Latin America will wait at least six years to fully deploy 5G networks

The full provision of telecommunications networks with technology 5G would be a reality beyond the year 2028 in Argentinadue to a political-economic and regulatory context that could complicate the deployment of this type of service in that country.

This is the diagnosis reached by the local subsidiary clear of Mobile Americawith a view to the first bidding for frequencies 5G that the Argentine government plans for the first quarter of 2023.

“We are discussing what the 5G tender for 2023 will be like. And you have to know that 5G will require a minimum deployment of six years, beyond 40% of the population having an income below the poverty line. I think you have to think about these things, because technology can help solve these problems,” said the director of regulatory and institutional affairs at clear argentinaAlejandro Quiroga López, in a conversation taken up by the journalist Andrea Catalano.

Argentina presents a context for 5G with a currency that depreciated 18.09% in 2021 and close to 25% so far in 2022. Also the following year the country will enter a presidential succession process and according to surveys, such as that of Management & FIT, on 68 % of Argentine citizens would consider changing their political party in the federal government, relegating the politicians in office who now design the auction 5G with certain characteristics. And on top of that, the purchasing power of the Argentine salary has lost 7.2% in real terms so far in 2022, according to conservative figures from the government body Indec.

A fact that is of greater importance for the executive of Mobile America in Argentina, lies in the fact that the monthly average consumption or ARPU of the users of clear in the country it fell 21% in the third quarter of 2022, from 794 Argentine pesos in the third quarter of 2021, to 628 Argentine pesos between last July and September. In more detail, América Móvil reported, through clear, an ARPU equivalent to 73 Mexican pesos between July and September of this year. In the same period, but through Telcel in Mexico, the company raised an ARPU of 168 pesos, 6% more than a year earlier.

Argentina It is a country with 45 million inhabitants in 2020, but with 54 million cell lines in the same year, and of all of them, 49.2 million are prepaid accesses. This is the diagnosis that all cellular companies have to estimate how much it is possible to invest in fifth generation deployments and monetize these new assets to generate subsequent reinvestments and in an economy that would grow 3.6% in 2022 and 1.9% in 2023, the year of your 5G auction.

The Argentine reality would not be so different from that presented in the matter by other Latin American countries. In Mexicoalthough the local currency has appreciated 5.6% so far in 2022 and despite the fact that the economy would grow 2.5% this year and 1.6% in 2023, according to the OECDand that, for example Telcel present an Ebitda of 31,250 million pesos, 1,600 million dollars, last September, the Mexican tax policy prevents operators from showing too much interest in the acquisition of spectrum frequencies due to the high tax imposed on the annual use of the bands, up to 92%, according to the OECD.

A GSMA report indicates that at least five million people in Mexico have not been able to access the browsing experience 4G-LTEdue to the tax charges for the use of spectrum that the State imposes on the operators and the difficulty they face to increase their coverage.

In Colombia, local taxation policy has also complicated operators’ plans. There, the operator Telefónica submitted a resignation to its 2.5 GHz bands. Telefónica indicated that fiscal policy has a negative impact on their finances and also affects their ability to invest in the Colombian market.

Mexico start your own contest 5Gclose to the expiration of 2022. The process itself will become a reality in the second half of 2022, with the competition of various portions of spectrum in five bands: 600 MHz, 800 MHz, 850 MHz, 1.5 GHz and 3.5 GHz.

In the Argentina The plan involves clearing and reordering the regional pieces in national blocks of the 3.5 GHz spectrum there, made up of up to 300 Megahertz of frequencies, and that it be placed on the market in up to three lots of 100 MHz each among the big three operators from that country: Movistar of Telefónica, clear of Mobile America y Personal of Telecomfor the configuration of fixed and mobile wireless products.

“We see that the challenges of 6G are difficult but it will arrive; 5G It’s coming, the issue is that we have to do it right, because the industry’s situation is a drama in terms of dollars, and we cannot pay abroad to do maintenance things that are important, be it 2G, 3G, or the 4G”, added Quiroga López regarding the context of Claro Argentina, not so different from the rest of Latin America.

Closer in distance, but further in time, businessman Enrique Yamuni, CEO of Megacable Holdings, said in a conversation with the media that technology 5G would be a full reality in Mexico not before five years:

“I think we have a false expectation of 5G in the country (…) In the United States, wireless companies have invested more than 150,000 million dollars in the conversion to 5G. Do you know how much their income has risen? Any. Why would (the operators) here convert to 5G, if they are just finishing installing and paying for 4G?

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