Telefónica announces US$500mn investment in Venezuela

After winning spectrum in last week’s auction, Telefónica Venezuela announced investments of US$500mn over two years. 

The disbursement, involving US$250mn each year, will allow Telefónica to expand its 4G coverage and start deploying the 5G network, José Luis Rodríguez Zarco, president of Telefónica Venezuela told regulator Conatel. 

Last week, Telefónica won the bidding for the HH’ frequency block (2500-2600MHz) for US$37mn, according to local media. 

“This spectrum that we have obtained will allow us to reinforce all our 4G and, at the same time, be able to face the installation of 5G in all those points that we have been talking about with Conatel, which will improve the capacity of citizens; we will be able to deploy in many more places,” Rodríguez Zarco added.

The Telefónica executive also said the company will invest in the modernization of its technological platform, which has become obsolete.

The Spanish company did not provide further details about its plans in Venezuela. 

Last year, Telefónica’s Movistar unit said it was carrying out modernization and expansion works at 500 base stations in Caracas and Oriente, as well as expanding its footprint in 32 new areas of the country.

More investments

The participation in the spectrum auction and the announcement of new investments mark a new era in Venezuela’s telecommunications market after a decade of paralysis amid a difficult economic and political context.

“If this public-private relationship continues to exist, in which we understand each other perfectly, we will all grow, not just Movistar. If someone fails in the sector, we will all fail quite a bit, we all must keep going, this sector has to keep looking forward,” Rodríguez Zarco said.

After the Venezuelan government decided to remove price controls, mobile companies were able to increase prices and have more money to reinvest in their networks. The dollarization of the economy also contributes to healthier financials.

In addition to the investments announced by Telefónica, Digitel said it will deploy "the largest 5G network in Venezuela” with a total of 2,500 radio stations ready to upgrade to 5G. 

Nevertheless, companies need more time and cash to catch up with investments. “We still have a long way to go,” Rodríguez Zarco said.