Winstar Communications Inc.
gained an foothold in Latin America Friday when the Peruvian government
issued the firm a spectrum license to operate its wireless network.
The license grants the company’s use of the regions 200 MHz frequency in
the 38 GHz spectrum band for point-to-point and multi-point services. The
New York-based wireless broadband firm plans to launch network operations
by mid-2001.
Kathleen Flaherty, Winstar president and chief executive
officer, believes the license to operate in Peru is an important step in
the company’s continued expansion into foreign markets.
“This grant is an important step in our efforts to expand the reach of
Winstar’s network and services in South America,” Flaherty said.
Wireless Internet connections are expected to play a large role in the
development of e-commerce in Latin American countries, due to the
antiquated state of the region’s telecommunication services.
Despite recent expansion of the Latin American backbone by foreign
investors, only one percent of Latin America is currently connected to the
Net.
According to figures released by the Latin America Network Information
Center, more and more Latin American companies are hosting
country-level domain names for a public that isn’t able to access the Web.
Peru experienced a 215 percent increase in registered domain names between
1998 and 1999. Only 3,830 domains were registered in July 1998, while a
total of 8,247 domains were registered by July 1999. Despite the growth of
regional Web content, only .5 percent of Latin American’s own a computer,
and only 6 percent have access to a telephone that could provide wired
access to the Internet.
Winstar believes wireless Internet access can fill in the gap between
content and consumers in South America. It is expanding efforts in
countries outside of the U.S. as part of its initiative to reach
undeveloped regions. Winstar’s Latin American gamble is betting that the
region would be highly receptive to developing high-speed wireless access
to the Internet.
Winstar is also in the process of deploying broadband wireless services in
Mexico, Brazil, and Columbia. Success in Peru could open the door to other
Latin American countries hesitant to invest valuable spectrum licenses to
buildout wireless communication services.
Initially, Winstar intends to target the business-to-business market
segment in Latin America. As of yet, no companies have signed on for
services in Peru. But Joe Tomkowicz, Winstar director of corporate
communications, is confident a the company can successfully come to market
in Latin America, much like a “Field of Dreams” made baseball legends come
alive. The premise is simple, built it, and the will come.
“Once companies find out we have to offer, they’ll be able to reach us to
set up service,” Tomkowicz said.
Investors remain optimistic that Winstar could make a solid bid to dominate
the Latin American wireless broadband market. The company’s shareholders
benefited from a 3-for-2 stock split earlier this year when Microsoft Corp. and a
group of venture capital firms invested $900 million in the wireless company.
