Argentina. The National Communications Entity, ENACOM, approved a new line of financing so that SMEs in the Information and Communication Technology (ICT) sector have the opportunity to participate in the Argentine capital market in order to improve the infrastructure already deployed and/or extend their services to areas without coverage.
This unprecedented measure seeks to promote the execution of projects that are part of the Financing and Support Program for ICT Service Providers, of the National Connectivity Plan, through the Universal Service Fund (FSU), whose objective is to bring connectivity to the entire Argentine territory, especially to those localities that have historically been underserved.
The program includes Micro, Small and Medium-sized Enterprises (MSMEs) and cooperatives with two or more years of experience and a valid license. Among the eligible projects are last-mile networks, interconnection, deployment in areas without coverage, quality improvements, AI applied to ICT; which will directly benefit homes, schools, hospitals and businesses throughout the country, and will promote the development of artificial intelligence and the creation of regional data centers.
To this end, among other forms of financing, the participation of SMEs in debt instruments in the Capital Market is contemplated, through a mechanism in which ENACOM subscribes debt instruments, covering up to 70–80% of the financing, with the requirement of guarantees and priority to projects with social/sustainable impact. A hybrid model is thus established that combines resources from the USF with private investment, promoting co-management of projects, co-responsibility in their execution and financial sustainability.
The Capital Market is a valuable large-scale tool for channeling, at a faster rate, capital from the USF for the deployment of infrastructure, since it has the capacity to evaluate investment projects, qualify them, identify the character of the recipient, evaluate their social impact, control a posteriori and/or penalize those who did not comply, as well as promote those who were efficient in their management.
This decision puts an end to a modality with weaknesses in its processes, which channeled amounts from the FSU through non-refundable contributions. Now, on the other hand, a new stage of investment in telecommunications infrastructure is opening in the country, through the design of a sustainable development model over time, so that small and medium-sized ICT companies can enter a scheme that will allow them to obtain financing with conditions and terms more aligned with the need for deployment.
Specifically, the initiative generates a virtuous circle that encourages the financing of capital towards the industry, accelerates the process of infrastructure development in the interior of the country and, finally, promotes the growth of the sector, since by increasing the number of users, the mass of contributors to the FSU will increase.
