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World Cup rush leaves gaps in Brazil cell network

FIFA Secretary General Jerome Valcke (R), Brazil's former soccer player and member of the Local Organizing Committee Ronaldo and Brazil's Sp
FIFA Secretary General Jerome Valcke (R), Brazil's former soccer player and member of the Local Organizing Committee Ronaldo and Brazil's Sp

By Brad Haynes and Luciana Bruno

SAO PAULO/RIO DE JANEIRO (Reuters) - Rio de Janeiro's legendary Maracanã stadium was in a frenzy. Brazil had trounced the Spanish world champions. Yet 73,000 soccer fans could scarcely send a text message to celebrate.

The final of the 2013 Confederations Cup, a dress rehearsal for this year's World Cup, was a promising 3-0 victory for Brazil's national team but a bad omen for its cellphone network.

Despite costly investments and another year to prepare, phone companies are still struggling to provide adequate coverage of key sites for the tournament starting in June.

Several stadiums were delivered months late and work at major airports remains unfinished, forcing the telecoms industry to cut back and in some cases even cancel planned investments.

"Where we don't have much time, we probably won't be able to give complete coverage for the stadiums," said Eduardo Levy, head of a Brazilian industry group tasked with preparing cellphone coverage at World Cup venues.

If the problems from last year recur, it may be hard for fans to make a phone call at a big game, let alone upload photos

or peruse social media.

Jerome Valcke, secretary general of soccer's governing body FIFA, said recently he was deeply worried that in most cases communications for fans and media will not be fully tested before the tournament begins.

"We don't want Brazil to be remembered as the worst World Cup of all time because the journalists could not get their stories out to the rest of the world," Valcke said.

The risk of an embarrassing World Cup outage is just one consequence of an explosion in mobile data use outpacing the growth of Brazil's cell network.

That pattern of soaring demand and stagnant investment has dogged much of Brazil's economy, leading to logjams on major highways and airport tarmacs as well as phone networks.

Carriers already have a reputation in Brazil for spotty coverage and lousy service, making them one of the most resented industries judging by consumer complaints.

Chastened by the fallout from the Confederations Cup, the telecoms industry asked for 120 days to install and calibrate networks in six new stadiums delivered this year.

It got less than 70 days in the southern city of Curitiba and in Sao Paulo, which will host the World Cup's prestigious opening match on June 12 and a semi-final in early July.

Teams of 100 technicians are now working day and night to set up stable coverage in the seating sections of those stadiums, but there will likely be dead spots in surrounding concourses, parking garages and temporary structures, Levy said in an interview.

"At the airports, our intention was to carry out exactly the same project designed for the stadiums," he said. "But many airports won't be ready in time. We'll do external coverage."

DEAD PHONES

Those airports are expected to bring some 600,000 smartphone-toting foreigners into a dozen Brazilian cities hosting World Cup matches. The concentration of such data-heavy users may put an unprecedented strain on local networks.

On the day of the Confederations Cup final last year, for example, data traffic from users in the host city of Rio surged to one third of the daily average for all of Brazil, according to Claro, the Brazilian mobile unit of America Movil.

The network at the Maracanã was so crowded that phone batteries quickly drained from the struggle to hold a signal, leaving some fans with dead phones by the end of the match.

Anxious to avoid a repeat, an industry consortium is investing 200 million reais ($90 million) to reinforce coverage at World Cup stadiums.

Carriers are also beefing up their fiber optic networks connecting host cities and adding antennas at major hotels, training centers and public venues. Telefonica Brasil alone is preparing 65 new cell towers at key World Cup sites.

Other phone companies, such as Grupo Oi, are expanding their Wi-Fi networks in popular public areas to help offload heavy data users from their cell networks.

FIFA has yet to approve carriers' use of complementary Wi-Fi networks at stadiums, which could increase data capacity by as much as 50 percent.

Cellular phone networks worked well at the last World Cup in South Africa in 2010 and at the Winter Olympics in Sochi earlier this year.

To some extent, the World Cup has given Brazil a hard deadline for much-needed upgrades like America Movil's new submarine cable from Brazil to Miami. But other capital spending will offer little long-term benefit, such as a next-generation mobile broadband at a stadium in Cuiaba, where the biggest soccer team usually plays to crowds of less than 2,000.

Telecoms firms are hoping to defray the costs with extra revenue from travelers during the month-long tournament. Phone companies have been signing roaming contracts with foreign carriers and making it easier for visitors to buy local plans.

Any one-time bump in revenue is unlikely to offset all the related investments, however, meaning more pressure on earnings. Profits have suffered over the past year due to weak sales and stiffer competition.

Still, companies are eager to show their best face to fans and avoid a high-profile black eye for the industry.

"The World Cup is a global showcase of the kind that a country only gets a few times, so it's definitely the moment to roll out all the technology you can provide," said Marco Di Costanzo, a senior executive at TIM Participações.

Brazil's mobile phone market has more than doubled in six years to 272 million connections in a country of nearly 200 million people, but network investments have not kept up.

In 2012, regulators even suspended three providers from selling new mobile subscriptions in some states until they presented investment plans to strengthen their networks and cut down on dropped calls.

"The problems we are going to face in host cities during the World Cup are the ones we already have," said Eduardo Tude, head of telecom consultancy Teleco.

($1 = 2.23 Brazilian reais)

(Editing by Todd Benson and Kieran Murray)

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