Spotlight: 5G's sluggish growth in Latin America

Delays in the rollout of 5G, along with the reliability of 4G and the lack of innovative services to justify replacing devices, are giving the fifth-generation wireless network technology a less auspicious start than expected, according to an analysis by Omdia in collaboration with Futurecom.

Latin America had approximately 47mn 5G connections in the first quarter, but its slow deployment is beginning to generate unwelcome comparisons with 3G, which peaked at 334mn connections in 2016, a dozen years after its launch.

It also took 4G about 12 years to peak, reaching 591mn connections at the end of the first quarter of 2024. 

“Latin America is lagging not only behind developed countries, but also other developing regions such as the Middle East and Asia in terms of 5G adoption,” Omdia consultant Ari Lopes said in a press release.

However, in the first quarter of the year, 5G exceeded 4G growth by one million lines, according to figures from the same consultancy released in July. The region added 9mn 5G connections while 4G added 8mn in Q1.

With tenders in Colombia and Argentina at the end of 2023, the region is experiencing a second wave of 5G adoption, following the first tenders held in 2021 in the Dominican Republic, Chile and Brazil.

According to the study, Chile is among the markets with the highest adoption of 5G with 29.3% of connections, followed by Brazil with 13.5% and Mexico with 11.7%.

Brazil and Mexico together account for 51% of all mobile lines in the region and 79% of 5G connections.

One of the first territories to develop 5G in the region, Puerto Rico, reaches 39.2% penetration of the technology.

But other major countries, such as Argentina, Peru and Colombia, are just beginning to implement 5G.

On average, 5G's share of total connections in the region is around 5.9%.

Omdia expects that by the end of 2024, approximately 14% of mobile connections in Latin America will be on 5G networks. The study says that adoption should reach around 55% in 2028, with a total of 477mn connections. That same year, 5G should account for 73% of the lines in Chile, 69% in Brazil, 63% in Mexico and 61% in Argentina, according to the researchers.

Recently, consultancy GlobalData estimated that monthly mobile data consumption per user in Latin America will increase from 6.2GB in 2023 to 13GB in 2028.

FWA

Mexican telco giant América Móvil has deployed fixed wireless broadband (FWA) over 5G in Mexico, Peru, Colombia, Brazil and Chile.

In Brazil, competitor Vivo launched 5G FWA in January, while Algar Telecom started offering the technology in April this year. In that country, there have also been 5G FWA launches or plans to launch by Brisanet, lez! Telecom and Ligga.

Claro Brasil connects 150 Bradesco bank branches with 5G FWA, while Vivo was chosen by Banco Itaú to connect a total of 100 branches with the same technology.

This week, state-owned operator Racsa announced the launch of 5G FWA in Costa Rica in partnership with Nokia.

BRAZIL

Brazil’s three largest operators, Vivo, Claro and TIM, are ahead of the 5G deployment schedule set out in the spectrum auction. New entrants Unifique and Brisanet began deploying their 5G networks in late 2023 while other ISPs that received spectrum plan to deploy in 2025.

In July, the 3.5GHz band was released, reaching 4,302 municipalities authorized to receive 5G autonomously, covering 90% of the Brazilian population.

By the end of 2024, all cities in Brazil will be able to receive 5G in the 3.5GHz band, one year ahead of the deadline set by the regulator.

AI

Another Omdia report presented at Futurecom expanded on consumer habits and the adoption of generative artificial intelligence.

According to the survey, Latin America is ahead of most developed countries in the use of generative AI with a usage rate of 73% compared to the global average of 66%. Brazil and Mexico stand out with a positive response rate of 76% and 70%, respectively.

The use of AI in telecom is still nascent, but Omdia forecasts the value of the AI software market for IT in the telecom sector will reach more than US$725mn by 2029, with a CAGR of 30% from 2024 to 2029, twice the global average.

According to a survey of 84 telecom operators, 19% of respondents said their organization has no active interest in AI. However, Omdia believes these responses do not consider the use of AI in some solutions that are already in use, such as chatbots, sentiment analysis, disconnection prediction, or fraud detection.

Of the respondents, 42% are actively discussing AI and 14% are testing the technology.