VTR plans to deploy WiMAX network for 2008

VTR plans to deploy WiMAX network for 2008

The Chilean cable operator VTR, a subsidiary of US-based Liberty Global, said last week that its WiMAX network will be ready by the middle of 2008, and the company will begin to market services. In March last year, VTR began testing WiMAX and awarded a contract to Motorola to supply 802.16e equipment.

Mauricio Ramos, VTR’s CEO, said that “WiMAX technology will allow us to provide telecommunication services in those places where we currently do not have service. It will allow us to potentially reach 3.4 million homes, which means that VTR will be able to have 80 percent coverage in the country.”

The company did not disclose exactly how much it would invest to deploy its WiMAX network. Ramos said that VTR’s total investment plan for 2008 is US$180 million, and according to Timothy Burke, VP Strategic Technology, at Liberty Global, “the WiMAX spend is a very small portion of our total spend.”

VTR is the largest provider of multi-channel television services, as well as high-speed Internet access, in Chile. WiMAX will allow VTR to compete more effectively in the market where they are already a leader with “triple-play” services. The Chilean market is highly competitive, with three main providers of telecommunications services: Entel, Telefonica Chile (Movistar) and America Movil. Chile also has the highest penetrations rates in Latin American for telecommunications and broadband.

However, VTR will focus its WiMAX network on the provision of data services, and not mobile voice services. The company said it might add voice services by acquiring a 3G license, which the government has said it will auction in the future.

According to a report in the Chilean newspaper El Mercurio, VTR must gain mobile voices services quickly to provide “quadruple-play” services. One of its biggest competitors, Telmex, has already launch fixed and mobile WiMAX services, and soon may add-on voice services though its sister company América Móvil, which has a 3G license.

Likewise, Entel has been building a WiMAX network for the last 16 months, with a focus on business subscribers and “nomadic” services. However Entel has indicated that it it may offer mobile WiMAX services later this year.

The incumbent fixed-line operator Telefónica de Chile, which owns the nationwide copper network, is also planning to offer WiMAX services, however it lacks the appropriate spectrum. The Chilean regulator Subtel said that it will auction more 3.5 GHz spectrum for WiMAX later this year, and Telefónica said it will participate in that auction. Telefónica is the largest provider of ADSL services, and the main competitor of VTR for residential broadband services.

Yet despite the competition, VTR remains well-placed to garner a significant share of the WiMAX market in Chile, especially if it bundles WiMAX with its cable services. Further growth for WiMAX at VTR may “eventually offer a complementary wireless data service,” said Burke, “and if the business cases work, offer a form of portability and possibly mobility.”