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ON Telecom sees VoIP, VoD as key to future success

5 Jul 2013

Brazilian communications service provider ON Telecom, formerly Sunrise, says that its future growth prospects are heavily tied up with its ability to offer complementary services such as voice-over-internet protocol (VoIP) telephony, video on demand (VoD) and ancillary security/monitoring services. BNAmericas quotes ON Telecom CEO Fares Nassar as saying that the telco’s strategy is to operate as a fixed internet operator, not a mobile carrier, and to focus on ‘fostering loyalty of its [subscriber] base’. Speaking at the Broadband Latin America Forum in Sao Paulo, Nassar said: ‘We launched a couple of months ago in Itatiba, near Campinas [the largest city in the interior of Sao Paulo state], and Valinhos, reaching 2,000 customers to date. We’re extremely satisfied with this rate of penetration’. Going forward, On Telecom plans to add other cities to its footprint, including Campinas, by the end of this year.

In its former guise as Sunrise, ON Telecom used to offer pay-TV services in Brazil. It was one of the winners of regional blocks of 2.5GHz spectrum in Anatel’s auction of June 2012, paying BRL19.1 million (USD8.4 million) for two blocks. The telco, which includes the billionaire George Soros as one of its investors, went on to launch time division (TD)-LTE fixed-wireless broadband services in several of Sao Paulo state’s larger cities and currently claims to serve 133 localities – albeit that it is active in only a ‘handful’ of those.

Mr Nassar confirmed that its key priorities are to broaden its service portfolio to include security monitoring services to residential customers in the first instance, following which it will look to add VoIP and VoD to its range of products. ‘We are testing some products with local and foreign partners. We are evaluating both technology partners and content partners, which are those that have content or those who can add to our content,’ the CEO said about VoD. ‘We are a regional company, so the content must be very local. We will not and cannot compete in terms of content with Netflix, NET, Telefonica or Sky.’ Meanwhile, on the IP telephony front, Nassar said that VoIP – rather than voice-over-LTE (VoLTE) is seen as the more natural fit. The latter technology has limitations in terms of economies of scale he noted, adding: ‘VoLTE will be only commercially available in late 2014. There is currently no equipment for this. Besides, we work with TD-LTE, a technology created specifically for the internet, while frequency division (FD)-LTE was created more for voice, VoLTE.’

Brazil, ON Telecom (Brazil)

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