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Wireless Broadband Access for Latin
America
Martha García-Murillo
Juan Rendon
ICT in Latin America
New York City April 14, 2008202 390-0885
Background
■ The wired infrastructure was under resourced,
poorly maintained and rarely upgraded.
Because of this, after liberalization, the fastest
and least expensive way of providing
connectivity to the region was through cellular
phones
Problem
■ The current wireless network will require
significant upgrades in order to support fast
data delivery.
■ If this is not done various segments of the Latin
America population will likely be on the wrong
side of the digital divide
Objective
■ To determine the patterns of wireless
broadband adoption in Latin America
■ Will it be done through 3G type cellular
networks or through WiFi type networks?
Theoretical Framewok
■ Adoption literature:
♦ Individuals that are more amenable to technology
and will tend to adopt technology much sooner than
those who have averse feelings toward innovations
(Rogers, 2003)
♦ Technology features (Adams, 1992 Davis, 1989;
Hendrickson, 1993)
♦ Patchwork Adoption (Garcia-Murillo 2003)
■ This framework considers socioeconomic,
cultural and technological factors
Patchwork Adoption
Socioeconomic: age
28 2531 32
6667
64 63
6 8 5 5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Brazil Chile Mexico Peru
Population ages 0-14 (% of total) Population ages 15-64 (% of total) Population ages 65 and above (% of total)
Socioeconomic: population
84 8876 73
0
20
40
60
80
100
120
Brazil Chile Mexico Peru
Urban population (% of total) Rural population (% of total population)
Socioeconomic: income
1 1 2 1
3 4 4 4
41394545
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Brazil 2004 Chile 2003 Mexico 2004 Peru 2003
Income share held by highest 10% Income share held by lowest 10% Income share held by lowest 20%
Cultural factors
0
20
40
60
80
100
120
140
160
School enrollment, primary (%
gross)
School enrollment, secondary (%
gross)
School enrollment, tertiary (%
gross)
Brazil Chile Mex ico Peru
Technological factors
0 100 200 300 400 500 600
Brazil
Chile
Mex ico
Peru
Mobile phone subscribers (per 1,000 people) Telephone mainlines (per 1,000 people)
Broadband: GSM/EDGE
■ Global System for Mobile communications (GSM) is a European standard that operates in the 900 MHz band.
■ Originally designed to offer voice, low-speed data (up to 9.6 kb/s) and short message services.
■ The Enhanced Data for GSM Evolution (EDGE) technology is an extension of the GSM/GPRS standard aimed at providing user data rates of up to 384 Kb/s.
Broadband: TDMA/EV-DO
■The IS-136 standard (NA-TDMA) 13-16 kb/s end user data rate.
■The IS-2000 standard (CDMA2000) The maximum user data rate is 144 kbps and is expected to reach 307 kbps in the future.
■CDMA2000 1xEV (Evolution) two phases: CDMA2000 1xEV-DO "Evolution, Data Only" and CDMA2000 1xEV-DV "Evolution, Data and Voice". The former supports downlink bit rates of up to 3.1 Mbps and uplink bit rates of up to 1.8 Mbps on a carrier dedicated to data traffic.
WiFi/WiMax
■ WiFi works in the 2.4GHz and 5GHz bands.
■ The 802.11b standard offer a theoretical
maximum rate of 11 Mbits/s and 802.11g
standards offers 54 Mbits/s. In both cases, the
range can be around 80-100 meters.
■ (WiMAX) is an IEEE 802.16 can reach up to
30 miles with a throughput of 72Mbits/s for the
whole cell.
Exploratory model
■ For this paper we used a modeling software
called iThink® modeling software to help us
determine the diffusion patterns of cellular
based technologies such as EDGE /EV-DO and
WiFi
Components
Model components
■ 3 G cellular adopters
♦ IF(Income >1200) and (WiFi Tech >20) THEN (
3G Adoption rate* Total market) ELSE 0
■ WiFi adopters
♦ IF(Income <1200) and (WiFi Tech <20) THEN (
WiFi Adoption rate* Total market) ELSE 0
■ 3G Technology
♦ 3G Price*.7+ 3G Quality*.3
■ WiFi Technology
♦ WiFi Price*.7+ WiFi Quality*.3
Model components
■ 3G Price
♦ It starts with the current price of $120 a month and declines
over a 36 month period to $95
■ WiFi Price
♦ It starts with the current price of $25 a month a declines over a
36 month period to $22
■ 3G quality
♦ It begins at a rate of 7 and increases to 8.7 over a 36 month
period
■ WiFi quality
♦ This is represented also through a graph that begins at a rate of
4 and increases to 7 over a 36 month period
Results
-
2
4
6
8
10
12
14
16
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35
months
millions
EVDO adoption3G Cellular WiFi
202 390-0885
Results
■ The more expensive cellular technology will evolve
but the market will be limited given the cost of
connection.
■ The simulation predicts that WiFi will have a greater
uptake mostly because of the lower price that it
exhibits.
■ Quality is less of an issue in young population
markets
Results
■ Companies offering 3G now target the business
segment alone for this broadband connectivity.
■ People can connect to the Internet through
WiFi in restaurants and cafés either for free or
at a lower rate than the cellular option.
Conclusions/Implications
■ Adoption is greatly affected by income
■ The adoption pattern mimics the patchwork
adoption framework
■ Regulation should take into consideration those
socioeconomic, cultural and educational factors
in their universality objectives.
■ Carriers should also take into consideration
those factors for business offering purposes
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