What's next for Uruguay's broadband market

Uruguay's broadband market is about to become more dynamic with the authorization for cable operators to compete and the decision of state-owned company Antel to open its fiber optic network.

The internet market in Uruguay was worth 19.8bn pesos (US$490mn) in 2023, according to regulator Ursec. The country has 1.09mn fixed broadband lines, 99% of which are in the hands of Antel.

Competition is expected to grow with cable operators and other private sector players contracting Antel's wholesale fiber optic services.

Antel's resolution would allow cable operators and mobile companies such as Claro and Movistar to access Antel's fiber optic network.

Movistar and Claro compete with the state company in mobile services, where the Spanish-owned group has a 23% market share followed by América Móvil’s Claro with 17%, according to the latest data from Ursec as of the end of 2023. The rest of the market is in the hands of Antel.

Since television operators were authorized to provide broadband services in 2022 – and confirmed in the new audiovisual services law – some 50 companies have requested a license.

In turn, three operators from the city of Montevideo – Montecable, Nuevosiglo and TCC – submitted an application this year to operate jointly in a consortium, as a way of preparing to compete in the market.

Together, the three operators have 94,222 subscribers out of the 496,127 in Uruguay. Of the total pay-TV accounts, 176,761 or 36% are in Montevideo.

As of December 2023, the number of Montecable customers totaled 29,130, while TCC (Tractoral) registered 33,282 and Nuevosiglo (Riselco) 31,810.

Antel has a fiber optic network that covers 95% of the Uruguayan population.

According to Ursec, by the end of 2023 there were 12,485km of optical fiber installed in Uruguay.

RESISTANCE

The opening of Antel's networks had been left out of Uruguay's new media law due to resistance from some political and union groups.

While Antel is expected to receive compensation for the use of its network, the measure was criticized because it would negatively impact state revenues due to increased competition.

The PIT-CNT workers' confederation and the Sutel telecommunications workers' union quickly spoke out against the measure taken by the Antel board of directors.

The decision to offer the network on a wholesale basis implies “giving away the public investment made to the competition, as well as providing them with the most favorable tools and conditions so that they can compete with Antel itself,” Sutel said.

The union said the decision would negatively impact the US$400mn in revenue Antel receives from residential data services.

"We emphatically reject the resolution of the board of directors, leaving Antel in a situation of great weakness for the present and for the future," said PIT-CNT.