WiMAX stalls in Brazil

Jose Luiz Frauendorf, executive director at Neotec, talks to Ken Wieland about his frustration at the lack of WiMAX progress in Brazil in the 2.5GHz frequency band.

WiMAX at 2.5GHz is at a standstill in Brazil and Jose Luiz Frauendorf, executive director at Neotec, an organisation representing the country’s licensed MMDS (multichannel multipoint distribution service) operators, is far from satisfied.

“It’s frustrating that other countries in Latin America and around the world are moving ahead with WiMAX and Brazil, which is one of the testing pioneers of the technology, is not,” he says.

The lack of WIMAX progress in Brazil has also frustrated the WiMAX community at large-such is the potential size of the market-but it is particularly irksome to Frauendorf. Neotec was created in April 2001 to represent the interests of Brazil’s regional MMDS operators, which use the 2.5GHz frequency band. Using analog technology for video transmission at that time, which is inefficient and expensive, Brazil’s MMDS players wanted to pool their resources and research alternatives for more cost efficient and standardised digital video transmission systems that they could all use. By acting together, they aimed to exploit their greater purchasing power.

They also wanted to identify the best broadband wireless access (BWA) technology for fixed and portable VoIP and data services-to complement their pay-TV service-and so they turned to Frauendorf for help. Frauendorf was running his own consultancy company at the time after having worked as general director at TVA, Brazil’s largest MMDS operator. He then set up Neotec once he got the call from Brazil’s 2.5GHz licence holders to represent them on analog to digital conversion and BWA research. Neotec’s MMDS members have operations in 42 out of the 50 largest Brazilian cities and cover 15 million households across 250 municipalities.

They typically serve areas where it is not economically feasible to roll out fixed-line networks to deliver digital TV and broadband services. After undergoing numerous trials with different BWA technologies, Mobile WiMAX emerged as Neotec’s BWA system of choice as early as 2006, but the MMDS operators have been stopped by Anatel, the country’s regulator, from pushing ahead with commercial WiMAX deployment.

“I am sorry to say but we have a lot of enemies and very few allies, and the biggest enemy we have is 3G,” says Frauendorf. “After the 3G auction [December 2007], Anatel was afraid to let us start deploying WiMAX as it feared we might compete with 3G-and 3G companies have lobbied Anatel hard to postpone any WiMAX deployments.”

Before WiMAX can be deployed commercially in Brazil, Anatel has to certify the equipment. The regulator has yet to do so and Frauendorf argues vehemently there is no legal basis for the delay. And the result, adds Frauendorf, is that broadband progress is being stalled unnecessarily in a country that has a population of 190 million, one of the strongest economies in Latin America, yet still has fewer then ten million broadband connections.

“According to law in Brazil, MMDS is classed as a telecommunications service and the licensees are allowed to provide all services the technology permits in that spectrum, which includes pay-TV and broadband access on a fixed and portable basis,” continues Frauendorf. “There are a lot of people at Anatel, however, that like to think that MMDS is a pay-TV system only, but that is not correct. We are backed up by the constitution.”

And Frauendorf argues that any fears that Anatel might have that MMDS operators might start offering mobility services anytime soon are unfounded, not least because it wouldn’t make any economic sense for the MMDS operators to do so at this stage. “We’ve always said, and we keep saying, that mobility is not what we need now,” says Frauendorf. “Not only because we think 3G can provide all the mobility that is required at this stage, but adding mobility services to the Mobile WiMAX network would raise the cost of the spectrum as well as increase the cost of the infrastructure by perhaps as much as three or four time times than if [802.16e] were used for only fixed and portable services. We have been working since 2003 on business models and we know what is feasible in Brazil and what is not. We’re not crazy.”

In three to five years’ time, once the price of Mobile WIMAX equipment comes down, Frauendorf expects there will be a stronger economic argument for MMDS operators to roll out full mobility services across their licensed footprints. But even then, says Neotec’s executive director, it won’t compete directly with 3G. “We see WiMAX and 3G being complementary,” he says. The 3G community-and Anatel- overtly dispute this and Frauendorf acknowledges there is still some lobbying work for Neotec to do in order to convince the doubters. In the meantime, as Frauendorf continually emphasises, mobility is not on Neotec’s immediate agenda. “We have already proposed to Anatel that we will not be installing the mobility manager in the Mobile WiMAX network,” he says.

“We will also make sure that the user can only use the equipment in a given sector of the cell so the mobility would be very limited. If the user moved from one cell sector to another, the connection would drop and we wouldn’t allow them to connect again.” If the law in Brazil supports the MMDS licensees’ position on offering video and BWA services, and there are rock-solid assurances from Neotec that there won’t be any mobility services until at least three years’ time, why is Anatel still dithering on rubber-stamping Mobile WiMAX equipment? Frauendorf says it is the sheer strength of the 3G and LTE lobby groups that is making Anatel think twice about going ahead with WIMAX at 2.5GHz. “I think Anatel is using mobility as an excuse to postpone the certification of the equipment, because there is no regulatory reason why we can’t deploy WiMAX today,” he says. “There is a huge lobby from the LTE equipment manufacturers to postpone WiMAX because they know they are not ready yet. And once you start deploying WiMAX in this country, I don’t think LTE will find a place here, at least not in 2.5GHz and 3.5GHz.”

There is some WIMAX rollout in Brazil from 3.5GHz licences awarded in 2002, but Anatel is mulling over when to release more licensed spectrum in this band. The issue of mobility has again been a stumbling block and has caused repeated delays in 3.5GHz licensing, but Frauendorf points to an Anatel discrepancy in that Embratel, one of Brazil’s existing 3.5GHz licence holders in Brazil, has been allowed to upgrade its Fixed WiMAX network to Mobile WiMAX.

The first pay-TV service in Brazil began in 1990-TV Filme-and was joined the following year by Canal+, an MMDS operation in Sao Paulo, which later became TVA, part of the Abril Group, the largest media company in Brazil. (In October 2006 Spanish giant Telefonica purchased an undisclosed amount of shares in TVA.)

To develop triple-play services (TV, voice and high-speed internet access), the MMDS operators needed to have a ‘return path’ to enable interactive services and full BWA; MMDS operators were granted permission by Anatel to offer a return path for the first time in 2000.

One of the big questions facing the MMDS operators was how to offer BWA and video in the most efficient way. Since 2000 they have been using inefficient fixed LOS (line of sight) systems, DVT (digital video transmission) and the DOCSIS cable standard for transmitting data (including VoIP) on the downstream and the upstream.

To explore more efficient BWA systems, Neotec conducted technology trials with both TD-SCDMA and OFDM-based technologies in Belo Horizonte, Brazil’s third-largest city, in 2003. As a hilly and green city (foliage leads to high signal attenuation)

Belo Horizonte provided a challenging environment for the BWA technologies to be put through their paces. If a BWA system could perform well in Belo Horizonte, it could perform well in other cities in Brazil. The results were encouraging for ‘pre-WIMAX’ technology based on OFDM. “It was clear that OFDM was far superior than TD-SCDMA,” says Frauendorf. “The performance was excellent in terms of coverage and robustness.”

There were still a problem, however, as the spectral efficiency of the OFDM-based system at that time was too low, making the cost of investment prohibitively high. But Frauendorf, speaking about the Belo Horizonte trials at the WCA (Wireless Communications Association) conference in 2003, managed to attract the attention and involvement of Intel, which helped to spur WiMAX development and achieve the desired levels of spectral efficiency. “We’ve been involved with WiMAX from the beginning and from 2006 we have been trialling equipment in Sao Paulo from Samsung, Motorola and Nortel,” says Frauendorf. “And all the trials were official inasmuch as we received licences from Anatel to test the equipment. And after each trial we sent a full report to Anatel about the technology. It’s important to say this because nothing was going on behind the scenes.”

But while Neotec can claim some success in the analog-to-digital conversion process-the MMDS operators have installed between 600,000 and 700,000 digital set-top boxes- WIMAX is stuck until Anatel gives it the go-ahead. “There are three WiMAX base stations working at the moment in a pilot project in Sao Paulo,” says Frauendorf.

“The equipment is ready and even the contracts have been signed, but we can’t make any progress.” Frauendorf’s frustration is palpable. “We have always said that 2.5GHz is probably the only part of the spectrum that can accommodate video transmission and broadband wireless in the same spectrum.” he says. “Today we are transmitting 120 channels through MMDS, which is an equivalent TV package from the cable and satellite operators. From that point of view we are totally competitive, but we can’t offer a full BWA service.”

While Frauendorf sees nothing in Brazilian law that supports Anatel’s stance, he is looking to resolve the issue without going to court. “We don’t want to enter into a legal dispute,” he says. “We want to settle in a peaceful way.”