Despite the challenges, Latin America should go for 5G industry and the pandemic brings incentives to do so

Despite the challenges, Latin America should go for 5G industry and the pandemic brings incentives to do so.

The Mobile Economy in Latin America 2020 latest report projects 62 million 5G connections in Latin America by 2025, representing an adoption rate close to 10%. The possibilities of the 5G industry in the region are now a necessity and a priority for policy makers and the private sector.

COVID-19 has accelerated this recent trend of digital transformation. Lockdowns and closed workplaces forced people to work from their homes to mitigate the spread of the virus. During 2021 Latin America has become the worst-hit region of the world due to the increasing cases and deaths during the first five months and the low vaccination rates. In these times where the pandemic demands for better connectivity  “Rural connectivity in Latin America and the Caribbean: a bridge for sustainable development in a time of pandemic” showed that at least 77 million people in rural areas don’t have access to basic quality internet services and 32% (244 million people) have no access at all. This gap reflects the urgency of working on public policies for digital inclusion. A recent survey conducted by Ciena conveyed that 85% people from six countries in Latin America believe that 5G will help bridge the digital divide. 

“… It seems clear that increased demand for broadband can only help the 5G business case, especially in FWA for homes and businesses. Because of the pandemic, there is a clear need for digitalization of essential sectors such as healthcare, emergency services, manufacturing, and supply chain.” (Swain & Lopes & Agnese, 2020)[1]

But the question remains, what are the possibilities of implementing 5G in the region?

While Latin America has been focused on broadening the 3G and 4G connections, 5G starts to be a possibility with Brazil and Uruguay’s endeavour to launch its services.

Uruguay was the first country in the region to implement 5G technology in 2019. The state telecommunications ANTEL company along with Nokia launched the technological infrastructure that allowed the country to offer the 5G network. Nevertheless, this process was paralized when there was a change in authorities. However, in the past weeks Claro began technical tests in 5G in the 28 GHz band after receiving authorization from the Communication Services Regulatory Unit (URSEC).

In the case of Brazil, Despite President Jair Bolsonaro’s attempt to ban Huawei and the delayed auction of radio frequencies, it is expected that 5G will be deployed by July 2022. This will be a key factor in closing the digital gap and reaching communities in the Amazon region. This technology promises higher speeds, low latencies, increases in productivity and a positive economic impact in Latin American economies that are surfing the economic recession caused by the COVID-19 pandemic.

In spite of the fact that 5G is becoming a reality in Latin America, there are still some challenges that have to be overcome. Technology and new connectivity access should be one of the region’s priorities if it wants to become a strategic actor in the dispute between China and the United States. The international system is facing a crucial transformation, the unipolar power of the United States is shifting towards a multipolar system where China is one of the predominant players. Moreover, enterprises should take into account the digital transformation in order to stay competitive in the global market.

“Omdia estimates that 4G in Latin America is about 52% of lines and 3G about a third (as of year-end 2019). Even 2G remains important at 13%, and it will not disappear until well after 2024.” (Swain & Lopes & Agnese, 2020)[2]

On the other hand, some would consider that one of the biggest problems is that many countries still do not reach an ideal coverage of 4G networks. In fact, it is expected that only in 2025 4G technology will account for 67 percent of total connections, amid the withdrawal of 3G and 2G connections, which will account for 20 and 4 percent, respectively. Even so, the region should not ignore the potential of 5G and the opportunities for closing the digital gap. Governments should focus on broadening the already existing 4G connectivity infraestructures and develop a framework or policy in order to encourage investment in 5G by private enterprises.

Written by Lucía Belén Rossi. Argentine student (International Affairs, San Andrés University), Program Officer in CRIES (Regional Coordinator for Economic and Social Research) and OSINT researcher for Project Athena (Small Arms and Light Weapons in Latin America, FIU University)

[1] Swain, W. & Lopes A. & Agnese S. (2020, August). Why 5G in Latin America? A call to action for Latin American operators and policymakers. OMDIA and NOKIA.

[2]  Swain, W. & Lopes A. & Agnese S. (2020, August). Why 5G in Latin America? A call to action for Latin American operators and policymakers. OMDIA and NOKIA.

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