Telesp Celular, the cellular division of the telephone operating company for the state of Sao Paulo, Brazil, announced plans to install a digital network by December 1997 to eliminate capacity problems of its current analog network.
Telesp said it has not chosen which digital standard it intends to deploy, but it must comply with Brazil’s Ministry of Communications guidelines that require a Telebras S.A. operating company to adopt a digital standard that is compatible with the existing Advanced Mobile Phone Service technology used by Telebras operators. Telebras is Brazil’s monopoly telephone company, which owns 27 regional affiliates.
Telebras said Telesp’s choice of digital technology will serve as the standard for all cellular operators in its system. As a result, competition among cellular equipment suppliers may result in the cost per terminal of the contract to reach a low of $500, estimates the U.S. Department of Commerce in a market insight report.
Japan-based NEC Corp. is Telesp’s primary equipment vendor. In April, the cellular operator awarded Motorola Inc.’s Pan American Wireless Infrastructure division contracts to expand its analog network to cover more than 100 surrounding cities around Araraquara and Sao Jose do Rio Preto. Telesp has not chosen an equipment manufacturer for the digital network. L.M. Ericsson, NEC, Northern Telecom Ltd. and Plexsys International Corp. currently provide analog equipment to various carriers in Brazil.
The Brazilian government plans to offer several private cellular licenses in early 1997.
Telesp’s digital network should be operating by the time the competing private sector cellular carriers begin offering service.
Brazil already has 1.2 million cellular subscribers, making it the most prolific cellular market in Latin America. An annual growth rate of 70 percent is anticipated for both this year and in 1997. By the end of the decade, Brazilian customers are expected to account for nearly half of Latin America’s cellular subscriber base. As a result, handset manufacturers are clamoring to get a piece of the Brazilian market. Nokia Corp., Motorola and NEC have stepped up efforts in the country.
Telesp’s network will become the second digital network activated in Brazil. Sercomtel launched the first digital network in Londrina.
