Telefonica Moviles reaffirms GSM commitment
latintrade.com
01/13/2003 - Source: BNamericas
The Mexican subsidiary of Spanish mobile holding Telefonica Moviles (NYSE: TEM) plans to deploy a nationwide GSM/GPRS network, starting this year, even though the 2002 acquisition of Mexican operator Pegaso PCS means that it already operates a CDMA network, company spokespersons confirmed for BNamericas. A Telefonica Moviles spokesperson told BNamericas from Madrid that the company revealed the decision in a November conference call with analysts. Other executives at Telefonica Moviles and the Mexican unit of CDMA chipset developer Qualcomm have given similar confirmations to BNamericas in personal interviews. A source from Telefonica Moviles Mexico also confirmed the company's election to go with GSM technology. "Our technological bet is GSM, like our biggest competitor [Telcel]," he said, adding that they expect to announce a GSM deployment strategy at some point this year.
The move toward GSM will not lead to Telefonica phasing out Pegaso's CDMA network, the source said. "There is no decision to get rid of our CDMA network. We are going to keep it [because] we have the spectrum to sustain [multiple networks]," he said. However, he would not confirm that the selection of GSM/GPRS for TEM Mexico's technology migration path would preclude the deployment of a parallel CDMA2000 network. TEM Mexico's commitment to a GSM network remains under scrutiny, perhaps because the company has yet to release a statement on the matter. A forceful migration towards GSM/GPRS would be "highly unlikely and unwise", independent consultant Jose Otero told BNamericas. "It doesn't matter that GSM has economies of scale. Building a national GSM/GPRS network when you have an operating CDMA one is expensive and doesn't make any economic sense," Otero said. Otero also noted that CDMA2000 has been proven to be more efficient than GPRS when it comes to providing data-centric applications. Adopting CDMA2000 would let TEM better compete against Telcel for high-end and corporate clients, he said. Rather than jumping over to GSM, Otero said TEM Mexico would be better off adopting CDMA2000 as an evolutionary step toward W-CDMA. By doing so TEM would still arrive at its eventual objective of having a global presence under the same technological platform, he noted. TEM Mexico reported 2.25 million customers at the end of September 2002, making it the country's second-largest mobile operator after Telcel. In addition to the nationwide PCS license it acquired from Pegaso, the company has spectrum licenses in northern Mexico. |
