Alcatel-Lucent has long claimed that femtocells and metrocells can boost wireless networks, but this time, it seems that carriers are also betting on the technology. According to Osvaldo di Campli, Alcatel-Lucent’s president of the Caribbean and Latin American (CALA) region, three femtocell contracts have been signed in Brazil, Mexico and Venezuela. Di Campli said that there are ten metrocell trials across CALA, using both metrocell equipment for 3G and LTE, in Brazil, Colombia, Peru, Mexico and Uruguay.
Less than two months ago, the French company Alcatel-Lucent announced it had closed a deal with the Spanish group Telefónica to provide femtocells throughout Europe and South America. The telecom operators’ names for the recent Latin American contracts were not disclosed.
The use of these technologies might help carriers meet future growth demand for data usage and mobile lines. Alcatel-Lucent predicts that smartphone sales will jump from 31 million in 2011 to 85 million by 2014, while mobile connections are expected to rise to 785 million, LTE to 51 million and fixed broadband connections to 71 million—all by in 2014.
“The CALA economy is growing. We believe there will be about 400 million broadband connections, of which the major share will be mobile, boosted by the increase of 3G and LTE smartphones,” said di Campli during a press conference in São Paulo.
However, in Brazil both femtocell and metrocell adoption face challenges. Although the government is studying regulation changes, currently carriers have to pay equal taxes when deploying macrocells, metrocells or femtocells, which can hinder investment.
No cuts in CALA
Following the announcement that Alcatel-Lucent will cut 5,000 jobs after the company’s shares dropped dramatically, observers from CALA are wondering how these cuts will affect the region. “We will not make cuts here; on the contrary, over past couple of weeks we hired people,” said Jonio Foigel, the company’s president for Brazil and service leader for Latin America.
Alcatel-Lucent said the job cuts will save an extra U.S.$1.46 billion (€1.2 billion).
“The results were not what we expected. Macroeconomically, Europe is a difficult market, both for us and our clients. In North America, we grew less than expected, but in CALA, even in countries that are facing some difficulties, there is growth,” di Campli said.
He noted that Alcatel-Lucent’s CALA division has been posting growth over the past seven consecutive quarters, and the region presented double digit growth in second fiscal year quarter. As an example, di Campli pointed to contracts with Brazilian Oi, Telmex and CableVisión.
GlobeNet, Oi’s international subsidiary provider of submarine capacity, has tapped Alcatel-Lucent to extend the GlobeNet submarine cable system to Colombia, supporting the exploding demand for broadband services. It will be a 100 gigabit per second (100G) capable link. This 1,000 km extension will create a link with direct connectivity between Colombia and the United States, and between Colombia and Venezuela. Alcatel-Lucent is also OI’s IPTV provider.
A 100 gigabit link was also sold to Brazilians Embratel, GVT and Telefónica. “They aim to increase network capacity to prepare their infrastructure for the huge amount of data that will be transmitted,” said Foigel.
During the conference, executives also explained that Alcatel-Lucent will follow Brazilian rules, and they will manufacture LTE equipment locally. The company has already chosen a partner, which will be disclosed soon. When asked if the locally manufactured products will be exported to Latin American countries, di Campli answered that it depends on bilateral country agreements.
(The currency exchange rate at time of report: $1 USD = €0.817409)