VivaVision: The First Commercial LMDS System

Viva Transmitter Site

This 28 GHz system is located in Caracas, Venezuela

The Viva transmitter is located on the rooftop, overlooking the city. This system began operation in 1993 and is currently broadcasting 42 channels of FM television. Dudley Lab was the supplier of the LMDS equipment.

The following article was written by Annette K. Hugh, and was first published in the Wireless International February 1995 issue. It has been edited due to space restrictions.


"Venezuela: Pay TV Pioneers Race To Subscribers"

It's the great race for subscribers--and Caracas, the capital of Venezuela, has become the starting line for what may turn out to be a country-wide marathon between multiple video delivery operators.

Pay television competition (legitimate and illegitimate) in the country is stiff, and what makes the Venezuelan scenario more curious is the country's present economic state.

Capital and Country Overview

Despite some political problems, the country has a huge amount of resources and a large geographical area to support its comparatively small population. In addition to its extensive and diverse natural wealth, Venezuela boasts a very contrasting society which hosts many foreign expatriate residents who work in the country's expansive petroleum industry.

The country is also one of the main centers of Latin America's entertainment industry. Radio Caracas Television (RCTV), a company which produces some of Latin America's most popular "novelas" (soap operas) and develops some of region's hottest musical talent, is a staple in the Venezuelan entertainment diet. This entertainment influence has affected the population, and may be why the capital in particular has an exceptional high penetration of television sets.

While televisions are in the home, this does not necessarily spell easy penetration of pay television operators. In fact, most of these sets are connected to pirate satellite master antenna television systems which illegally provide programming to the country's many high-rise dwellers.

Despite the risks and handicaps, four companies have made pay television bids in Caracas and beyond. Of these four pay television operators, three are utilizing wireless delivery methods and the fourth player is using fiber/coax.

28 GHz--High Frequency Technology

Spearheading this technological challenge was Donald Williams, president of Communicaciones Centurion, S.A.-- the company responsible for the pay television service subscribers know as "Viva."

The Viva system will be a hybrid system of AM/FM. "Our backbone is 28 GHz" he said. "But we will use cable--so our system would best be described as hybrid." The licenses granted to Centurion not only authorize the company to use the 28 GHz band, but to cable in residential areas in order to link several residences.

Viva is servicing residential areas of Caracas by using a master receiver antenna and then cabling the particular residential area. According to Williams this method also provides an extra measure of security. "It works out better to control the antenna in this way to avoid piracy."

Having visited Suite 12's Cellular Vision project in New York, Williams was impressed with the potential of 28 GHz technology. However, he said, from a technological perspective the Caracas system is very different from that of Cellular Vision.

Williams is quick to distinguish Viva's system from that of Suite 12. "We've reduced the size of the cells, increased the transmit power and increased the power of the receive antennas" he said. Also, Viva reaches its repeaters with point-to-point links instead of transmitting from cell to cell.

While the company appears to presently have its plate full fine-tuning the system and bringing subscribers on line, it is gearing up to be more than a video delivery provider. Williams' vision is that the service can someday provide interactive services, music, and possibly phone when CANTV's (the country's sole telephone-service provider) monopoly ends in the year 2000.

Getting It All Together

Utilizing half of the 28 GHz band allocation, the company has emerged into the Caracas market competing against three other major pay TV providers and against a host of illegal SMATV systems.

But Williams is not worried about market share. "Television plays a very important role in the Venezuelan home," he said. And he believes there will be room for new providers who offer a high-quality, high-channel capacity service. Getting this 28 GHz system off the ground was no easy task. Before surmounting a variety of technical obstacles, Williams had to convince the government to allocate the spectrum for commercial purposes.

Despite usually slow-moving bureaucracy, the local government agency charged with controlling the country's telecommunication resources--CONATEL--acted rather quickly to allocate the spectrum for commercial video delivery applications, Williams said. The whole process took approximately 15 months.

The government split the frequency into two groups 27.5-28.5 GHz and 28.5-29.5 GHz allocating the licenses to two different companies for a period of 12 years. Communicaciones Centurion is the first of those two companies to attempt to utilize their allocation for commercial pay television applications.

Without a doubt, 28 GHz technology has been controversial. Numerous naysayers are invoking the same arguments that were tossed about when MMDS technology came into vogue. However, Williams is not swayed. "Personally I've always been sold on 28 GHz," he said. "There have been a lot of people who have talked it down, but they didn't do their homework."

System Growth

As of mid-January 1995, the company was broadcasting 38 channels and is presently shooting to have 42 channels by February 1995.

While the system officially launched Oct. 1, 1994, its subscriber growth has been tempered. In July 1994, Williams expressed optimism about the system's growth. "My personal goal for the first 12 months is 35,000 subscribers," he said. Six months later, however, this confidence has been moderated. "We believe that 12 months from now we will be around 8,000 connects," he said.

While the company is connecting service, it utilizes a "pre-sale strategy," whereby the company sells the service, but is not committed to have the service installed for at least six weeks after the sale, Williams said.

According to Williams, Viva's initial marketing efforts stirred tremendous consumer interest. Viva's staff placed and ad in one of the local newspapers which generated 2,000 phone calls--overwhelming the company's new staff. The presale tactic that Viva has chosen allows the system to lay claim to its subscribers, while generating much-needed cash flows necessary for the system's development. "We are already creating a lot of cash flows from our sales," Williams said.

Viva's start might be deemed slow by its competitors and naysayers, but others might claim the company is conservatively growing the system. Whatever, the case, the next 12 months will be critical for this company and its technology.

Final Analysis

The Venezuelan market will certainly be a pay television battleground everyone will want to watch in the coming year. With four operators vying for the attention of more than 20 million people, there are bound to be winners and losers.

Without a doubt, the winners will be the low-cost providers that tap into the market's demand for picture quality and good customer service--whatever technology they use to get there. WI


5-8-97

As a p.s. to this article Viva's TV subscriber base has stabilized at about 5,000. This is far short of the original objective but adequate to provide a positive cash flow and allow for a gradual expansion. The current focus of the company is to provide 2-way Internet access over the system. HAD

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