Co-operatives must expand into new markets to offset fixed line declines

8 Jul 2008

BNamericas reports that, according to Argentine telephony co-operatives association Fecotel, the country’s co-ops are ready to branch out into the mobile telephony and cable TV markets. The regional operators are currently blocked from those two sectors by a lack of wireless spectrum and regulations barring telcos from offering broadcast services, respectively. However, Fecotel president Adalberto Boccoli was quoted by local newspaper Infobae as saying that the cooperatives will only be able to stay afloat by launching new services to offset lower fixed line revenues and rising costs including salary increases, with the situation exacerbated by the government’s tight control over wireline service tariffs. Boccoli said that the entry of co-operatives into the triple-play arena could force pay-TV prices down by as much as 50%, whilst Fecotel VP Pedro Korolkov was reported as saying that the small players expected to roll out mobile services as soon as the government awards the necessary spectrum. According to TeleGeography’s GlobalComms database, Fecotel and fellow co-op association Fecosur believe they have a potential market of two million mobile clients; telecoms authority SeCom awarded them mobile licences in July 2007 and both are expecting to receive wireless spectrum returned to the government as a result of the 2005 merger of Movicom BellSouth into Movistar Argentina. A portion of the spectrum has already been returned to existing network operators, with a deadline of December 2008 set for the return of the remainder. The co-operatives have said they will require just three months to get services up and running upon receipt of frequencies. However, Claro Argentina (formerly CTI Movil) has indicated that it wants an additional 10MHz of spectrum in the 850MHz band to improve the quality of its existing GSM services, whilst another contender for the spectrum is Hong Kong-owned Hutchison Telecommunications, which has set up a subsidiary in the country and is considering launching as a WiLL operator.