro, Porto Alegre, Curitiba, FlorianÛpolis, Belo Horizonte and BrasÌlia. Rival cabler TVA is also conducting IPTV tests, while Sky Brasil recently selected Nexperia and NextVision as partners for the launch of dual digital broadcast/IPTV services.