More musings on a latin t(r)ip

The most recent article here was both a round up of some recent news from Paraguay and a trip down memory lane. I reminisced fondly about an interesting tour of four South American countries which I enjoyed last year. In doing so, I mentioned in passing the two telecoms cooperatives I was able to visit in Bolivia.

COMTECO HQ, Cochabama Bolivia

As the Bolivia market report from telecoms industry watchers Buddecomm notes, the Andean country is one of South America's poorest and least developed. According to Buddecomm's figures, Bolivia has the continent's lowest mobile penetration and second lowest fixed line teledensity. With regard to the former measure, data from the the World Cellular Information Service supports this claim. WCIS indicates that the country's mobile penetration stood at just 60.08% as of the end of September this year. Most other countries in South America's less affluent northern region show much higher numbers, for example:

• Venezuela - 105.98%
• Ecuador - 91.35%
  
• Colombia - 83.75%

In the more prosperous Conosur region, the numbers tend to be higher still, for example:

• Uruguay - 117.10%
  
• Argentina - 115.97%
• Chile - 98.33%
  

Certainly, Bolivia seemed to be a visibly less affluent country than others I have been able to visit in the region. Although I did spend one night in the capital, La Paz, in order to make an early flight on to Caracas (via Lima), my meetings were elsewhere. The cities I visited were Santa Cruz and Cochabamba. The former city is Bolivia's most populous and is at the heart of the country's economic activity. The latter city is Bolivia's third largest settlement, set in an Andean valley, with a magnificent backdrop of mountain peaks.

As described in the most recent post here, the purpose of my tour around South America was to drum up support for the Americas Com conference and exhibition, the success of which it was one of my tasks to contribute towards until last year. In the other countries I visited, it was sufficient to spend time just in their capital cities, travelling between meetings by taxi. This would not have worked in Bolivia, where in the wireline space, at least, the telecommunications market is highly fragmented.

In Bolivia, a national incumbent fixed line operator - Entel - does exist. This was renationalised by the left wing administration of President Evo Morales just weeks after we visited the company's Santa Cruz office. My understanding, however, is that the majority of the country's PSTN subscriptions are with the numerous cooperatives. We felt it could be useful to visit some of these. In Santa Cruz, we were received at the offices of COTAS (Cooperativa de Telecomunicaciones Santa Cruz). In Cochabamba, we visited the headquarters of COMTECO (Cooperativa de Telecomunicaciones Cochabamba).

Entel offices, Santa Cruz, Bolivia

As with the visit to Paraguay's COPACO described in the most recent previous article here, conversations with the representatives of these cooperatives (about how they might contribute to our conference) were strikingly unlike those we had at the offices of private sector telcos elsewhere in South America. Again, the themes to which our contacts warmed most readily were around bridging the digital divide and extending the availability of affordable basic services to poorer and more remotely located users.

While none of these cooperatives have constructed mobile networks, COTAS is able to compete in the cellular space. Bolivia is a rare case of a South American country in which even one MVNOs is in existence - and that MVNO is the mobile offering of COTAS, hosted by Nuevatel (which operates under the Viva brand), an MNO once owned by John Stanton's Western Wireless.

Nuevatel HQ, Santa Cruz, Bolivia

That COTAS is able to operate as an MVNO is not due to any particular encouragement on the part of the Bolivian telecoms regulator. A 2006 report from Diamond Consultants asked whether conditions, at that time, were right for the emergence of MVNOs in India. I'll admit that I haven't yet read this report very carefully, but perhaps it's safe to guess the answer might have been 'no'. After all, as recently as March this year, DevelopingTelecomsWatch was reporting on continued regulatory wrangles which looked set to delay the market entry of MVNOs in India. As part of its discussion, the Diamond Consultants report makes remarks about the state of play for MVNOs in some other markets around the world. Bolivia is observed to be a market in which the regulator has discouraged MVNOs, with policies "primarily driven by the low penetration of mobile services and the low geographic reach of the network." It is further argued that "low ARPUs meant that the discount MVNO model was not viable" The regulator's stance is described as seeing "brand and data service-oriented MVNOs... encroaching on the already limited capacity" Rather than encourage MVNOs to emerge, the report observes, the Bolivian regulator "stepped in and provided incentives to mobile network operators to improve capacity and coverage". Despite this, COTAS Movil was launched in mid-2002 to complement the cooperative's existing portfolio of fixed voice, ADSL and cable TV services.

The report puts Argentina in the same category as Bolivia - markets in which the entry of MVNOs is discouraged by regulatory agencies. Despite this, MVNO services have been launched there. As with Bolivia, this has been done by telecoms cooperatives.

Now, according to TeleGeography, a federation of telecoms coops, Fecosur, is planning to expand the reach of these mobile services, expecting to extend coverage to around 150 cities and municipalities across the country within four or five months. According to the federation’s president, Antonio Roncoroni, the service is already provided in 14 cities throughout the country under the 'Nuestro' banner. Fecosur and another body, Fecotel, jointly represent around 300 telecoms cooperatives across the country.

Having mused here more than once in the past about Latin America's cooperatives and about telcos renationalised by left-of-centre governments - and about how these organisations appear to operate a little differently from those for whom shareholder value is a key consideration - it will be interesting to observe whether this new mobile offering will have any very significant impact on the Argentinean market.

Others who finds the telecoms coops of Latin America at all interesting might like to look over a scholarly paper (dated 2005) from the The Journal of Community Informatics which I found recently and which rounds up the history of the Argentinean cooperatives quite nicely.

As the English winter draws in, thoughts of sunny days touring Latin America's telcos in the balmy days of April 2008 are quite attractive. Hence these musings today.

More musings on a latin t(r)ip

Memories of Paraguay

In April 2008, your humble scribe had the very great pleasure of visiting four South American countries on behalf of events and business information company Informa Telecoms & Media. The purpose of the trip was to drum up additional support for the Americas Com conference and exhibition, held annually, and usually attracting a few hundred telecoms sector execs from around the Western Hemisphere.

While exhibitors, sponsors, delegates and supporting industry associations seemed to be broadly happy, it was beyond dispute that assembling a crowd which really represented the majority of the countries to the south of the USA was a challenging task. Various venues had been tried over the years - and each time, the location had a significant bearing on the size and diversity of the crowd. Mexican venues made for a group of participants drawn largely from that country, from the Caribbean islands and from some Central American markets. To host the event in Buenos Aires was to ensure that the group would consist largely of Argentineans and others from the Conosur region, the most prosperous segment of the South American continent. In both of these scenarios, delegates from the less affluent Andean countries would be rather more thin on the ground.

South America's largest and most populous country by far is, of course, Brazil. Iterations of Americas Com held in that country's most amazingly attractive conference location, Rio de Janeiro, did very well in terms of delegate numbers. Brazilian delegates - who quite rarely seemed inclined to travel in good numbers to venues outside their home country - were so numerous in Rio that a particular difficulty arose, however.

It was perfectly possible to lure a decent contingent of influential delegates from Spanish speaking countries to a conference and exhibition in Rio. For exhibitors and sponsors, however, picking them out from among the massively larger group of Brazilians could be challenging. It was tough, then, to create the perception of having assembled a genuinely multinational delegate audience.

It was with this in mind, and with the 2008 version of Americas Com scheduled once again for Rio, that a two-man delegation set out in April that year for meetings with a varied group of telecoms operators around South America. The week-long tour took in Venezuela, Bolivia, Paraguay and Argentina. Only the last of these had ever really been a source of significant numbers of senior delegates prepared to travel to our event when it was held outside their own country.

For someone who whose previous trips to South America had all been to Brazil, I found this to be a fascinating opportunity. In many ways, it felt as if the only thing these four very different countries have in common is that the official language is Spanish. Walking the streets and having meetings in Buenos Aires struck me as being a very similar experience to what one might expect in a southern European country - Spain, Portugal or perhaps Italy. Venezuela and Bolivia were strikingly different places - the people, the climate, the infrastructure: a different world.

Paraguay was, to me at least, the really unknown quantity - a country of which I knew very little aside from recollecting the name of its erstwhile dictator, Alfredo Stroessner and a those of a couple of its notable footballers, Messrs. Santa Cruz and Chilavert.

My colleague (translator/interpreter/fixer) and I did the rounds of the mobile operator HQ buildings in Asuncion. These varied a bit in terms of how expensively they were decorated, but the offices were not vastly different in arrangement or atmosphere to ones you might visit almost anywhere in the world. We were, however, on the way to airport, to visit an HQ which looked and felt rather different.

Vox HQ, Asuncion, Paraguay

On our travels around the seemingly quite sleepy Paraguayan capital, it became clear that the local telecoms scene was a close-knit community. Having already been shown around town by a helpful local driver who seemed to know personally everyone with whom we had a scheduled meeting, we had a nice piece of luck on our visit to one of the MNOs. The gentleman with whom we met was able to open doors at one of the organisations where we did not have an appointment fixed up. This introduction, then, led to a meeting with the Gerente Comercial of COPACO (Corporación Paraguaya de Comunicaciones), the state-owned incumbent wireline operator.

Informa's Americas region event had only recently expanded its remit from a gathering purely of GSM mobile operators. Part of our task was to increase the diversity of the audience not only in terms of countries represented but also in terms of aiming for a much broader range of telecoms businesses attending the show - fixed/mobile; state sector/private sector; involving delegates from the cable sector.

So it was wonderful to have the opportunity to visit companies in these target segments and something of an eye-opener to have conversations with the leaders of public sector operators (we also visited CANTV in Venezuela) and telecoms cooperatives, of which we managed to visit two in Bolivia.

What was novel for us was discussing the proposed themes of presentations these companies might offer at our event and hearing of topics quite different from the ones we had heard discussed by private sector GSM operators in previous iterations of the conference.

COPACO HQ, Asuncion.

COPACO, which we managed to visit just ahead of our flight to the next stop on the tour, was no exception. Our host, who was exceptionally generous with him time, was most animated when talking about how his organisation was striving to extend the availability of services to under-connected settlements. During this conversation, I couldn't help being struck by how this gentleman's language varied from what I was used to hearing at such meetings and at conferences. I don't recall hearing the terms 'EBITDA', 'shareholder value', 'market share', 'ARPU' or their Spanish equivalents during our chat. Our surroundings, too, were different. COPACO HQ lacked expensively designed marketing materials and branding. We entered through a hall in which customers could make payments. The scene there, to me at least, was somewhat reminiscent of a local government office in the UK - but before our local authorities were made to organise their activities along more commercial lines.

With this memorable discussion in mind, then, it was interesting for me to learn this week, via TeleGeography, that Millicom Cellular International-owned Tigo Paraguay has been awarded a contract to deploy mobile services in four under-served departments of the country, helping CONATEL, the national telecoms regulatory agency, achieve its universal service targets. Under the deal, Tigo will roll out networks to 35 municipalities where cellular services are currently unavailable and the Government will provide funding of around USD1.04 million to support the network deployment. In total, according to the TeleGeography item, the project is expected to cost around USD1.6 million and benefit around 20,000 Paraguayans in remote areas. The private sector, then, has a role to play in meeting some of the challenges discussed by my host on our visit to COPACO HQ last year.

COPACO itself, meanwhile, continues to harbour ambitions of entering the mobile services market. At present, according to the World Cellular Information Service, that market (the mobile penetration rate of which is 85.45%) is split as follows:

• Tigo Paraguay, 53.45% share
• Personal Paraguay, 32.55%
• Claro Paraguay, 8.56%
• Vox, 5.45%

According to a recent TeleGeography story, COPACO expects to join this list by mid-2010. With my visit to the company's HQ in mind, I'll be interested to see how their mobile offering fares in competition with the existing cellcos.

Memories of Paraguay

Ecuador's struggling CDMA MNO set to be rescued by a strategic partner?

Back in late January, I wrote (on my former blog, since handed over to a former colleague) about how Ecuador's struggling state-owned CDMA mobile operator Alegro PCS was the subject of reported offers for prospective strategic partnerships from Uruguay's Antel, and Venezuela's Movilnet, both of which are also owned by the Governments of their respective countries. I noted then that these offers both came from countries which, like Ecuador, have left-of-centre governments. This prompted me to mull over the subject of the possible telecoms sector links between politically sympathetic Latin American countries which I'd learned something about on my own travels in that part of the world. It's a topic I personally find quite interesting, so I took the opportunity to expand on this theme here in March.

Today, thanks to TeleGeography, I received an update on the news item which set this train of thought in motion - the state of play at the ailing Ecuadorean cellco. In January, I'd reported news that Alegro PCS was said to be 60 to 90 days away from reaching an agreement with a foreign strategic investment partner. This has clearly taken a bit longer than anticipated to play out. Today's news from TeleGeography suggests that the cellco is now still "approximately two months away from reaching an agreement" with a partner. The article does not clarify which company this partner is likely to be, simply repeating the ones mentioned at the start of the year, which included Telekomunikasi Indonesia (Telkom) as well as the Venezuelan and Uruguayan parties. The fact that this back on the news wires, however, might suggest that some progress is being made.

If a deal of this sort is not reached, it looks as though the Ecuadorean Government will force the sale of Alegro PCS, according to the country's President, as quoted in the TeleGeograpy article, which also notes that the CDMA operator has had to delay a plan to roll out GSM infrastructure due to a lack of capital and is instead currently using wholesale GSM capacity from larger rival Movistar Ecuador. This move has yet to make a significant impact on the operator's feeble market share. When I first visited this story in January, Alegro PCS had just 1.31% of the country's mobile subscriptions according to December 2008 figures from WCIS. That figure had improved only very slightly to 1.34% by March this year.

With high reported debts and such a tiny share of the market in a country of just 14 million people, I wonder how attractive Alegro PCS is going to look to any prospective buyer if a sale does become necessary in the view of the Government. The toughness of the competitive environment is compounded by the fact that in addition to Telefónica-backed Movistar, the Ecuadorean market is home to an MNO which is part of the powerful América Móvil group, a venture of Mexican multi-billonaire Carlos Slim Helú. It gets worse. The country's 87.15% mobile penetration rate does not leave boundless room for growth, even for the two powerhouse-backed operators currently splitting the bulk of the market between them.

So it remains to be seen what the future holds for struggling Alegro PCS. I can't decide if rescue from a telco owned by the state agencies of some politically sympathetic government will ensure the long term survival of the MNO or just delay, at some cost to the friendly partner, the eventual demise of a company caught between the vastly superior resources of two powerful competitors. I'll have to have a look some time to see if there's a precedent anywhere else in Latin America for a cello successfully competing with both of the region's two dominant telecoms groups in a relatively small market. It sounds like a tough position to be in.

Ecuador's struggling CDMA MNO set to be rescued by a strategic partner?

Nokia's cheapest emerging markets phone vs. El Vergatario

Emerging markets winner? The Nokia 2720 Fold - picture from Cellular News

Just when I'd finally recovered from the side-splitting hilarity of discussing the (allegedly) saucily-named low-cost cellphone recently launched in Venezuela, along came another emerging markets handsets story to remind me of the fun.

The (nudge, wink) Vergatario will cost the man and woman on the streets of Caracas a mere USD15. It's recently been reported in the press that this represents only 25% of the cost of manufacturing and distributing the device. According to the country's state news agency, there is "a long-term project to export phones from Venezuela to the rest of Latin America". It will be interesting to see whether the Chavez Government would be interested in subsidising cheap phones for the masses beyond the borders of their Bolivarian Republic. Last year, I had the opportunity to visit the HQ of Venezuela's renationalised national incumbent wireline operator, CANTV. I learned a little about the company's (and the Government's) desire to use ICT/telecoms as a driver of Bolivarian socialism - but not enough to speculate with any degree of confidence about whether this could include underwriting the cost of handsets in markets where CANTV's mobile unit, Movilnet, would not have the opportunity to recoup the subsidies during the subscription lifecycle of the customer. I suppose it's theoretically possible that an arrangement could be worked out with friendly operators elsewhere in Latin America, or even elsewhere in the world.

Let's assume for a moment that something of that sort does not turn out to be feasible. With which handsets would a non-subsidised El Vergatario be competing on the global low cost devices market?

One suite of such handsets has been launched recently by Nokia, according to a Cellular News item I received today. The Finnish device maker says the new phones are aimed at emerging markets and come preloaded with a range of Nokia's mobile internet services. The Nokia 2730 classic, Nokia 2720 fold and Nokia 7020 each come Internet-ready, and work with Nokia's range of emerging markets services.

The article quotes Nokia's Alex Lambeek, who says "we've seen mobile technologies catalyze the growth of the informal sector across the world, empowering local entrepreneurs and having an immediate and lasting impact on people's lives. Services like Nokia Life Tools and Ovi Mail, combined with the mobile phones we're launching today, bring powerful solutions that can be the gateway to knowledge, entertainment and people, without the need for a PC."

According to extensive Nokia consumer research, states the article, nearly 50% of consumers in emerging markets would indeed rather connect to the Internet over a mobile phone than a PC.

An interesting component of Nokia's service bundle is Ovi Mail, "which has the potential to be the first digital identity for many people in emerging markets" Unlike most other email services, the Cellular News article reminds us, "an Ovi Mail account can be created and used directly on a Nokia device without ever having to use a PC." The article indicates that since the launch of the beta service in December 2008, around 90% of Ovi Mail accounts have been created on a Nokia phone rather than a PC.

How do these devices stack up price-wise against the Venezuelan phone?

The most affordable of the set of three is the Nokia 2720 Fold, a compact clamshell handset expected to begin shipping in Q3 2009 for an estimated retail price of EUR 55 (USD74) before subsidies and taxes. By my maths, El Vergatario comes in at around USD60 when not subsidised by the Venezuelan state, so it does look competitively priced vs. a comparable device from Nokia. The Venezuelan handset, however, is a CDMA standard device. Presumably a GSM version would need to be on offer if the Chavez Government really does mean to export the phone.

Nokia's cheapest emerging markets phone vs. El Vergatario

Salty name, sweet subsidies: more on the Venezuelan handset phenomenon

Recently, when I quickly added a short piece here about the low cost handsets launched this month in Venezuela, it seems I left out some interesting details.

The detail that has been grabbing headlines across the UK's mainstream news media is the name given to the device, El Vergatario. Prior to reading these recent stories, I vaguely remembered the name of the phone and even more vaguely recalled reading somewhere that the term meant something like 'the excellent one'. (That's enough vagueness, Ed.*)

So imagine my bemusement at seeing UK newspapers rubbishing the idea that the monicker of this remarkably cheap device is so innocent. Numerous Fleet Street hacks have converged this week on a different understanding of the handset's unusual name, i.e. that it is a freshly coined vulgarism from a Venezuelan city known for its inventive slang. On Monday, the Guardian, to take one example, delighted in presenting President Hugo Chavez as a smirking practitioner of double entendre. "Whoever doesn't have a Vergatario is nothing," said the Venezuelan leader, with the Guardian suggesting that this remark was an off-colour joke.

Word quickly travelled back to Caracas about the Guardian's story. Yesterday the paper was reporting that President Chavez had used a televised speech to rebut the notion that some Venezuelans had been offended by the handset's name:

"In the Guardian they think it's something rude. That is a big mistake. They are ignorant," said Chavez. "He cited the Spanish language reference dictionary, the Real Academia Española, which defined vergatario as an adjective signifying quality and value," reports the UK paper, whose backtracking is slyly qualified by its assertion that "the etymological debate spread to websites today and broke largely along political lines, with Chavez supporters championing the non-vulgar interpretation."

Whatever the case, in the following clip from the President's regular TV show, he does seem to be playing for laughs. My Spanish is far too limited to understand the gags. If anyone wants to post a translation of his words in the comments box, do please go ahead!

All very amusing. Less impactful in terms of making the news, but perhaps of more immediate relevance for readers of this blog (i.e. people working in telecoms in emerging markets) is the question of how Vetelca (the Venezuelan state-ZTE joint venture assembling the phones) is able to put a fully-featured device into the hands of the consumer for just USD15. I daresay the price of the Chinese-made components is not excessive. Good old handset subsidies, however, perhaps play an even more important role in arriving at the low retail price of the phone. As the original Guardian article on the device noted, "a government subsidy which cut the retail price to a quarter of the manufacturing cost is likely to make the Vergatario an immediate hit."

It might therefore be more apt to call El Vergatario a low price handset than to call it a low cost handset.

-------------------------------------
* apologies to Private Eye

Salty name, sweet subsidies: more on the Venezuelan handset phenomenon

Chavez unveils super low-cost mobile phone

In early March, I seemed to amuse a couple of regular visitors to this blog with my jocularly-titled discussion of the telecoms sector of a selection of countries with left-of-centre regimes.

One stop on that tour was Venezuela, whose state-owned cellco Movilnet was set to launch a low-cost mobile phone on the local market.

The launch date for this handset is coming up soon. Very soon. Tomorrow, in fact, according to a recent TelecomPaper article. So you'd better get yourself to Caracas sharpish if you fancy one.

Unveiled (see pic) by Hugo Chavez himself, the new C366 El Vergatario is the first mobile phone to be built on Venezuelan soil. Produced in partnership with ZTE of China, the phone will feature MP3 playback, FM radio, and a camera.

Chavez unveils super low-cost mobile phone

Adventures in telecoms socialism

In January, writing an article for the Com World Series blog, I discussed the links apparently being formed across Latin America by state-owned telecoms operators from countries with left-of-centre governments. The starting point was the news that Venezuelan incumbent telco CANTV was considering a strategic partnership with Ecuador's beleagured CDMA MNO Alegro PCS. I mentioned my own enjoyable trip to Caracas in April 2008, during which I had the opportunity to visit CANTV HQ. The operator had been renationalised by President Hugo Chávez in 2007. The external affairs representative whom I met was keen to tell me about how the organisation was looking to develop partnerships with telcos in politically sympathetic states such as Cuba and Nicaragua.

At that point, I was only aware of Latin America as an arena in which state-owned telecoms service providers from countries with left-leaning governments might look specifically to markets run by political fellow travellers for new opportunities.

Last month, however, I learned from a brief Global Mobile Daily report that Vietnamese operator Viettel, owned by the nation's military, has selected Huawei and Ericsson to provide equipment for expanding its networks overseas into North Korea, Cuba, and Venezuela. The report notes that the operator has yet to enter any of these markets, and states that, according to Viettel Deputy Director Tran Phuoc Minh, discussions are planned with telecoms authorities in each country.

This is just the latest move in an international expansion strategy with which Viettel has already made progress. Last month, Viettel's subsidiary in Cambodia, using the Metfone brand, officially launched mobile services. The unit is said to have over 1000 base stations supported by a 5000km fibre-optic network linking all provinces in Cambodia. The new operation reportedly attracted 500,000 subscribers in its first three months of trial services. A Saigon Times article on the operator's foray into neighbouring Cambodia indicates that the new cellco will target low-income subscribers with a wide range of low-priced services and packages. Viettel Deputy General Director Nguyen Manh Hung is quoted as saying that this approach is not only about customer acquisition but is also intended to "contribute to society".

Viettel, the article states, also announced the provision of free Internet services for nearly 1000 Cambodian schools within the next five years. Rural rollout seems to be high on the Metfone agenda, with the operating planning to "extend its coverage to Cambodia’s remote villages and islands."

Meanwhile in Venezuela, CANTV's mobile arm Movilnet is set to launch a low-cost mobile phone on the local market. A Telecompaper report this Thursday states that the device, dubbed 'El Vergatario' is the first mobile handset produced in the country. According to Movilnet President Jacqueline Faria the device will be the cheapest available in Venezuela. To be launched for Mother's Day in May, the CDMA phone will be available for VEF 30 (USD 13.95). El Vergatario will be produced at the Venezuelan Telecommunications Factory (Vetelca), a joint stock company, in which the Venezuelan state holds an 85% stake, with the remaining 15% owned by ZTE. The article suggests that Vetelca hopes to sell around 600,000 Vergatarios this year.

Movilnet's subscribers seem to be a remarkably loyal bunch and the country's mobile market overall is one in which the three competitors' share of the subscriber base has remained largely unchanged for some time. Movilnet's competitors have not remained complacent. Movistar Venezuela has been steadily migrating customers from a legacy CDMA to a newer GSM network since March 2007 and has more recently launched W-CDMA services. Digitel, owned by Venezuelan businessman Oswaldo Cisneros, is also working to roll out 3G services in two stages, starting this month, according to local news portal Ciberespacio. The operator currently offers Huawei USB modems and by mid-2009 will integrate voice and data services.

OK, comrades. That's all I have on telecom-socialism for now.

Adventures in telecoms socialism

Views from MWC: WiMAX to gain traction in emerging markets?

I recently discussed here the relative merits of and prospects for 3.5G mobile and WiMAX networks in India. A number of news items emanating from this week's Mobile World Congress prompt me to widen the discussion out to the question of how much traction WiMAX backers can expect the technology to gain in emerging markets worldwide.

The first of these items comes courtesy of the telecoms.com, whose correspondent caught up with Wei Yuan, Senior Director of Global Marketing for ZTE in Barcelona. "We anticipate a boom in WiMAX take-up for fixed applications in emerging markets this year," says Wei Yuan, who believes that Russia, the CIS, the Middle East and Africa hold out the best prospects for WiMAX growth for the Chinese telecommunications equipment and network solutions firm.

In terms of serving mobile operators, Wei Yuan believes the '4G' market share will be 80/20 in LTE's favour, but feels that the WiMAX opportunity is still a sizeable one, especially in light of recent announcements by Alcatel-Lucent and troubled Nortel that they are no longer focusing on WiMAX mobility. The article adds weight to this last point, noting that ZTE's WiMAX momentum is highlighted by In-Stat, a market research firm whose recent report states that out of the 94 new WiMAX 16e commercial networks deployed last year, ZTE had 15 of them or 16% of all the networks established worldwide. This apparently sets the Chinese company among the top two WiMAX equipment vendors in 2008. According to the telecoms.com article, the report goes on to say that with ZTE's industry-proven WiMAX terminal solutions and a significant number of commercial WiMAX networks the company is planning to install in the years to come, "there is a high probability that the company can assume the number one spot as WiMAX equipment vendor worldwide."

Just before the Congress, Sean Maloney, Chief Sales and Marketing Officer of Intel provided an update on recent WiMAX developments, a summary of which you can read at WiMAX.com. "WiMAX is a global story," said Maloney. "The technology is real, here today and has a 2-3 year advantage over other competing technologies."

What stood out for me was Maloney insisting that big deployments in the most highly developed markets are only part of the WiMAX picture. "Too much focus has been placed on developments in the US and Clearwire," said Maloney. "This is a global story; to understand how it is doing you must take a global perspective. From the very beginning, we wanted to have a global, ultra-fast, low-cost wireless internet solution that would help bridge the digital divide and last mile."

Maloney flagged up some of the more notable deployments, including Scartel and Comstar launching services in Russia with up to 10Mbs performance. For Intel, Moscow and St. Petersburg have leapfrogged 3G services to 4G. In the case of the Russian capital, I wonder how damaging this will be for the country's three leading mobile operators MTS, Vimplecom and MegaFon, which have all rolled out 3G services in major cities except Moscow. There have been long delays with the the Russian military freeing up UMTS frequencies and I have discussed here in previous posts the argument that this frustrating 3G launch delay in the country's most lucrative market has created a window of opportunity for the likes of Scartel and Comstar. In the case of the latter, however, it is worth mentioning that the Comstar-UTS group, a leading provider of integrated telecommunication solutions in Moscow and other cities, is controlled by Sistema, which is also the parent company of mobile market leader MTS.

Scartel, says the WiMAX.com article, plans services in over 40 Russian cities and launched the world's first GSM/WiMAX phone with HTC. This has not remained the sole GSM/WiMAX device on the market for very long. WiMAX.com reported on Tuesday this week that Quantum Telecom had unveiled at the Mobile World Congress in its first Ultra Low Cost GSM-WiMAX handset. I assume this is aimed primarily at emerging markets.

Other emerging markets and middle income countries which have seen WiMAX deployments include:

• Pakistan, where Wateen Telecom has launched the largest WiMAX network in the world covering 26 cities with plans to grow to over 70 cities; mobile operator Mobilink also launched WiMAX services in August 2008.
• Venezuela, where MobileMax has deployed WiMAX in Caracas in June 2008 with up to 20K users
• Brazil, where Embratel, part of Telmex, is operating a WiMAX network covering over 20 cities

It will be interesting to see which emerging markets are home to further WiMAX deployments. I know less about developments in Africa and SE Asia, but Intel and ZTE certainly seem to be vocal, powerful backers of WiMAX as a useful option for service providers in developing countries.

Views from MWC: WiMAX to gain traction in emerging markets?