Is Latin America ready for 5G?

The deployment of 5G base stations will be essential for Latin American businesses to remain competitive in the next 10 years. But the infrastructure needed to digitize the region in a decade poses many challenges. 

The benefits and opportunities that 5G can bring to the region were discussed at the 5G Switch Forum in Mexico City. 

The event was organized by Swedish telecom equipment maker Ericsson to celebrate its 115 years in Mexico.

Though all telecommunications business leaders and experts at the event agreed 5G is capable of boosting the private sector and improve connectivity, no one could assure the technology will become widespread in the region anytime soon.

Uruguay launched its first 5G network in April this year, and other countries such as Brazil, Argentina, Peru and Chile have plans to launch the technology in 2020. 

But with other social, political and economic priorities on government agendas, Latin America is unlikely to reach the digitization level of Europe and Asia in the near future. 

“Infrastructure is probably the most crucial topic of all, to be honest, and I’m not sure we’ve found the right formula to handle infrastructure in general,” Mischa Dohler (in photo above), director of the Center for Telecommunications Research at King’s College London, told BNamericas.

Dohler, who was a keynote speaker at the forum, provided several examples of the potential of 5G that ranged from long-distance surgery to virtual reality.

One of the benefits of 5G is its speed, which can be faster than 4G in sub-6GHz bands without having to install more antennas and spectrum. Also, it can supposedly surpass fiber optic speeds by up to 1,000 times.

And 5G offers more than just mobile connectivity: it can fulfill private mobile network needs such as loT, enable connected ecosystems to facilitate faster and more complex data processing, allow critical infrastructure control, better space management, control polluting emissions and manage activities in hazardous environments.

Digitization of Latin America

The digitization of industries in Latin America will open up a market with an approximate value of US$21bn in 2020 alone, said Ericsson’s president for northern Latin America, Elie Hanna, during a discussion panel. 

Bringing Latin America closer to 5G means digitizing the region, which also means investing more in telecommunications infrastructure and implementing public policies that make its deployment accessible. 

The infrastructure, investment and public policies needed to get Latin America to its best digital scenario possible in 10 years were broken down in a study carried out by ICT experts Raúl Katz, president of Telecom Advisory Services, and Sebastián Cabello, former head of GSMA Latin America.

The findings of the study, financed by Ericsson, were revealed on Wednesday to a small group of reporters in Mexico City, and BNamericas was among the invited few. 

According to the study, investment of between US$50bn and US$120bn in six of the region’s biggest economies – Argentina, Brazil, Chile, Colombia, Mexico and Peru – will be needed to reach the best scenario possible in a decade.

If that investment is made, the digitization of Latin America would boost GDP by an estimated US$293bn for all countries in the region. 

That amount, however, has got people thinking about the infrastructure disadvantages that the region has in comparison to other continents. 

For example, the number of base stations needed per country to reach the 10-year goal needs to increase 2-3 times. 

That means that by 2030 some 43,341 new base stations will be needed in Argentina, 150,027 in Brazil, 29,455 in Chile, 34,010 in Colombia, 77,353 in Mexico and 27,861 in Peru.  

“Within one antenna there can be base stations for 3G and 4G,” Cabello said, adding that with the estimate – and assuming that the first 5G antennas are tendered in the next two years – three of the region's most important cities will be connected by 2025 and by 2030 at least 15 cities will have access to 5G.

“Just today, the number of base stations in the United States and mainland Europe doubles Latin America's. And [base stations] in China, South Korea and Japan are four times what the United States and Europe have,” Katz said. 

The experts also said that Latin America needs the same amount of telecom infrastructure built in the past 30 years by 2030 – 30 years of infrastructure built in 10 years. 

But money and infrastructure are not the only factors needed to keep Latin America competitive in the future. 

“All this transformation is going to require the mobilization of different public policies. And we have identified five that are key to having mobile expansion that can get us to the scenario we are proposing,” Cabello said.

The study suggests five public policies that will be key to reach the 10-year goal: the stimulation of innovation and investment in the public sector, maximization of spectrum, removing administrative barriers to densify coverage, developing new methods of financing and creating an environment of privacy and security.

The experts also highlighted the need for governments to cooperate with the private sector, especially in scenarios like Brazil and Colombia where installing an antenna is very difficult and regulated. 

They cited the example of China, which subsidizes private sector companies interested in building new base stations.

Also needed in the public sector is an authority that can regulate other agencies and speak for ICT companies. The experts said a ministry “empowered” by the executive would be ideal. 

But bringing 5G to Latin America would also require users who are willing to pay for its high prices, although with greater demand prices should go down.

When asked about the biggest challenge to bringing Latin America to the digital age, Cabello said "spectrum."