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Banking on a 3G Future

The state telephone company plans to unfurl its 3G mobile phone system in January, beating out potential private telecom competitors.

Although 3G has been around for years, the technology would far outpace that currently provided by Costa Rica’s dated TDMA and newer, but ill-functioning GSM systems.

But the question remains whether the Costa Rican Electricity Institute (ICE) could design, build and have a working 3G system in six months, as they’ve promised, and without the reported glitches that plague GSM users in some parts of the country.

Fabián Blandón, director of the data transmission school at ULatina, said ICE has sufficiently trained personnel for successfully launching 3G technology under the right conditions.

However, unlike the private companies eyeing the market under the recently approved Central American Free-Trade Agreement with the United States, ICE has to deal with legal and judicial bureaucracy preventing it from making big investments in national projects.

“That is one of the institution’s biggest problems,” Blandón said.

Current cell phone lines run on either of two systems: TDMA or GSM. TDMA phones have 850 MHz frequencies and are in the hands of about 425,000 users, while GSM phones have 1,800 MHz frequencies and are preferred by 1.26 million users nationwide, according to ICE.

In a study released by the Public Services Regulatory Authority (ARESEP) in mid-June, GSM cell phone connections were below standards in the city of Puntarenas, located along the Central Pacific coast, and along the highway from San José east to Cartago.

The connection in Puntarenas was so poor that ARESEP awarded several minutes worth of credit to GSM users in the area.

Claudio Bermúdez, ICE’s assistant director of telecommunications, said topography and frequency factor into TDMA’s better performance in Costa Rica.

The higher the frequency of a cell phone system, the less its signals spread across long distances, Bermúdez explained.

“It’s not whether or not TDMA is better,” Bermúdez said. “It’s simply that it is in a much more convenient spectrum for this mountainous country.”

ICE plans to launch the new 3G system on the same frequency used by TDMA phones.

“We hope that 3G has that … advantage that we could offer (to cell phone users),” he said.

ICE plans to have 1.5 million lines available with 3G technology, working from 554 radio bases and 560,000 terminals nationwide, according to the weekly El Financiero. Voice mail, Internet access, video services and music streaming are some of the functions 3G systems could provide future users.

Any private companies wishing to launch 3G locally must complete a series of ICE requirements. The guide, at least 1,000 pages in length, states future providers must install and operate their own 3G networks.

Several potential service providers, among them Ericsson and Nokia Siemens Networks, have asked for more time to complete ICE’s requirements, El Financiero reported.

With demand for cell phone and Internet access growing exponentially worldwide, ICE must learn quickly how to play in an unregulated market against seasoned competitors, said Blandón.

“The future of the institution is uncertain.”



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