América Móvil wants ‘fixed 5G’ as broadband alternative across LatAm

After going live with 5G networks in dozens of cities in countries like Mexico and Brazil, América Móvil has given more insight into its plans for the new technology and how it sees 5G being monetized across Latin America. 

The region's largest telecom group confirmed that it will deploy 5G for both fixed and mobile operations, potentially in every market where it operates with 5G spectrum. 

“Yes, we're going to do 5G for fixed and we're going to do 5G for wireless. We’ll have an infrastructure roll-out program for 5G that includes being in phones and also in fixed,” CEO Daniel Hajj told analysts and investors in a Q2 earnings call.

The use of 5G for residential internet, known as fixed wireless access (FWA), has long been touted as an interesting option for telecom operators, especially for areas where getting premises passed with fiber is not easily done.

For consumers, it is also a possibility of cable-free home broadband. With the FWA model, instead of having cabling to link the household, the client simply uses a set-top box that distributes the outdoor 5G signal internally, like a Wi-Fi router. 

The problem, however, is that this type of hardware, or customer premise equipment (CPE), is still seen as expensive by most carriers, making the model economically unfeasible for the moment.

However, according to Hajj, América Móvil already has 3mn FWA customers, including its operations in Europe (Austria). 

The CEO also made it clear that América Móvil will not opt for a single model over another. “With the fiber plus the 5G we expect to provide a good experience to our customers,” he added.

Specifically talking about Brazil, he said that the carrier will continue to deploy fiber in Brazilian cities – the company claims to take fiber to 24 new cities each quarter – but that its goal is to have 5G as an option for fixed clients, depending on conditions such as plans, network availability and neighborhood characteristics.

Although other telcos have expressed interest in FWA, none of them has ever presented a clear strategy to use it. Most have been studying the format or doing trials, but costs are still cited as the main hurdle.

América Móvil thus becomes the first major telco in the region to be clear about the business case for FWA and marketing 5G as an alternative to fiber for clients.

MOBILE 5G ROLL-OUTS

In mobile, the company sees 5G roll-outs accelerating in Mexico and Brazil until the end of the year, but implementation of the technology taking longer in Chile and Colombia. 

“In Mexico and Brazil, we’re going to have a good roll-out by the end of the year,” he said.

The company claims to have 5G active in 40 cities in Mexico through its Telcel subsidiary. The carrier sees ARPU increasing there, fueled by upselling and moving users to 5G plans. “5G plans give you more, but you have to pay more,” Hajj said.

In Brazil, its pure, standalone 5G service in the 3.5Ghz band was just activated in capital Brasília, with the launch expected to take place in the coming days or weeks in Porto Alegre, Belo Horizonte, São Paulo and João Pessoa.

In Colombia, the government is yet to assign 3.5GHz frequencies for the technology.

In Chile, where its brand Claro was one of the winners of the spectrum auction held in February 2021, expansion is going to take a “little bit more.” Claro, which was only awarded spectrum in the 26GHz band, has not yet carried out a commercial launch in the mmWave band.

Hajj also said América Móvil is expanding its coverage in Peru, where Claro has 3.5GHz licenses for mobile and FWA services.

In mobile, the service is active is certain areas of capital Lima and Cañete province. In FWA, it operates in in Asia district, Santa María, Mala, Lurín, Chaclacayo, Cieneguilla and Santa Eulalia.

‘NOT DOING WELL IN CHILE’

The CEO admitted that the company is “not doing well” in Chile, although it had a good quarter in terms of wireless.

Hajj expects Claro Chile to make gains in market share in mobile in the coming quarters, stressing that the subsidiary needs to “do more on the commercial side.”

On the Chilean JV with Liberty Latin America’s VTR, Hajj commented that there is “not much to say” as the deal is moving forward and approvals are expected to be obtained in the fourth quarter of this year. 

With respect to the Brazilian mobile market, Hajj said that Claro is doing well with the integration of the share of Oi’s mobile customers it absorbed and that a good number of them are opting to stay with the firm.

“There are more Oi subscribers coming to Claro than leaving. It’s early to say, but we’re confident. I think we’re going to get more subscribers than we’re going to lose,” he said.

ISPS AND TOWER SPIN-OFF

Hajj sees fixed broadband competition as particularly intense in Brazil and Colombia, mostly due to the strong presence and growth of internet service providers (ISPs) in those markets. 

However, he believes América Móvil is well-positioned considering its size and structure, and because it is able to offer multi-play services (telephony, mobile, pay-TV and internet).

The CEO also sees ISPs having more difficulty financing fiber roll-outs in the next three years, compared with the last three, whereas América Móvil would have more financing options and capabilities.

With respect to the spin-off of its tower business, Hajj expects the group to obtain regulatory approvals in all the main markets by the end of the third quarter.

Finally, the CEO confirmed the previously disclosed guidance of US$8bn in capex for full-year 2022, with the same amount planned for 2023. Increases are still possible, but in relation to spectrum acquisition, he said.