The 2006 3G CDMA Latin America Regional Conference held on May 24 and 25 in San Pablo, Brazil showed the improvements of the business model for the 450 MHz band, and above all, it was echo of one of the two main pieces of news that could grant another dimension to this service in Latin America: the following green light for the service in Mexico, and a new plebiscite in Brazil, the two main countries among countries of the region.

In the event, the private services superintendent of the Agencia Nacional de Telecomunicaciones from Brazil (ANATEL), Jarbas José Valente, admitted the possibility of having the body studying such frequencies allocation, through a new plebiscite to be held in September. So far, Valente’s position and in general, ANATEL’s, were directly rejected. The officer himself has declared, in an interview in the Brazilian magazine Teletime, in April, that the 450 MHz band is “very used” in Brazil and he was wandering if it was worth changing the frequency of the current users. There, Valente has also posed that a new cost-benefit study should be necessary, as the one carried out by the Superintendence of Radio Frequencies and Inspection (SRF, in Spanish) of ANATEL during the plebiscite that established the 400 MHz band for the Multimedia Communications Services (SCM, in Spanish) and the SME. In Brazil, who gets the license is that one that has to pay for the band “cleaning” and it is officially assessed that this would be very expensive.

However, the situation would not be so complicated, according to the consultant’s, Luiz Claudio Rosa, reasoning, specialist in this service. The 450 MHz band is occupied in Brazil mainly for the communication use in airports and for radio taxis. But, there are only 30 towns with airports in the country, and radio taxis operate in the big cities, not in the low density towns to which the CDMA 450 model is aimed.

During the panel dealing with the problem in the CDMA Latin American Conference, Ricardo López Sánchez, president of the Asociación Brasileña de Pequeños Proveedores de Internet (ABRAPPIT), emphatically requested the opening of this band so as to provide services in rural areas of the interior of the country. Like other hundreds ISPs operating in rural areas, Sánchez has a smaller ISP in the town of San Carlos, in the interior of the state of San Pablo. So far, its only choice is the 2.4 GHz free band, that cannot offer service quality.

According to Sánchez, ANATEL’s current management overlooks the agro-industry importance responsible for Brazil’s 33% GDP. He posed as example of this oblivion, EMBRAPA’s cattle unit, also in San Carlos, where 30 researchers work and that until not so long ago, it was connected by a 64 Kbps satellite access in spite of being located at only three kilometres from the Universidad Federal de San Carlos (UFSCar) that has a 100 Mbps access of the Red Nacional de Pesquisa (RNP).

What is paradoxical is that Brazil was the first Latin American country where a CDMA 450 trial was carried out, so as to provide universal service in low density areas. Massato Takakuwa, Lucent’s business development manager showed again in San Pablo’s panel the results of that “trial” carried out with a BTS in Santa María, a town located 20 kilometers to the south of Brasilia. Such experience, that is more than two years old, and that will be used again as starting point for the discussion, showed a scope for the voice services of 60 kilometers away from the base, and a possibility of transmitting data to 45 kilometers with peaks of 824 Kpbs, with external antenna and 384 Kbps with indoor equipment.

In the same panel, Carlos Killian, IA 450 Chairman for Latin America, the group of operators and manufacturers promoting CDMA communications in this band, revealed that the Comisión Federal de Telecomunicaciones (COFETEL), the Mexican regulating entity, had informed him that the steps so as to authorize those frequencies in Mexico are advanced. According to the rumors being heard among the infrastructure providers present in the conference, Telmex is furnishing a great deployment, which would be the greatest CDMA 450 plan in the region.

So far, the most important initiative is that of the State company CVG Telecom, from Venezuela, but the greatest governmental impulse is that of Argentina, where there are some 20 frequencies licenses for other operators from small towns from the country. Some of them, as the tourist towns of El Calafate, El Chalten and Villa Gesell, have already mounted equipment. The auditor of the Comisión Nacional de Comunicaciones (CNC) from Argentina, Ceferino Namuncurá, showed in San Pablo these improvements and that of CDMA 450 handsets Argentine factory, Redcotel, a company mounted by the cooperatives of telephony services that will provide the service in different areas of Argentina, as well.

Anyway, the region’s pioneer operator has been the Peruvian Valtron, that is about to commercially inaugurate its network in the Andean town of Huarochiri. Valtron’s president, the charismatic Rudy Valdivia, encouraged the participants of San Pablo’s event with the social and anthropological philosophy of his project – that tries to recover through digital ways, the roads of the old Inca Empire- and that has already showed in the first CDMA 450 Latin America Conference held in November 2005, in Buenos Aires.

On the other hand, Killian pointed out again in San Pablo,  that the spectrum’s efficiency and the reuse of the CDMA frequency added to the spread power of the 450 MHz band – a cell in 450 MHz covers the same as 13 of 1,900 MHZ and three of 850 MHz-, make them ideal due to their low deployment cost to provide services in Latin American suburban and rural areas. Besides Argentina and Peru, that chose the sub-band A, the most recommended due to its scale, and Ecuador, that authorizes band F, the only one it had available, and besides Venezuela’s project, in Bolivia, the regulating entity, Sittel was authorized to bid 450 MHz frequencies in 140 towns, in Honduras they are cleaning the band and in Belize there is also a technical project of the BTL company.

In the “3G and its universal access applications” panel, Jouji Hirai, Huawei’s mobile director, who remarked that there are more than 50 available handsets in the market, at prices that he considered “accessible” although the potential operators complain about the lack of activity of the subscriber handsets providers. Hirai posed Tibet’s case, where in 2003, when CDMA 450 started to be deployed; the telephony penetration was of 5% in the rural area and 95% in the urban areas. In the first three months of 2004 10,000 subscribers were acquired per month with an ARPU of US$ 10 higher than that of China Unicom CDMA, but reducing the Capex and the Opex 90%, which turned the Tibetan operation very profitable. That is why, Hirai defined CDMA 450 as “a great universal access business”.