Latin American fiber networks spin national growth web
PETER H. WERTHEIM and DAYSE ABRANTES
Fiber-optic network construction in Latin America resembles a giant spider web encircling almost every nation, with billions invested internally and from suppliers outside the hemisphere. Key fiber and telecommunications suppliers include Northern Telecom of Toronto, which has been active in the Caribbean since the mid-1960s, when it first sold telecommunications switching equipment to the state-owned telephone company in Jamaica. A major supplier for the Latin American region, with an 80% market share, Northern Telecom has provided 17 countries with fully digital telecommunications networks.
Another telecommunications firm active in the Caribbean region, Britain`s Cable & Wireless (C&W) Plc has invested more than $1 billion over the past five years and expects to invest another billion during the next five years. Major C&W projects include the Eastern Caribbean Fiber System (ecfs), a 1719-km link that connects 14 islands from the British West Indies to Trinidad and Tobago. The Cayman/Jamaica fiber system links those two islands with the ecfs, and commercial service is expected this month. The $28.3-million, 870-km venture is expected to handle 30,000 calls simultaneously and support international banking and financial services, medical imaging, cable TV and distance-learning.
Since 1994, C&W major efforts have included the provision of multi-office network capabilities for businesses in major Latin American urban centers. It began by acquiring Vitacom, a 10-year-old supplier of earth-station and digital-satellite equipment throughout Latin America, which provided the British company with a gateway to North and South America.
For example, Dupont S.A. of Mexico has been using Vitacom for telecommunications services since 1989. While the company still provides backup services via satellite links, voice, data and some video, Dupont is now using a fiber-optic network.
Another fiber-optic cable is being installed between Puerto Rico and the Dominican Republic as a joint venture of AT&T, Puerto Rico`s Telefonica Larga Distancia, and two Dominican companies,--GTE Codetel and Tricom. The $30-million cable build, dubbed Antillas One, spans 807 km and is expected to carry 15,000 calls simultaneously at 622 Mbits/sec, accord ing to Marina Stukart, deputy managing director of Southern Cone, AT&T Submarine Systems, based in Rio de Janeiro.
AT&T Submarine Systems is working on a project called Caribbean One, a ring network technology designed to lower expenses for connecting the Caribbean nations to worldwide markets and communications channels (see figure). It would be prohibitive for each nation to build its own independent system. This project includes adding undersea fiber-optic segments to create overlapping rings, so that traffic can be switched as needed from one direction to the other via switched or manual intervention. For countries that already have connectivity, these additional links will drive more traffic over the existing infrastructure.
In Brazil, Pirelli Cable, with a 50% share in the optical-fiber market in the country, plans to reinforce its position with the privatization of telephony services. Its subsidiary, Pirelli Cabos, is setting up a 41,000-fixed terminal network at Joinville, Santa Catarina state, and plans to secure the return through the selling of terminals made by the local telephone company, Telesc. Additionally, Pirelli has begun constructing an optical-fiber plant at Sorocaba, Sao Paulo state, expecting to increase its capacity to 600,000 km of fiber per year by the year 2000.
Don`t cry for Argentina
Last year, Telefonica de Argentina (southern operations) invested $1.2 billion in fiber-optic infrastructure improvements and plans to invest $1 billion in 1996. Network digitization has reached nearly 74%, up from 14% five years ago.
More than 7980 km of fiber-optic cables have been installed, and the carrier is concentrating on building up its subscriber base before its monopoly expires in 1997. With more than 3.1 million lines in service, Telefonica has nearly doubled its client list since privatization in November 1990. Telefonica de Argentina officials want a fully digitized network by 1997 and plan on investing an average of $800 million a year until 2000.
Telecom, an Argentinian company in the northern part of the country, has followed suit with massive investments to expand its network in northern Argentina. It has digitized more than 85% of the network and increased lines in service from 1.4 million in 1990 to nearly 2.6 million by the end of fiscal year 1995.
Chile reaps benefits
A leader in cable telephony, Chile is benefiting from direct overseas investment and local management skills. Local players Telefonica Internacional (tisa), VTR, Telefe and Video Cable Communications have invested several million dollars in fiber-optic networks and are all actively cabling large sectors of Santiago, Chile`s capital, building customer bases.
The Chilean phone network has been 100% digital since 1993, with carriers scrambling to install Synchronous Digital Hierarchy (SDH) fiber-optic networks from one end of Chile to the other. Hewster Servicios Intermedios (whose parent company is InterAmericas Communications Corp.) already operates a 100-km fiber network in Santiago, the country`s capital.
In June 1994, tisa took the lead in cable TV in Chile, when national operator Compania Telefonica de Chile (CTC), of which it owns 43.6%, purchased an 80% stake in Chilean holding company Intercom for $55 million.
Through this, tisa gets a stake in the Santiago metropolitan cable-TV operations of Intercom. With investments of approximately $140 million last year, Intercom began installing a hybrid fiber/coaxial-cable network with multimedia capabilities. The Multimedia Pilot project involves the wiring of 450,000 to 500,000 homes in the Santiago area alone, and the installation of 12,000 kilometers of bidirectional fiber-optic and coaxial cable throughout the country.
CTC also joined forces with Cordillera Communications Group, comprising Cristalerias de Chile and Bresnan International Partners to serve about 183,000 subscribers, mainly to provide local voice services. Cristalerias is jointly owned by U.S. cable operator Bresnan, and Tele-Communications Inc. (TCI), a partner in cable channels CNN and Discovery. CTC and TCI are also planning to expand their venture to Peru and Argentina.
CTC is the first carrier to install Asynchronous Transfer Mode (ATM) equipment, having initiated this strategy in June 1994 with the installation of two Alcatel 1000 AX ATM nodes that were principally used for local area network interconnection and data communications at the University of Chile.
The winner of the bid to install the Santiago ATM backbone network was Fore Systems, based in Pittsburgh, PA, and CTC chose Cisco to supply the routers. The project includes nine ATM switches and 32 routers at an investment of $6 million.
Chile`s network will include Northern Telecom`s Magellan broadband multimedia products, expected to be ready for service during the second half of this year. The links between the ATM switches are 155-Mbit/sec SDH fiber-optic links that were installed in the second half of 1995 as part of CTC`s overall plan to upgrade transmission capabilities.
Entel, the major long-distance carrier in Chile, which sold 16% of its stock to Italy`s Societa Finanziaria Telefonica per Azioni (Stet), has chosen Newbridge Networks Inc., Herndon, VA, to provide a $10 million nationwide commercial ATM network.
Telefonica Internacional of Spain, which owns Telefonica de Argentina, has high hopes for Peru`s next liberalization stage. In 1994, it purchased a controlling 35% stake for $2 billion in Telefonica del Peru, the monopoly carrier, when it was sold as two separate privatized companies.
In 1995, deployment of urban lines totaled 556,810, of which 539,239 were installed to fulfill market demand, 11,781 to substitute analog lines, while 5790 lines were transferred to other areas. Thus, of the total installed lines in 1995 (1,309,908), 77% were digital.
Also in 1995, 2675 km of fiber-optic cables were deployed, now totaling 3952 km. The installation of digital line equipment adds up to an equivalent capacity of 1,576,680 links. Digitization of national and international carriers via satellite links is 80%.
Panamericana de Television, parent of principal cable-TV operator Tele2000, is investing in high-capacity fiber networks for its own cellular networks and future liberalization. It competes against Telefonica del Peru`s cable-TV subsidiary, Cable Magico, which serves about 7000 subscribers in Lima and Calao.
Uruguay telephony high
Antel has already given Uruguay one of the highest levels of telephones per inhabitants in Latin America, as well as one of the highest digitization rates in the region.
Digitization, which started in 1987, today has reached 85%. The target is to reach 100% digitization by 1997, covering 965,000 installed telephone terminals-- compared to the 354,000 lines deployed in 1987. Two of the services in demand include DataExpress, point-to-point service of terrestrial digital lines for speeds to 2 Mbits/sec provided with a centralized intelligent supervision system from the carrier to the client; and DataMundi, the international extension of DataExpress, based on satellite links or through the Unisur fiber-optics cable inaugurated in 1994 (see Lightwave, August 1994, page 8).
Unisur--the result of an agreement between Uruguay, Argentina and Brazil--makes it possible for more than 20 telecommunications companies to improve their communication capacity and transmission quality.
Spurred on by the competition for long-distance and international service, Telecom de Colombia, the state-owned monopoly provider, plans to invest $190 million between 1995 and 1997 to develop a nationwide fiber-optic backbone over which to provide broadband applications.
Emtelco, a joint venture between regional operators Empresas Publicas de Medellin (EPM) and Empresas Municipales de Cali (EMC), plans to install a $10 million ATM network. Emtelco has selected Northern Telecom to install its ATM network between Medellin, Cali and Bogota. q
Peter H. Wertheim and Dayse Abrantes write from Rio de Janeiro, Brazil.
This is the second of two Lightwave articles on fiber optics developments in Latin America. The first article, in the September issue, page 18, focused on the International Telecommunication Union`s America`s Telecom Show in Rio de Janeiro.--Ed.