In one of the TowerXchange Meetup Americas discussion panels moderated by Leticia Latino-Van Splunteren, President and CEO of Neptuno (an infrastructure company with over 50 years in the industry), and representatives from companies such as Phoenix Tower International, QMC Telecom International, Telecom Argentina, and Ufinet, engaged in discussions on critical topics, including spectrum allocation, infrastructure requirements, regulatory challenges, and economic viability in advancing 5G deployment throughout the Latin American region.
Here are some of the key takeways.
Navigating Spectrum Allocation Challenges
Spectrum allocation for 5G in Latin America is a critical factor driving the region's digital transformation and economic growth. As countries in the region prepare to deploy next-generation networks, the strategic management of spectrum resources becomes essential to support the burgeoning demand for high-speed, reliable connectivity. The effective allocation of 5G spectrum promises to enhance mobile broadband services, foster technological innovation, and bridge the digital divide. Regulatory authorities across Latin America are working diligently to establish frameworks that facilitate efficient spectrum distribution, encourage investment, and ensure equitable access to advanced communication technologies for all citizens.
In Latin America major carriers have collectively invested over US$100 billion. Alejandro Silvestre, Regional Manager at Telecom Argentina, discussed their acquisition of US$300 million for 5G spectrum and ongoing efforts to deploy and stay up to date with the industry regionally. Ricardo Zubieta, CFO of QMC Telecom, highlithed that 5G progress varies widely depending on the market, with Chile leading early on, Brazil achieving comprehensive 5G integration by the end of 2021. In Brazil, Winity, which planned to become a wholesale 5G operator, announced it will return the spectrum it acquired, casting doubt on its business model. However, the rollouts by other operators will continue to drive the demand for thousands of new sites annually.
Latin America has been grappling with spectrum availability, a cornerstone for 5G deployment across the region. Arnulfo Sanchez, Senior Director of Operations for LATAM at Phoenix Tower International, provided insights into the current landscape. "Brazil is leading the charge with aggressive spectrum allocation efforts but many countries in the region are still navigating regulatory complexities that are affecting deployment timelines". But despite these challenges, in countries like Peru, the telecom sector is poised for significant regulatory advancements, including an upcoming 5G spectrum auction aimed at bolstering network capabilities and coverage, particularly in underserved rural areas. Also in Colombia, regulatory actions following the December 2023 5G spectrum auction are accelerating network deployments. Major players like Tigo, Movistar, Sociedad Futura Telecall Colombia, and Claro are actively enhancing their infrastructure in response to these developments.
These differences across Latin America impact not only how quickly 5G can be rolled out but also the extent to which it can be implemented, posing various opportunities and challenges for industry participants. Mexico, is gearing up for 5G deployment, presenting lucrative opportunities for new tenancies and infrastructure upgrades, however the country presents delays facing upcoming spectrum auctions and suboptimal infrastructure.
Innovative Infrastructure Solutions for 5G Deployment
Addressing the infrastructure needed to support 5G, Telecom Argentina has rolled out over a hundred 5G sites, ranging from macro towers to specialised in-building solutions. This adaptive approach is crucial in meeting diverse urban demands across LATAM's cities and suburbs.
A recent study conducted by Raul Katz, President of Telecom Advisory Services, revealed an increase of 10% in the number of independent towers has a significant positive impact on various aspects of the mobile telecommunications sector. According to the GSMA, such an increase leads to at least a 0.96% rise in 4G coverage levels and a 0.51% rise in mobile broadband adoption. Additionally, data from Ookla/Speedtest indicates a 2.05% improvement in mobile broadband download speeds, reflecting enhanced service quality.
Maria E. Cristino, Head of PR for the Southern Cone at Ufinet, addressed the challenges, noting that in addition to conventional towers, options such as mobile units and small cells are crucial for flexible deployment strategies. Given the urban density and varied geographical terrain, adaptable infrastructure solutions are essential to achieving widespread 5G coverage.
The level of competition in the mobile market also benefits, with the GSMA reporting a 0.46% decrease in the Herfindahl–Hirschman Index, signifying reduced industry concentration and increased competition. Furthermore, the ITU notes that a 10% increase in independent towers results in a 3.18% improvement in mobile affordability, measured by a decrease in the service price relative to the monthly GDP per capita.
Economic Viability and Regulatory Clarity
As the global telecommunications landscape evolves, Latin America stands at a crucial juncture in its 5G journey. The region's economic viability and regulatory environment play pivotal roles in shaping the pace and scale of 5G deployments, with stakeholders facing multifaceted challenges regarding the economic viability of 5G deployments amidst regulatory uncertainties. Ricardo Zubieta from QMC Telecom, stated that investment hinges on stable regulation and collaborative partnerships, he underscored the impact of regulatory hurdles, noting that clear guidelines and streamlined processes are essential to expedite deployment timelines. Regulatory clarity not only accelerates deployment but also fosters investor confidence in long-term 5G initiatives. Latin America's telecommunications market is characterised by diverse economic conditions and regulatory environments, influencing the feasibility and speed of 5G network rollouts.
In the "Latin American telecommunications at the crossroads of passive infrastructure sharing" study written by Raul Katz, he identified ten regulatory initiatives that can contribute to the development and sustainability of an independent tower sector. Firstly, it is essential to recognise the role of towers as key actors capable of installing infrastructure facilities, ensuring their operation is not subject to discretionary and ad hoc regulatory decisions. Establishing clear obligations and technical details for network operators or infrastructure providers to place, share, and co-locate structures is crucial.
Regulatory harmonisation between central government and municipalities is necessary to streamline processes. Fast permit approvals, driven by consistent and reasonable timeframes, should be prioritised. Regulations should aim to avoid excessive tower deployment while also limiting fees, taxes, and building rights. Policies must promote the development of shared infrastructure for current and future technologies, particularly 5G. It is important not to establish service concessions or impose price regulations on tower company contracts with service providers. Finally, providing long-term guarantees and legal certainty in regulations and permits is essential for fostering a stable and conducive environment for tower infrastructure development.
Challenges in Workforce Development and Public Perception
As Latin America embarks on its 5G journey, workforce readiness has emerged as a critical issue. The deployment and maintenance of 5G networks require a highly skilled workforce, proficient in the latest technologies and safety protocols. This necessity for specialised knowledge and skills presents a significant challenge for the region. Arnulfo Sanchez from PTI, underscored the importance of continuous training and rigorous safety protocols, highlighting that without a well-trained workforce, the sustainability and efficiency of 5G network operations could be severely compromised. The rapid pace of technological advancements in 5G means that workers must constantly update their skills to keep up with new developments.
To address these challenges, industry stakeholders are focusing on several key areas. Developing comprehensive training and education programmes tailored to 5G technology is essential, as is collaborating with universities and technical schools to align curricula with industry needs. Implementing certification programmes and offering workshops and online courses ensures ongoing skill development. Furthermore, creating policies and incentives through government and industry collaboration can support workforce development, including funding for training programmes and tax incentives for companies investing in employee education. Lastly, promoting the telecommunications industry to attract more individuals by highlighting career opportunities and the sector's importance can improve public awareness and perception.
Prospects and Collaborative Efforts
The debate on the necessity of 5G technology is becoming increasingly prominent. Alejandro Silvestre, from Telecom Argentina, sparked this discussion by pointing out the uncertain immediate returns of 5G investment. Despite this uncertainty, Silvestre argued that 5G offers unparalleled capacity and efficiency, which are critical for supporting the next generation of digital services and applications. The promise of higher data speeds, lower latency, and the ability to connect a vast number of devices simultaneously are among the transformative benefits that 5G technology brings to the table. This enhanced connectivity can drive innovations in various sectors, including healthcare, education, and smart cities, fundamentally changing how services are delivered and consumed.
Maria E. Cristino, from Ufinet, highlighted another crucial aspect of 5G deployment: the role of government support. Emphasising that swift regulatory approvals are essential for gaining public acceptance and expediting the rollout of 5G infrastructure. Governments play a pivotal role in facilitating the deployment process by providing clear guidelines, streamlining approval processes, and creating a favourable regulatory environment. This support not only accelerates the implementation of 5G networks but also boosts investor confidence and encourages private sector participation.
Collaboration among industry stakeholders and regulatory bodies is key to overcoming the challenges associated with 5G deployment. A unified approach ensures that the various aspects of 5G rollout—such as spectrum allocation, infrastructure development, and regulatory compliance—are addressed in a coordinated manner. Industry stakeholders, including telecom operators, equipment manufacturers, and technology providers, must work together to develop and implement innovative solutions that meet the unique needs of the Latin American market. At the same time, regulatory bodies must ensure that policies are adaptable and conducive to technological advancements.
Moreover, public-private partnerships can play a significant role in bridging the digital divide and ensuring that the benefits of 5G technology are accessible to all segments of the population. Collaborative efforts can also drive the development of new business models and revenue streams, making 5G deployments economically viable in the long term.
Towards a Connected Future
Looking ahead, the transformative potential of 5G in Latin America presents a need for fostering new partnerships and forward-thinking projects to drive growth in the region. Alejandro Silvestre from Telecom Argentina stated that "strategic collaboration and innovative solutions will drive inclusive connectivity across the region," highlighting the pivotal role of cohesive industry efforts in harnessing 5G's capabilities to bridge digital divides and propel economic growth.
The TowerXchange Meetup Americas 2024 provided a platform for deep insights into the challenges and opportunities presented by 5G technology in Latin America. From spectrum allocation to infrastructure innovation and regulatory landscapes, the discussions underscored the critical need for cohesive industry collaboration and proactive regulatory frameworks to accelerate 5G adoption and enhance digital connectivity across diverse landscapes in LATAM.
