Velocom started investing to implement wireless access WiMax. The firm is to expand to the interior of the country following the network deployed by Silica Networks, company belonging to Datco, controlling Velocom since last year. The latter may be mounted on a pre-WiMax network that allows offering services in some areas in Capital Federal and in the city of Mar del Plata, the most important summer resort in the country. Actual investments may be around US$ 500,000, which will be used to deploy nodes that, the more users, the higher their number. Besides, the move will allow the firm to reorganize coverage by replacing WLL antennas with WiMax, which request no view line, and enable extra service reach.

In a second stage, the strategy includes replacing wireless transmitters in the interior of the country, following Silica’s network lines. The Argentine-capital firm has added a fiber-optics backbone connecting main Argentine cities with Santiago de Chile. With over 3,000 km of fiber, the network will allow offering better Internet access in the interior of the country.

Silica Networks was created in 2000 as the joint venture of the British National Grid (50%), the Chilean Manquehue Net (30.1%), and the US Williams Communications (18.9%), and arrived in Argentina with outlays for US$ 220 million. In 2002, the firm was sold to a group made up of the local management.

Datco¿s plans include supplementing fiber-optics networks with Velocom¿s wireless last mile to later start regional opening. Besides, the purchase will boost data transmission businesses with lower costs and a sound own backbone, integrated to trunking services of the former Winstar on 38 GHz, Datco already used to enhance reach in the country.

Velocom explained that though they have conducted trials with several technology vendors, they may decide for Alvarion to move on with WiMax, just as its competitor, Millicom Argentina.

“Investing in and adopting WiMax, to reach clients with greater bandwidth, in hand with Silica Networks¿ high-capacity interconnection and carrier networks, will allow Velocom to develop new networks, nearing better broadband service options in cities where clients are still captive under the dominant operator without choice”, said Mariano Poli, General Manager of Velocom.

Amid this network expansion process, Velocom provides services in Capital Federal and the Metro area of Buenos Aires, Rosario, San Luis, Bahia Blanca and Mar del Plata, and will continue adding new cities in the interior of the country, under the novel model of partnerships with local operators. In 2003, Velocom entered an alliance with MetroRed and Silica to develop networks in the interior of the country. However, the merger failed to render the expected proceeds as Silica lacked the necessary resources to expand fiber to regions where new opportunities were spotted. Now, Datco, controlling two of the three firms (MetroRed was left to Telmex hands) will try to repeat the formula. Therefore, the firm forecast 2005 telecom turnover to grow 15% for over the US$ 4.2 million booked in 2004.