GSM in Latin America and the Caribbean: The First Decade

It was 1996 when Orange Caraibe in the French West Indies became the first operator to launch GSM commercial services in Latin America and the Caribbean and utilized the 900 MHz band.

And in 1998, the first GSM launch using the 1900 MHz band occurred in Latin America by operator Entel PCS in Chile.

By 2001, GSM remained the third most popular wireless technology behind TDMA and CDMA respectively in the region.  However, Latin American operators were faced with the significant historical dilemma of choosing a migration path from their initial TDMA networks to more advanced wireless data service offerings.  The decision of AT&T Wireless in the U.S. to follow the GSM migration strategy possibly influenced operators throughout the Americas who were comparing the benefits of the CDMA or GSM migration paths.  Operators were searching for not only great technical capabilities and a future proof 3G strategy, but also for economies of scale in a market characterized by high prepaid subscriptions with overall low ARPU’s (Average Revenue Per User).  GSM and its migration to 3G UMTS was the ideal solution for providing both technical and business merits to operators. 

2002 was a year of tremendous change in digital wireless technology in the region for two main reasons.  First, TDMA operators with 850 MHz spectrum began migration to GSM 850.  Cable & Wireless in Panama initiated the move in Central America by launching GSM in the 850 MHz band. Second, Brazil’s regulatory decision to allocate the 1800 MHz spectrum for PCS services set Brazilian operator Oi up for its launch of the first GSM 1800 MHz commercial network in mid-year.  Oi launched GSM in June 2002, and by year end had more than 1.5 million customers!  During 2002, many TDMA operators and many CDMA operators began publicly announcing their intentions to deploy the GSM family of technologies. Later on in 2003, EDGE was commercially launched for the first time in Latin America by Telefonica Chile.

At the beginning of 2005, GSM leapfrogged CDMA and TDMA to become the #1 wireless technology in the region in terms of growth, customer base and the number of new customers added.

In the ten years since GSM was first launched by Orange Caraibe, GSM services have been deployed throughout every country of Latin America and Caribbean.  Both TDMA and CDMA operators chose the GSM family of technologies.  Subscribers are ensured reliable connectivity via roaming agreements and multi-band phones wherever they travel in the region. By the end of 2006 almost 70% of all mobile subscribers in Latin America and the Caribbean were served by GSM networks.  

Now, Latin wireless mobile users are progressing beyond voice communications to high speed wireless data services. They have embraced both text messaging (SMS) and Multi Media Messaging services (MMS) as cost-effective and spontaneous ways to share text and graphics. GSM operators have answered the demand by upgrading their networks with advanced wireless data technologies. Chile, continuing their technology leadership which began when they launched GSM 1900 in 1998, implemented commercial GPRS (General Packet Radio Service) in 2001, EDGE (Enhanced Data Rates for GSM Evolution) in 2003, and most recently became the first to launch UMTS/HSDPA in Latin America in December 2006.  In November 2006, Cingular in Puerto Rico was first in the Caribbean to launch UMTS/HSDPA high-speed wireless data services. Several other operators in the region have been trialing the 3G UMTS/HSDPA technology and are preparing to follow suit. 

Subscriber growth has been phenomenal, from merely 8,700 in 1996 to near 210 million GSM customers in the Latin region today.  Likewise, the overall wireless penetration rates throughout Latin America have grown, from an average of 2.23% in 1996 to nearly 70% at the end of 2006. 

GSM has become the undisputed preferred technology of wireless operators and enterprise and residential users in the region for many reasons including:

• Coverage in every country of Latin America and the Caribbean

• International roaming in the Americas and worldwide

• Economies of scale which have lowered the cost of handsets

• Technological advancements in voice and data capabilities

• Future proof wireless data migration strategy: EDGE & UMTS/HSDPA

Erasmo Rojas
Regional Director for Latin America and Caribbean
3G Americas