The provision of high-speed Internet access should be one of the first alternatives offered to the consumer. Then come various services such as home banking, telephony and video over the Internet Protocol (IP), and Video on Demand.
The companies have already invested $2 billion in the country. "It is not yet possible to calculate the market potential for multiservice in Brazil. In the U.S., Internet penetration is 7% of the subscriber base," observes Álvaro Pacheco Jr., CEO of General Instrument of Brazil.
GI, which had a turnover of US$75 million in 1997 from its Brazilian subsidiary and some $2 billion worldwide, is bringing to the local market six models of cable modem, type MCNS, "whose advantage is an open pattern capable of communicating with products of any manufacturer, so that the operator avoids the purchase and installation of the cable modem, because the user goes to do it in a store, "says Pacheco Jr.
The new retail models, as is already the case in the U.S., have an estimated price of $250. GI does not maintain stocks in Brazil, but estimates that its delivery times will revolve around 30 days, as the cable modems will be brought from factories in Mexico.
Broadband betting
"We are offering the CleverCast PC, a smart cable modem board. Abroad, its cost is about US$300 for the final consumer," says André Luís Altieri, sales manager at Philips of Brazil. For the central of the subscription TV operator, this company offers the CleverCast Platform, a complete gateway solution for the Internet.
The hardware and software (a development tool that allows you to create a series of applications) of the CleverCast Platform can range from 50 thousand to 250 thousand dollars. "Even though there is no effective cable Internet market, it is clear that there is a pent-up demand for a high-speed channel," notes Philips' Altieri.
This expectation of good business infected BCD Eletrônica, representative in South America of philips Broadband Networks, which provides equipment for HFC (hybrid fiber-coaxial) networks. "We brought the Crystal Line telephone and data system to Brazil. This broadband solution consists of equipment for heads, users and network monitoring," explains Rosângela Bustamante, general director of the BCD. As for cable modem, the BCD's bet is on the products of the Com21 brand, which are already in "commercial operation", used experimentally by 1200 Argentine subscribers.
Incentive to companies
Many associations will be incentivized to create multi-service networks. "Cisco Systems, as it does around the world, is negotiating the license of its cable modem project in Brazil," said Luiz Carlos Damasio, Cisco's market development manager. The product (fruit of the manufacturing partnership/agreement) is based on the MCNS, the open pattern of this technology. The manufacturer (Cisco partner) will be Parks, a computer company in the Brazilian state of Rio Grande do Sul, a traditional modem supplier.
Cisco currently distributes the uBR7246 Head/Hub in Brazil. Including the integrated network hub and phone call router, Cisco's equipment costs about $35,000 for a network close to two thousand users, and $200,000 for a network of one hundred thousand users. "I think in the short term, many subscription TV operators will be able to become telecommunications companies or offer their cable networks to telephone companies," Damasio says.
Together with SUN and GI, Cisco offered solutions for the first commercial operation involving subscription TV and Internet access in Brazil: tv Filme's Link Express service in Brasilia, with MMDS operation and telephone return, since late 1997. Of its 70,000 TV subscribers, one thousand are internet users. "The total investment, which included head equipment, high-performance servers, routers and cable modems, was close to US$3.5 million," says Carlos André Albuquerque Vieira, director of operations and special projects at TV Filme.
The ideal is the use of two-way networks, suitable for transmitting and receiving data. The investment in such a network (with line design, noise filters, head equipment, topology studies and services such as the preparation of poles and materials), ranges from US$20,000 to 25,000 dollars per kilometer built.
Demand for specialization
Another fundamental concern is the reliability of the network. Multiservice cannot be flawed. "That's where we came in with management and monitoring systems. With multi-service networks up and running soon, demand should increase by mid-1999," explains Eugênio Solda, Barco's director of operations for Latin America.
This company offers hardware – for example, sensors throughout the line – and ROSA software, which manages the network through performance verification and deviations, and activates backups in case of failure. Barco plans a digital head, among other digital resources, for the production of which it bought a factory in Denmark.
Faced with the prospect of good market demand, many companies launch with a special feature of their equipment. TCA Latin America, for example, is committed to its trunk amplifiers, in partnership with the Canadian Triple Crown, to improve the user-head return signal, essential for data transport.
TCA also distributes cable modems that, in addition to video, teleconferencing, data, and telephony, offer security features. Sensors placed on the windows and doors of the subscriber's home are linked to the cable modem, which can trigger an alarm in the TV operator's headquarters, to warn of problems such as forcing.
These cable modems with security resources, which range in price from $300 to $400, come from a partnership with Israel-based GadLine. "They have phones and speakers that even allow you to hear distant noises in the subscriber's house," explains Pedro Antônio Limone, technical advisor at TCA. The partnership with Canadian and Israeli companies is seen as strategic by TCA, because in the event of a market explosion, they believe that manufacturers in the U.S. will not be able to meet the demand. "If it works very well, the TV service will end up being only part of the operators' turnover," Limone hopes.
