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Nextel: winning both PTT and 3G broadband
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It can be challenging for telecom operators struggling to keep pace with fast growth in
Peru. This is one reason why the industry is moving to 3G to meet the growing
communication needs in this ancient cultural center and Nextel Peru is poised to tap
the vast potential of 3G and mobile broadband services.
Steeped in Incan tradition and set against the backdrop of the spectacular Andes, Peru
is a major South American tourist destination. With wide open spaces, big mountains
and modern metropolitan areas, it can be challenging for telecom operators struggling
to keep pace with fast growth. This is one reason why the industry is moving to 3G to
meet the growing communication needs in this ancient cultural center and Nextel Peru
is poised to tap the vast potential of 3G and mobile broadband services.
PTT: once a secret weapon
Nextel is a brand of NII Holdings and operates five subnets in Latin America. Nextel
Peru is the third largest mobile operator in Peru. Though its market share is not high,
Nextel Peru boasts the highest ARPU (an average of 30 USD in 2008) and the lowest
churn rate (an average of 1.8% in 2008) in the Peruvian mobile market. Their major
group service push to talk (PTT) also has helped boost the ARPU and reduce the
churn rate.
Nextel Peru' s PTT service is provided through the integrated digital enhanced
network (iDEN), featuring fast access and high service quality. If users like a certain
service, they can invite relatives and friends to join the group. Once these group users
have formed habits and patterns, they are less likely to be lured away by other
operators and separated from their groups, significantly reducing churn rates.
PTT service is especially suited for group communications among government
agencies and public utilities. These high-end subscribers have given Nextel Peru an
ARPU 25% higher than its rivals.
Urge to develop 3G services
The Latin American telecom market has seen explosive growth. Operators in Peru
have launched 3G services to entice subscribers and cater to the affluent tourist
market. Mobile operators like Claro and Movistar have rolled out 3G mobile
broadband services, attracting a large number of subscribers and allowing the
introduction of the highly successful iPhone.
In contrast, limited by iDEN technology, Nextel Peru found it hard to compete in
diversified multimedia data services and smart phones, since they could provide only
traditional voice service (bi-directional wireless intercommunication) and pure SMS
service. Nextel Peru initiated major strategic transformation in 2008.
First, Nextel Peru hoped to maintain its existing advantages in the PTT service,
especially its leading position in the public security and service areas. At the same
time they aimed to vigorously develop value-added services to enrich the service
experience. For example, the PTT service based on mobile networks was added with
feature services such as status presence (enabling one subscriber to know when
another is online) and point-to-multipoint group calls.
Second, for the tourist sector, Nextel Peru planned to develop mobile broadband
services to attract roaming subscribers who could bring a high ARPU and sharpen
their competitive edge.
Nextel Peru realized that it had to break through constraints of the original iDEN
network and quickly construct a 3G network. In 2008, with the support of telecom
regulator MTC, Nextel obtained an operating license for the 1900MHz band, and took
the subnet in Peru as the first stop in transforming the iDEN network into the 3G
network.
Future-oriented strategic planning
After being licensed the 1900MHz band, Nextel Peru conducted an analysis of the 3G
systems that would be conducive for better service development and have more
appeal to subscribers. After a comprehensive comparison of CDMA and WCDMA in
terms of terminals, marketing costs, and network evolution, Nextel Peru finally chose
WCDMA for the 3G network.
Constructing a new WCDMA network in an economical and effective mode was a big
challenge. At the onset of network construction, Nextel Peru explicitly pointed out
that this was a service-driven network, requiring each layer of the network to
accommodate the future needs of end users for high bandwidth and high rates. Nextel
Peru planned on it taking five years to construct a WCDMA network with a total of
over 600 sites covering every corner of the country. The first phase would cover the
capital city, Lima and the second and third largest cities in Peru.
After considering Huawei' s impressive track record for successful 3G
implementation, Nextel Peru chose Huawei as its partner for 3G network
construction.
Build end-to-end advantages
Though the traditional WCDMA network could provide high-speed mobile broadband
data services like HSPA, there was a blank spot for PTT applications. To
continuously provide high quality PTT services, meet the consumption habits of end
users, reduce the churn rate, and smoothly realize network transformation, Huawei
partnered with Qualcomm to develop a customized PTT over WCDMA solution. This
solution made it possible for PTT services to be laid over the WCDMA network,
enabling end users to enjoy 3G mobile broadband data services while using PTT
wireless service.
Nextel Peru and Huawei conducted a thorough analysis of the projected mobile
market in Peru for the next three years, and based on the forecast of subscriber scales
and business models, mapped out a detailed plan for each layer of the network.
Huawei' s end-to-end 3G solution for the entire network will not only help Nextel
Peru resolve the node complexity problem, but also simplify the interworking of
equipment from multiple vendors, and realize quick, low cost network construction.
The best service quality is ensured through an end-to-end QoS guarantee.
Huawei' s industry-leading 3G solution will significantly enhance Nextel Peru' s
network capacity. After the realization of VoIP over HSPA, network capacity will be
1.5 times higher than a traditional WCDMA network.
By adopting Huawei' s latest ATCA-based core network, Nextel Peru will gain even
higher capacity and reliability and realize a CAPEX reduction of at least 30%.
At the transport layer, Nextel Peru adopts the world' s first IP-based packet
microwave combined with the wireless PTN bearer network, which can realize IP
transport of the entire network and will help Nextel Peru to save an estimated 35% of
CAPEX and 25% of OPEX.
Representing the largest chunk of investment, wireless access is always at the core of
Nextel Peru' s network planning. Site leasing is extremely tough, especially in
densely-populated central business districts. By sufficiently utilizing the existing
network resources and based on the flexibility, small size, and easy installation of
Huawei' s distributed base stations, Nextel Peru constructs its WCDMA network at
the same sites of the existing iDEN network and effectively reduces construction
costs.
Nextel Peru also fully considers future evolution and protects their original
investment by choosing Huawei' s SingleRAN solution, which can help them
transform smoothly into the HSPA+ and LTE networks. At the core network side,
they only need to upgrade software to address the needs of IMS and future network
architecture.
Steven M. Shindler, Executive Chairman of NII Holdings was quite positive about the
future, "We' re deploying a 3G network in Peru as a way to offer higher speeds and
capability to our existing customers, maintaining our differentiation of Push to Talk
and creating a path for us to move eventually into some of the higher consumer
segments with a pre-paid offering, which could potentially as much as double our
target market in a place like Peru."
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