THE FINAL FRONTIER.

AT THE SAME HOUR EVERY MORNING, JAVIER UMANA'S cell phone beeps. But it's not an incoming call. The young Venezuelan programs his phone to double as an alarm clock. Minutes after the alarm, a television automatically clicks onto a music show while the telecom consultant dresses. Umana checks his electronic agenda before he heads off to work at phone-equipment maker Alcatel.

Umana stands among the rush of young, well-educated Latin American professionals who would be lost without lo ultimo in gadgets and gizmos. He spends the day linked to his cell phone and laptop computer. In the evenings, he rides a stationary bicycle with an electronic speedometer while he watches TV changing channels with a remote. Although Internet use in Venezuela is low, he's connected--at work and at home.

"We Venezuelans are practical. We like technology we can hold in our hand," he says.

Venezuela is the last major market in Latin America to dismantle its telephone monopoly, but its residents are already fast-forwarding into the telecom future. The country, the first in the region with more cell phones than fixed lines, boasts wireless Internet service, free Internet access, e-mail in the campo and the infrastructure for high-speed phone and data services from pay TV operators.

All this, before the market monopoly is even broken.

Open season begins in November when Venezuela liberalizes its 60-year-old telecom laws, diluting the dominance of Compania Anonima Nacional Telefonos de Venezuela, or Cantv, nine years after privatization. (Even laggard Argentina, which also changes its telecom laws in November, has two major fixed-line phone companies instead of one.) Like the changes in other countries, the new rules, regulations and technology will shift the telecom landscape, draw investors, drop prices for long-distance and create a market for cutting-edge Internet and e-services.

Just which telecom players will prevail in the soon-to-be deregulated market worth an estimated US$4 billion annually? The current telecom giant, controlled by a GTE-led consortium, will likely retain its reign with its national fiber optic network Telefonica, already a bit player with a 6.4% share of Cantv, seeks a bigger profile as part of its campaign to sweep the continent. Atlanta-based BellSouth, the region's wireless powerhouse, is pumping $1.5 billion into its Telcel subsidiary (Venezuela's largest cell phone company) over the next five years. AT&T, Bell Canada and Deutsche Telekom are also eyeing fixed-line, long distance and cell phone markets.

Plugged in and impatient. More interesting than who is how phone companies will survive in a fiercely competitive Venezuelan market. Unlike any other Latin American market, wireless already dominates--16% of the population has cell phones versus only 11% with fixed-line phone service--setting the stage for radical change. Bad phone service may have motivated many locals to go wireless, but part of the telecom thunder stems simply from a lust for technology.

In Caracas, the busy Altamira neighborhood hosts the high-rent Parque Cristal building where dot-com companies crowd the tenant list. In the offices of Loquesea.com, 27-year-old computer programmer Alejandro Quintero listens to music on headphones as he works.

"I'm plugged into the Net all day. We use e-mail. I have friends who do chat. Yesterday there was a soccer game I watched online," he says. Quintero banks electronically, listens to music on the Internet and sometimes plays a digital game with co-workers at the end of the day. Like Umana, he's impatient for full access to wireless Internet. Among other things, he's looking forward to using his cell phone to check a Web cam site that monitors Caracas traffic tie-ups.

Technology is hitting the country ahead of its time--some telecom services are more advanced than those of the United States, including roaming range--but Quintero wants more. And he wants it now.

Venezuelans' fascination with high-tech equipment dates to the boom years of the 1970s and '80s, which allowed a lot of contact with the U.S. and European markets. "We were a bit more in the technology loop than other countries," explains Venezuelan Enrique Narciso, general manager for StarMedia Mobile, the telephone-based web services arm of Internet company StarMedia Network.

StarMedia Mobile, through a partnership with Cantv's cellular company Movilnet, offers what it bills as Venezuela's first personalized Internet portal, accessible through wireless phones. As in the rest of Latin America, Narciso sees cell phones "as the primary media vehicle for people in Latin America to access information."

Already Movilnet users can "personalize" their phone, electing the kind of ring they want on the receiver, among other features. And the company has begun offering a limited service of short e-mail messages. But, not too far in the future, Narciso expects to see caraquenos strolling down the street tapping on their cell phones to get stock quotes, weather reports, baseball scores and the results of the popular 5 y 6 horse races.

"The content is going to be location based. That means, in Venezuela, if you want the weather, you can find it for Caracas or Maracaibo or Valencia," says Narciso.

Mobile masses. While these mobile services may eventually roll out everywhere in Latin America, today one out of almost six Venezuelans wields a wireless phone--the region's highest usage per capita. On the streets of Caracas, cell phones on belts, in pockets and in briefcases are as ubiquitous as arepas in restaurants.

Some people use them for the social cachet, others for simple practicality, but everybody partakes. Motorists clamp them to their ears as they snake through traffic, homemakers tuck them into their purses as they enter subway stations, teenagers huddle in groups with phones in their hands and executives rambling down the sidewalk after lunch conduct animated street conversations. The brand names and numbers of each new phone as it hits the market are as well known as the latest telenovela stars.

"The Nokia 8860, that's the one everyone wants," says Erika Boscari, a salesperson at the Case Phone store in a downtown shopping mall, as she pulls out the teeny silver cell phone carrying a bolivar price tag equivalent to nearly US$300.

On Simon Bolivar's birthday, most Venezuelan retail outlets shut their doors--but the Cyber Cafe at Centro Sambil shopping mall is jammed and the nearby telecom stores are busy. At a counter, shoppers marvel at five riotously colored cell phones lined up in miniature beach chairs. While they may not have the cash for the latest digital phones, there are always the interchangeable phone covers, light up gadgets to show when a cell phone is ringing (without the distraction of a beep), battery chargers, headphones, two-way radios, hands-free microphones for car phones and other accessories.

"Sometimes we seem like children with new toys," says Barbara Indriago, a marketing assistant at Digitel, the smallest--and newest--of the three players in Venezuela's wireless arena. "But while cell phones are luxuries in some countries, they are necessities here."

As in the rest of Latin America, cell phones offered immediate access at a time when the traditional phone company, Cantv, simply couldn't get the job done. As Indriago's boss, William Nazaret, says, "Historically, you can say that Venezuelans never had telephony. What they had was Cantv."

Fitful phones. Venezuela once was infamous for phones that rang busy all day long, for phones that wouldn't work during rainstorms and for repair service that never got done. Service was so bad that executives met in person for business discussions--preferring to brave wicked highway traffic over a hit-and-miss communications network. When homeowners sold their quintas, they sold the phone lines, too.

When cell phone service was introduced to Venezuela in 1988, the rush was fast and furious. But mobile phones did not remain just within the ranks of the privileged; the government passed important legislation known as "calling party pays that allowed fix-it men and other laborers to receive calls on their wireless phones without paying for them. The regulation--later adopted across Latin America--provided an important impetus for owning a mobile phone and pushed the monopoly fixed-line operator to improve dramatically.

With "customer service" no longer an oxymoron, Venezuelans are actively clamoring for more from their telecom providers--and getting it. Digitel, which began offering wireless phone sales and service in January, competing with much bigger Movilnet and Telcel, is racing to offer wireless electronic banking and e-mail, among other new services.

"There's a stereotype that in Venezuela, everyone buys gadgets when, in fact, what they do is acquire services or devices because they are useful--not just because they are the latest thing," says Nazaret, the vice president of marketing and business development for Digitel. He adds that competitors who market wireless Internet access to horoscopes, sex lines and jokes "are missing the point."

"Do you want to know what I think the biggest wireless Internet use will be? For medical information," says Nazaret. "You're out in the interior of the country and there's no doctor and you need to know what to do."

Be it sex or self-help that's driving Venezuela's techno revolution, it blasts forward despite a number of barriers, most notably price. Cell phones in Caracas cost twice that of similar equipment in the United States. And monthly service can run four times that of similar U.S. services. Conatel, Venezuela's telecom regulatory agency, estimates that Venezuelans overall pay 15% more for telephone service--fixed and wireless together--than the global average.

How can Venezuelans afford those cell phones? The country pioneered the system of pre-paid wireless service, which allows users to limit cell phone use to a fixed amount to control expenses. Also, many Venezuelans believe they can't afford not to have the phones. Fears about security in crime-ridden Caracas bolster that belief, as did the mudslides and flooding that claimed thousands of lives in December 1999. Ironically, the Vargas State crisis cracked open the telecom sector door even before liberalization: it permitted some previously prohibited fixed wireless services to handle the emergency.

Free Internet: Shalom. As with telephones, Venezuelans are operating at their own high-speed when it comes to Internet technology. Expensive computers and Internet service have held down Internet penetration. Nevertheless, the country has e-mail access in some remote cities, fledgling wireless Internet has arrived and at least one provider is offering free Internet access--despite government efforts to block it.

IFX Corp., through tutopia.com, in April began offering free access in Venezuela even though the Chavez government vowed to outlaw free access on grounds it would bring down the quality of service.

IFX CEO Michel Shalom says the obstacle course set up by the phone monopoly is the reason more ISPs aren't offering freebies. Telecom competitors, in particular, face daunting red tape to get operating permission. "We made peace with all the parties in the country that we had to in order to obtain sufficient infrastructure. Getting a telephone line lies strictly in the hands of one company," explains Shalom.

Efforts to open Venezuela to a fourth wireless operator have been languishing for four years and, generally telecom regulator Conatel has been criticized for its handling of the sector. In some instances, it has risen as a consumer protection agency blocking cell phone companies until service quality was rectified. In another case, it shut down Omnivision when the cable operator decided to sell local advertising space on its pay TV channels. "It is this unpredictability that poses the greatest challenge and risk to investors," says a Pyramid Research report.

Conatel's goal is to boost Internet access tenfold, from the current 340,000 users, over five years. The government is backing a plan to introduce prepaid cards to allow cheap Internet access at special community centers. The project is expected to start with half a dozen computers at a special center in Caracas, perhaps within a government building or the subway system, then expand to outlying areas.

"This is what the market is asking for: greater bandwidth, more mobility and access to the network and the convergence and integration of services," says Alvaro Benavides La Grecca, public affairs general manager for the monopoly fixed-line phone company Cantv. The question is whether Benavides' employer will continue to supply these services or whether competitors will rush in.

Certainly competition will be fierce--other telecom giants are vowing to build their own fixed-line infrastructures to push out Cantv--but the battle lines are not yet clearly drawn. Early telecom investors hope to benefit from government subsidies and tax breaks, although the full terms of the new law are not yet in place. The government, meanwhile, will cash in by selling Internet and other concessions. The telecom sector is expected to lure investments of $2 billion annually once the laws change.

More than wireless, telecom experts say, Internet growth will follow the burst of traditional fixed-line telephony.

"Don't discount fixed-line growth as of yet. There's a lot of pent up demand for it, just because of the way the monopoly has operated," says Hector Hernandez, senior telecom analyst at research company IDC. Since only 11% of the country's 24 million residents have fixed phone lines, Hernandez predicts the level will jump quickly to about 16%, or 18% in the first couple of years after the monopoly ends, then grow about 2% annually after that. Some of the growth, he says, likely will be fueled by government goals for telecom companies as part of a bigger push to expand phone services to rural and low-income Venezuelans.

Existing cable television companies are prepared to grab a piece of the telecom sector that posted 20% growth last year. Veninfotel, for example, since 1995 has been laying telephony cable for its subscription TV company Cabeltel (one of Venezuela's top cable companies, along with SuperCable and Intercable). Even barring specific permission, broadband cable may open the door to its participation in telephony.

Although the monopoly's post-mortem remains unwritten, one thing's for certain: with or without guidelines, and with or without government support, Venezuelans are moving in radical directions. They're willing to jump hurdles and ignore the rules in their driving lust for technology The country is operating on fast forward.