NEW YORK-Montreal-based Telesystem International Wireless Inc. has wandered far from its home
base and original paging strategy as it pursues emerging opportunities in developed and developing markets in Europe,
Latin America and Asia.
“We like to say that only crazy people never change their minds,” said Bruno
Ducharme, president and chief executive officer.
This spring, Telet S.A., one of the company’s Brazilian Time
Division Multiple Access Interim Standard-136 cellular properties, plans to launch commercial service in the Rio
Grande do Sul region.
This summer, London-based Dolphin Telecom plc, a wholly owned TIW subsidiary, expects
to begin offering enhanced specialized mobile radio services in the United Kingdom. The Dolphin ESMR service,
which is based on the open Trans European Trunked/Terrestrial Radio protocol, is poised to become the first
commercially available TETRA network in the world.
Dolphin also plans a TETRA ESMR rollout in France by the
end of this year.
In Romania, where a TIW subsidiary has been offering Global System for Mobile communications-
based cellular service since April 1997, the company plans to seek some of the personal communications services
licenses scheduled to become available during the next several months.
As of Dec. 31, the carrier owned a stake in
wireless licenses covering more than 515 million people, with more than 1.5 million subscribers. This includes 1.17
million cellular customers in Brazil, Romania, China and India; 202,000 SMR customers in Germany, the United
Kingdom, France, Spain, Portugal and Belgium; and 183,000 paging customers in Mexico and the
Netherlands.
“When we started the company in 1994, we had a game plan for paging, but it hasn’t worked
out,” Ducharme said.
TIW subsidiaries hold national paging licenses in Mexico, doing business as Digitel,
and in the Netherlands, doing business as Callmax. The company’s “February 1999 Update” report projects
“significant subscriber growth in the Mexican paging industry in coming years.” It also notes Telesystem
International Wireless appointed a new management team in the Netherlands to “refocus the marketing strategy
on business users.” While comfortable with the company’s Mexican and Dutch paging operations, Ducharme said
TIW executives determined as early as 1995 this sector of wireless wouldn’t “become a tool for future
growth.”
The company’s strategy is to diversify its international portfolio of mobile wireless investments
while, at the same time, clustering its properties in order to achieve organizational focus and consolidation value, he
said.
Based on how it gauges the potential return on investment of a given market, TIW will tailor its participation,
ranging from outright network ownership to various kinds of alliances and sponsorships, Ducharme added.
Brazil
ranks first in TIW’s basket of wireless services, accounting for 828,000 of the company’s 1.5 million total subscribers at
the end of last year.
The publicly traded company, whose founding shareholder is Telesystem Ltd., the largest
privately held telecommunications group in Canada, entered Brazil’s cellular market in 1997. Its subsidiary, Americel
S.A., a TDMA carrier, became the first non-governmental cellular operator in Brazil when it launched service in
December 1997 in the metropolitan area of Brasilia, the federal capital.
Last year, through its 49-percent stake in
Telpart Participacoes S.A., TIW acquired two of Brazil’s eight A-band Telebras spin-off cellular companies. Telemig
Celular Participacoes S.A. serves the state of Minas Gerais. Tele Norte Celular Participaoes S.A. has equity interests in
five wireless carriers whose service territories are in the northern states of Amazonas, Para, Maranhao, Amapa and
Roraima.
“Brazilians don’t have telephones and they like mobile phones. Cellular has been in existence for a
long time and uses off-the-shelf technology,” Ducharme said.
An ocean away, Europe is TIW’s second-largest
stronghold. Dolphin, its London-based subsidiary, is in charge of the parent company’s SMR operations in the United
Kingdom, France, Germany, Belgium, Spain and Portugal, and it is the largest SMR provider on the continent. TIW
sees a profitable future in serving the mobile work force of vertical business sectors, including telecom and
transportation.
With Dolphin’s ESMR launch in the United Kingdom later this year, Ducharme said he hopes TIW’s
pioneer role in TETRA deployment will be a worldwide trend setter. As an open standard, TETRA facilitates
competition among infrastructure and handset vendors, providing a cost-cutting advantage to carriers and their
customers.
TETRA also is a natural for facilitating companies’ use of Internet-enabled, just-in-time delivery of
customized goods and services, he added. It offers reliable and inexpensive two-way packet data transmission at the
rate of 28.8 kilobits per second, with the added benefit of permitting simultaneous use of the voice and data
channel.
Because ESMR offers a variety of services in a single device, including two-way messaging, Ducharme
said Dolphin’s initial strategy is to bring in new business users of digital dispatch and to migrate existing analog
customers to this service. “That said, it may well be that some time in the future we would (resell) other services,
like long distance, provided by other carriers,” he said.
TIW also has a small toehold and a wait-and-see
attitude in China and India, where it owns a stake in two small but profitable cellular carriers with a combined customer
base of 20,000: Hunan Huajia Telecommunication Engineering Co. Ltd., which offers service in Changsha, the
capital of the Chinese state of Hunan; and Oasis Cellular, which covers large cities in the Indian state of
Rajasthan.
“In the long run, there is a lot of growth potential as the price of handsets declines and the
addressable market increases, but [cellular] is not quite at the affordability threshold yet,” Ducharme said.
The
chief executive described the company’s strategy and philosophy for emerging markets this way: “Provided you
manage your entry and ongoing costs and you aren’t impatient, you can wait to see if the economics and regulatory
environment will change for the better.”
