Terra, Telefónica¿s website and Internet access provider, makes the first moves to start struggling for the Wi-Fi market, so as to expand its business portfolio in Latin America. The company adds another bet to revert currency devaluation experienced in the regions it covers, situation that generated a negative accounting impact of € 67 million in the half.
Between January and June, Terra Lycos lost € 98 million, 58% up compared to the 1H 2002. Turnover reached € 321 million, similar to the same period last year. Internet access accounted for 40% of Terra global businesses, with sales for € 129 million in the 1H, followed by communications, websites, and contents (25%), and advertising and e-commerce (24%). Terra counts on 1.5 million Internet clients, 13% more than in mid- 2002.
Of the total subscribers, the firm counts on 477,000 ADSL accesses, while the rest are switched services. The company confirmed it will start serving Internet in Colombia before year-end, path to be followed in Argentina, too. Terra renders access in Spain, USA, Mexico, El Salvador, Guatemala, and Peru, as well as in Chile and Brazil, where it has announced launchings for Wi-Fi services.
In Brazil, Terra will offer broadband clients the possibility to use Vivo¿s wireless 2.5G networks to connect to the web. Currently, Terra eases Internet access through ADSL (Speedy, Velox, or Familia Turbo), cable modem (Vírtua or TVA), and mobile telephony (Vivo). To start with, the solution will be available in São Paulo.
Besides, Telefónica CTC launched Wi-Fi last week. However, it only offers the service to supplement that of ADSL clients. Different from known Wi-Fi apps, in this case, the service is for homes, i. e., an ADSL connection with wireless modems. Only next year, the firm will complete a series of pilot trials in the Airport in Santiago, and it plans to deploy “hotspots” in main commercial centers in the capital of the country. The firm is assessing whether to offer the service under the pre-paid modality.
CTC counts on over 80,000 ADSL connections in Chile, though they reach 100,000 if adding accesses re-sold by other providers. By the 1Q 2004, the firm expects to deploy some 6,000 Wi-Fi modems from the Taiwanese maker ZyXEL.
In Chile, Telsur and Entel offer wireless access for marginal areas and VTR is getting ready to come in the market. Wi-Fi expansion forced Rodrigo Torres, Network Development Manager in Telefónica CTC, to voice the possibility that the Government intervene in spectrum management for the service –currently free-, and conduct tenders.
Different concerns haunt Terra in Mexico, where the first measure as regards Wi-Fi competition was taken by the dominant Telmex, through its ISP Prodigy, offering the service in Sanborns shops (owned by Carlos Slim) in Mexico City, Guadalajara, Monterrey, Cancun, and Puerto Vallarta. In Mexico, Terra is getting ready to face Justice against Todito, that filed a case for Terra to halt pre-paid services. Todito has a license to offer pre-paid Internet (segment accounting for 50% of the dial-up connections) to 2007.