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Movistar Chile: Unleashing the potential of copper

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Movistar Chile has blazed a trail of innovative growth with strong momentum by leveraging its existing network resources for maximized bandwidth capabilities, and providing subscribers with richer ultra-broadband services.

Dual pressure necessitates changes

A subsidiary of Telefonica, Movistar Chile is the largest full-service operator in Chile’s telecom market, with 3,000,000 landline phone subscribers so far. Thanks to its high-quality communications services and wide market coverage, it has become a well-known brand in the market. Of the services that it provides – broadband, Pay TV, local/long-distance/international calling, data transfer and VAS, it boasts the No.1 position in the broadband segment with a 46% market share.

Nonetheless, to grow further, it faced great pressure from two aspects. Chile boasts a developed economy, with GDP reaching USD169 billion in 2008, or GDP per capita of more than USD10,000, and has since then kept the No.1 position in Latin America. Moreover, its young population, with an average age of only 31, has a curiosity for new things and a strong demand for Internet surfing. This has fueled the surging demand for broadband in Chile. Instead of just browsing and shopping online, people in Chile have been seeking richer, video-based high-broadband services, such as pay-per-view, personal video recorders, and parental control.

Movistar Chile’s existing copper cable access network had been in use for more than two decades and a lot of its equipment had become obsolete, making it difficult to maintain the network and satisfy the need for capacity expansion even as subscribers’ demand for bandwidth continued to grow increasingly stronger. This posed serious threats to Movistar’s brand and future growth.

On the other hand, Movistar Chile was also facing pressure from local cable operators, which had been nibbling away at the operator’s broadband market share. Leveraging their advantages in the TV sector, cable operators were bundling their TV services with broadband Internet services via their existing Hybrid Fiber-Coaxial (HFC) network.

Seeking the best solution

To tackle the dual pressure from customer needs and competition, Movistar moved quickly in 2010, by first consolidating its fixed and mobile networks. It also worked on consolidated brands, making Pay TV services a priority in order to take the fight to local cable operators. As video services need higher bandwidth, to allow more users to access high-quality video services, renovating the network was a must. With the slogan of “Broadband Speedup”, the operator set itself the goal of first increasing speeds for 100,000 subscribers, and then carrying it out across its network.

After evaluating the options of FTTH and FTTC for its network speed up project, Movistar finally decided on the latter one for its advantages in return on investment (ROI) and time to market. Given the operator’s massive copper cable resources, shortening the copper cable line between end users and broadband equipment within 300 meters, can effectively boost end users’ bandwidth up to 50Mbps, which is more than enough to carry multi-play services including video, fully meeting the requirements of digital homes in the future.

Therefore, equipment that used to be placed in center offices needed to be moved closer to customers. As Movistar had chosen to go with outdoor cabinets, several obstacles lay in its path.

First, it was impossible to receive permission from municipal governments to place new outdoor cabinets in large cities. Second, if such cabinets were placed underground instead, the cost would be too high and maintenance would become more difficult. Third, guaranteeing a stable power supply was another issue.

Movistar decided to work with Huawei on the access solution and perform a careful analysis of the situation, supported by Huawei’s global experience in the field of FTTC applications. The joint team found out that the operator had more than 50,000 copper street boxes on its existing network, including 25,000 street boxes alone in Santiago, the capital of Chile, and that the locations of those boxes had been approved by local governments. Huawei proposed to utilize these locations to place outdoor cabinets. Its high-density Mini Digital Subscriber Line Access Multiplexer (MiniDSLAM) equipment could be placed inside outdoor cabinets; as for power supply, the remote power supply technology utilizing copper cables could fully meet the demand. This TOP BOX Solution with remote power supply proposed by Huawei quickly won the approval of the senior management at the operator.

Empirically proven performance

Outdoor cabinets need to endure harsh natural conditions including high temperatures/humidity, low temperatures, salt mist, and dust so that the equipment inside can operate normally. As outdoor cabinet design and manufacturing have high requirements, Movistar asked Huawei to conduct field trial tests to see how the good proposal works in a real situation.

In October 2010, rounds of stress tests were conducted on Huawei outdoor cabinets and MiniDSLAM in a hot desert in northern Chile, including tests involving heat dissipation at high temperatures, full load running, remote power supply, corrosion, and waterproofing.

Two months of efforts by the joint team reaped fruits, and the operator was very satisfied with the result. It quickly announced in public that it would begin providing home users with richer ultra-broadband services. Learning about Movistar’s plan for network renovation, a rival quickly stepped up provisioning of new services with a view to get the cream of the newly added user market before the former finished its renovation. Time was ticking.

With Movistar’s commercial success at stake, Huawei quickly strengthened its delivery team and set up a dedicated war room with Movistar. Tackling challenges one after another, including cabinet customization and integration of external materials, as well as surveys on a large number of outdoor sites, Huawei successfully delivered the high-volume outdoor stations in strict accordance with the operator’s requirements for quality and time schedule.

The head of the Movistar team for the project noted that it was only due to the “unbelievable” cooperation between the two sides that delivery could be made within such a short period of time. At a press conference, the operator mentioned Huawei’s role more than once and expressed its intention to replicate the success of these outdoor cabinets across Latin America.

By the end of second quarter of 2011, Movistar had successfully deployed 900 TOP BOXes, fully reversing the previous situation. Its number of broadband subscribers increased by 200,000 and market share bounced back to an even higher level than the previous year. With the help of an ultra-bandwidth and reliable network, its multi-play services were accepted enthusiastically in the market, giving further boost to the operator’s brand image. With such excellent market performance, Movistar set the goal of increasing its investment and deploying more than 3,000 TOP BOXes in the next three years and reproducing its success across Chile, covering major cities, regions and some suburbs. The operator’s goal is to offer all the people of Chile access to its rich, excellent services in the foreseeable future.

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