Several countries have initiated programs to reclaim back the underused spectrum, in order to auction it at a later date, where technically it would be possible to use the spectrum bands for 5G services.
In the majority Latin American countries, mobile network operators have for several years been working closely with wireless infrastructure companies and technology providers to conduct 5G pilot projects and test the viability of the technology for a particular market and region. This clearly shows that the longer-term plan for all the telcos in the region is to switch to 5G services, but with some countries in LATAM only recently closing down their 2G operations, we are likely to see very uneven adoption of 5G across the region.
By the end of 2027, 5G is expected to represent 44% of mobile subscriptions in Latin America and the average traffic per smartphone is forecast to be approximately 35GB per month. 5G is widely seen as an opportunity for the region to take a technological leap – potentially even skipping broadband access in some territories – and as a potential solution to bridge the digital divide and help connect the unconnected, particularly in areas that are remote or difficult to access. An estimated 244 million people in Latin America, one-third of the total population, do not have access to the internet. The technical, commercial and regulatory preparations to introduce 5G has been greatly accelerated by the COVID-19 pandemic in the last few years, as significant funds and efforts were invested into digitising the public and private services across the region. Still, even in the more advanced markets, from Brazil to Chile to Colombia and Mexico, the connectivity gap between rural and urban areas is huge and won’t be easily bridged by even at the fastest network upgrade rates.
With all this in mind, the region's huge population and increasing connectivity demands from consumers and enterprises means 5G in Latin America offers huge possibilities for digital infrastructure companies. Technology has proven to significantly boost employment and sustainable economic growth in these markets according to OECD data with expectations of creating over 15 million jobs, boosting regional GDP by 7.7% and increasing productivity by 6.3%. Thet means the projected demand will incentivise telcos to invest into network upgrades to prepare for 5G rollouts, also opening the space to test new types of offerings on behalf of infrastructure and technology companies, from power-as-a-service to active sharing. While the scale and pace of 5G auctions and rollouts across Latin America may not be comparable to those seen in other regions such as Asia, Europe or North America, it is clear that digital infrastructure companies can expect a rapid increase in demand from both established carriers and new players in the market.
Argentina: 5G auction announced for June, but should we expect more delays?
After a series of delays, the National Communications Agency ENACOM in Argentina is pushing to hold their 5G spectrum auction as soon as possible. June 2023 has now been earmarked to be the earliest possible date. As per government projections, the 5G auction is expected to raise as much as US$1.4bn, but it remains to be seen whether consumer and business demands for 5G would be high enough to attract bidders. It has been widely speculated in the industry that the timing of the 5G auction in the long-troubled country may be related to the political cycle. The macroeconomic situation has been extremely challenging for a long time and in March 2023 Argentina's inflation rate soared past 100% for the first time since the end of hyperinflation in the early 90s.
Costa Rica: 5G auction to take place in 2023?
In April 2023, following a public consultation, the Costa Rican telecom regulator Superintendencia de Telecomunicaciones (Sutel) started the process of preparing for a 5G spectrum tender, targeting the second half of 2023 for the auction date. As part of this, Sutel is holding a public consultation to identify suitable bidders.
The auction will focus on spectrum in the 3.5GHz band, but the airwaves in the 2600MHz band may also be made available for bidding. However, there are still a few issues that need to be resolved before the auction goes ahead, including the recovery of unused and underutilised spectrum in the 2600MHz and 3500MHz bands held by the state-backed Grupo ICE, without which it will not be possible to take advantage of the economies of scale of the technology. Two private operators, Liberty and Claro, have expressed interest in acquiring new spectrum for 5G mobile services. Several other players, such as APM Terminals (a division of the multinational shipping company Maers) and a few local cooperatives, have publicised interest in the auction with the intention of implementing private mobile networks.
Chile: The regulator aims to auction additional spectrum
Chile held several 5G spectrum auctions from November 2020 to February 2021, with five firms applying for a tender, including all four main mobile providers, as well as a newcomer Borealnet, a consortium of US-based Rivada Networks and Business Finland. Chile’s four main mobile providers Claro, Entel, Movistar and WOM, have all won holdings in at least one of the available bands. In April 2023, Chilean regulator Subsecretaria de Telecomunicaciones (or Subtel) granted America Movil’s local subsidiary Claro authorisation to offer commercial 5G services via its 3.5GHz spectrum. Despite opposition from the three rival companies Entel, Movistar and WOM, the regulator assessed that having four operators in the 5G space would improve competition and provide a better experience for users. The 3.5GHz band is well suited for 5G, however Claro has been unable to launch a 5G offering in Chile because the band was restricted to fixed wireless use. This limitation has now been overturned by a court ruling. But since Claro did not obtain its spectrum at an auction, the operator is required to present a technical plan and an investment plan for connecting remote locations, similar to those presented by other companies at an auction.
Markedly, Chile’s regulator took a decision not to include rural coverage requirements in its 5G spectrum tender despite coming under fire for the omission from a local consumer rights group. The country’s undersecretary of telecommunications Pamela Gidi argued that fibre will be more effective at delivering connectivity to more remote areas than 5G. It was noted that affordability is frequently an issue in remote areas, and Subtel is considering a universal service bill, as well as subsidies. Indeed, the Chilean operators view 5G not as the most appropriate tool for connecting remote areas, but as an important technology for industrial uses, automating processes and applications such as IoT, with the business sector being its main client base in the future.
Uruguay: Claro, Movistar and Antel won 5G spectrum
Two of Uruguay’s existing mobile network operators – Claro and Movistar – were the sole participants in the 5G spectrum auction held by the regulatory unit of communications services URSEC on 9 May 2023. Each operator acquired 1×100MHz of spectrum in the 3.5GHz band, with Claro bidding USD28.10 million and Movistar paying USD28.05 million for the licences. One of the blocks has been pre-allocated to state-owned Antel. Each licence will be valid for 25 years. Rollout obligations include a requirement to deploy at least 70 base stations within a year, and at the end of three years licensees must have a minimum of two base stations in all of Uruguay’s 19 departments.
Colombia: 5G auction to take place in December
Colombia’s long-anticipated spectrum auction process has been announced to take place on 20th December 2023. The schedule was confirmed by the country’s Ministry of Information Technologies and Communications (Ministerio de Tecnologias de la Informacion y las Comunicaciones, MinTIC). In August, the ministry will publish its planned mechanism for the auction process along with technical conditions, entry requirements, obligations and guarantees. MinTIC will publish the final version of the resolution in October and will begin accepting applications from bidders on 10th November. A variety of local and international firms from different sectors including Claro, Tigo, Telefónica, WOM, ETB, OSC Top Solutions Group, Colombia WB Hots, Global Play, the Empresas Públicas de Medellín (EPM) group and EGC Colombia have indicated they intend to take part in the public tender. The non-traditional bidders are now waiting for a regulatory framework that makes it possible for participants other than telecommunications companies to access the spectrum. Several potential bidders have expressed their concerns about the price of spectrum given the state of the economy, and the investments that the deployment of infrastructure and technology could involve.
Mexico: Costs of the spectrum licences too high?
In January 2023, Mexico’s federal telecommunications institute Instituto Federal de Telecomunicaciones or IFT, launched a consultation to receive comments from industry and other stakeholders about a multi-band 5G spectrum tender in the country. The new tender is expected to assign the greatest amount of spectrum possible, especially for the provision of services in neglected or underserved areas. The regulator is also looking to include the unused spectrum. Earlier, in late 2022, authorities from the Communications and Transportation Commission and the IFT publicly called for the Ministry of Finance to lower the spectrum prices to facilitate the country’s deployment of 5G. The move is unlikely, and now due to the high cost of the frequencies, which is up to 186% higher than the international average, it has been rumoured that both AT&T and Movistar may sit out the auction. America Movil-backed Telcel is expected to be the only Mexican operator to participate in the 5G spectrum auction. No date of the 5G spectrum auction has yet been specified.
Dominican Republic: Additional 5G spectrum to be auctioned by 2024
The Dominican Republic was one of the earliest countries in the region to move into the 5G space, with the initial auction held in October 2021. More than $73 million was generated by the government as a result of the 5G tender withperators Claro and Altice winning spectrum allocations. Claro, the country’s leading operator with more than 58% of the mobile market, offered US$37,936.52 per MHz per year. This was the highest bid and permitted Claro to choose 70MHz in the 3.3-3.4GHz band. The operator’s total payment will be more than $53 million dollars for the 20 years it is permitted to use these frequencies. Altice, whose share of the market is more than 36%, offered $21,100 per megahertz and won 70MHz in the 3.4-3.5GHz band – that’s a payment of more than $20.6 million for a 14-year concession. The third mobile provider, Viva, which has 5.5 percent of the market, did not take part in the bidding.
In May 2023, the Dominican Telecommunications Institute Indotel announced plans to stage an auction of unused 700MHz frequencies. The tender is to be launched in the coming months and the auction process is expected to conclude at the beginning of 2024. The 700MHz frequencies were originally included in 2021’s 5G spectrum auction but failed to attract any bids. The administration has been focusing on the reorganisation of disused radio spectrum, so that it can be used to improve the coverage of the services offered by the providers in the national territory.
Brazil: The biggest economy and an early adopter
In November 2021, Brazilian national telecommunications agency Agencia Nacional de Telecomunicacoes or Anatel held the bidding for Brazil’s long-anticipated 5G spectrum auction, with the commitments totaling BRL47.2 billion (US$8.5 billion). Initially, 15 companies expressed interest in bidding. The country’s three biggest players - America Movil-owned Claro, Telecom Italia-owned TIM Brasil and Telefonica-owned Vivo - were the major spenders, although regional telcos and ISPs - including Algar Telecom, Brisanet and Sercomtel – also won licences, with a newcomer Winity Telecom bagging a significant holding in the 700MHz band. Since then, the non-traditional bidder, the Brazilian ISP Brisanet has announced delays in the launch of its built-from-scratch 5G offering into late 2023. In September 2022, a Brazil-based company Neko had its 5G licence revoked and is subject to an investigation of infractions committed by the company while holding the licence.
Under the licence conditions, the spectrum holders are obliged to build out coverage into areas with little or no connectivity. In addition, the 5G licence holders were obliged to have an operational 5G service in all state capitals and the federal capital by the end of July 2022, which the bid winners have been steadily implementing since the initial auction.
French Antilles: Operators awarded 5G spectrum in 2023
In March 2023, the French regulator Arcep awarded 5G spectrum to operators in French Guiana, Saint‑Barthélemy and Saint‑Martin, paving the way for next-generation connectivity on the islands. Spectrum in the 700MHz and 3.4GHz-3.8GHz bands will be available in French Guiana, Saint Barthelemy and Saint-Martin, while additional airwaves in the 900MHz and 2.1GHz bands will also be put to auction in Saint Barthelemy. In Guiana, the mobile network operators Digicel AFG, Free Caraibe, Orange Caraibe and Outremer Telecom were awarded spectrum in the 700MHz and 3.4GHz – 3.8GHz bands. There will be an additional auction for the remaining blocks of 5 MHz of spectrum in the 700MHz band, and the 3.4 – 3.8 GHz band. In Saint-Barthelemy and Saint-Martin, Dauphin Telecom, Digicel AFG, Free Caraibe and Orange Caraibe won spectrum in the same frequencies and are eligible for an auction of remaining frequencies as well.
Uruguay: Claro, Movistar and Antel win 5G spectrum
Two of Uruguay’s existing mobile network operators – Claro and Movistar – were the sole participants in the 5G spectrum auction held by the regulatory unit of communications services URSEC on 9 May 2023. Each operator acquired 1×100MHz of spectrum in the 3.5GHz band, with Claro bidding USD28.10 million and Movistar paying USD28.05 million for the licences. A further 1×100MHz in that band was also reserved for state-owned incumbent Antel. Each licence will be valid for 25 years. Rollout obligations include a requirement to deploy a specific number of base stations in the first three years, spread across all of the country’s departments.
Guatemala: Tigo and Claro acquire permits in Guatemala’s 2.5GHz auction
A spectrum auction in Guatemala, delayed for a number of years, finally went ahead in June 2023. Tigo Guatemala emerged as the biggest spender in the sale of 2.5GHz-2.6GHz spectrum held by the country’s regulator SIT (Superintendencia de Telecomunicaciones). The auction took place on 2nd June, with 126MHz of spectrum available across the 2500MHz-2550MHz and 2604MHz-2680MHz bands. The sale raised a total of US$48.947 million, of which the government plans to spend 75% on initiatives for improving connectivity. Tigo spent a total of US$32.236 million on the concessions, while its only competitor Claro Guatemala, spent US$16.711 million. The band is said to be suitable for both mobile coverage and fixed wireless use cases. These frequencies will probably be used for 4G services or higher – the 2.5GHz band is being used internationally for 5G services. The leading operators Claro and Tigo have already launched non-standalone 5G services in the country, taking advantage of their spectrum holdings and existing 4G LTE infrastructure.
