Latin America. The COVID-19 pandemic has had a multisectoral impact, but in the case of telecommunications, the availability, robustness and strengthening of networks has been urgent to provide them with capacities for the increasing transmission of data processed by users.
This encourages the transition to the latest generation of telecommunications services (5G) that promises a multiplicity of benefits. For example, an increase in the productivity and speed of computational processes, innovation and technological development in sectors such as health, education, agriculture, security, energy and trade, among others.
A review of schedules for the deployment and development of 5G in Latin American countries reveals its postponement over the already late instrumentation, including the postponement in the provision of the frequencies of the radio spectrum, necessary in this technological evolution. This has led to a revision of road maps and sectoral strategies in the short and medium term, with the current economic uncertainty and contraction.
Some Cases of the Region. In Latin America, the current health crisis has become an economic one as well, such that operators and regulators are reviewing the financial capacity to make the investment required to be able to deploy these networks.
This is the case of countries such as Argentina, Brazil, Chile, Costa Rica and Mexico, in which bidding plans have been extended, although it is expected that projects will be issued for the provision of spectrum by 2021.
In Colombia, the progress in the execution of its roadmap for the transition to 5G, prior to the pandemic, has allowed the continuity of the testing phase during it. However, it is virtually impossible for the tender for frequencies in the 3.5 GHz band to occur this year, despite the pilots being successful.
Other countries have granted temporary spectrum rights to deal with the current rise in data traffic, where we find the case of Peru.
Uruguay and Puerto Rico are at the forefront of the deployment of 5G, already offering these services commercially. Although their deployment and adoption are still limited, they are expected to accelerate during the rest of the year and 2021.
All this merits redirecting, accelerating and assisting the efforts to resume them with greater speed and commitment and consequently, promote the arrival of this technology in the coming years.
Competitive Imbalance due to Early Spectrum Tenure. In recent days, the Federal Institute of Telecommunications (IFT) of Mexico authorized, unconditionally, the sale by Axtel of rights to operate 50 MHz of the 3.5 GHz band to Telcel, the preponderant telecommunications operator.
This is in addition to the transfer of 50 MHz rights in the same band that Telmex made to Telcel last April.
This, although it urges the regulator to tender the available frequencies, generates a new competitive imbalance from the spectral field, by providing an operator with excessive market weight, the possibility of developing 5G services in advance.
This is the second time this has happened, the first was when authorizing the assignment of 60 MHz rights in the 2.5 GHz band to provide 4.5G services.
The restrictions that today apply in other areas should be implemented in this matter that today already leaves the preponderant operator at an advantage again compared to its competitors.
Text written by Ernesto Piedras of The Competitive Intelligence Unit.
