Ericsson: Operators to Spend US$500mn on 3G in 2008

Swedish telecoms equipment provider Ericsson expects Brazilian operators to spend US$500mn-550mn on 3G equipment in 2008, Lourenço Pinto Coelho, Ericsson Brasil's commercial and marketing VP told BNamericas.

Ericsson, which posted net revenues of 2bn reais (US$977mn) in 2006 in Brazil, believes the figure will include spending on equipment such as radio base stations, switches and general adaptation of infrastructure.

The expected spending will depend on whether Brazil's telecoms regulator Anatel holds an auction for 3G licenses in November as it has said.

"However, this is still not totally clear," Coelho said.

Four 3G licenses are expected to be on offer for regional and nationwide coverage.

Currently, only Brazil's Minas Gerais state-based mobile phone operator Telemig Celular has publicly started tests with Ericsson's 3G/WCDMA technology in state capital Belo Horizonte.

However, Ericsson is talking to all of the operators, Coelho said.

"We expect to work with all the operators in 2008, with some turnkey contracts and others helping their in-house teams with the setup," he said.

Coelho would not say whether any of these operators were doing 3G trials, but "I would expect all of them to start with deployments before [the auction]."

Ericsson has pumped 5mn reais this year to produce 3G equipment to create a line of 3G products for Brazil and some exports.

The Swedish company has already started production of 3G equipment at its factory in the city of São José dos Campos in São Paulo state ahead of anticipated demand from Brazil's telecoms operators.

"We are targeting this 3G market and want to replicate the footprint we have already achieved in the mobile market," Coelho said.

The executive believes handsets offering 2G internet speeds will still remain the norm for many years to come before eventually replaced by 3G.

Infrastructure provider Nokia Siemens Networks (NSN) is Ericsson's main rival in supplying 3G equipment in Brazil, according to the executive.

Posted to the site on 21st August 2007