Telefónica mulls replicating Peru's rural mobile internet model in Ecuador, Colombia

Telefónica is looking at replicating Peru's shared mobile network project in Colombia and Ecuador.

"There are already interested investors" for a project in these two countries, José Juan Haro, director of public affairs and wholesale business for Telefónica Hispanoamérica, told BNamericas during the presentation of a report on the digital society in Argentina.

The Spanish telecommunications operator has a joint venture in Peru with Meta (formerly Facebook), Latin American development bank CAF and the IDB to offer a wholesale mobile network with 4G coverage in rural areas using open radio and transmission technology (OpenRAN).

At the end of 2021, Telefónica reported that the company Internet para Todos (IpT) would end the year with 2.4mn users connected in 13,485 rural areas of Peru, compared with 11,000 locations at the end of 2020.

Haro said that three operators currently use the IpT network.

When asked about the business model that the company would take to Colombia and Peru, Haro said that the concept of sharing is the same "but the model will always change from country to country because the networks are different, the realities are different and the starting point of our networks is also different.”

He pointed out that Telefónica's idea is to take this sharing concept to all the countries in which it operates. However, lots of changes are required. “Probably less regulation is needed. But, in addition, when one separates assets from a company, there are tax rules that can make it more complicated. That's what's happening today in Argentina,” he said.

"It's not just the issue of telecommunications regulation, but the legal framework and how attractive a mechanism of this type can be in each country," he said.

INVESTMENTS TO CONTINUE IN 4G

Telefónica confirms that its main objective in Latin America is to continue investing in 4G, which, Haro said, "is the one that has demand, use and profitability."

Haro explained that Latin America should not follow the path of accelerating 5G only through spectrum auctions, without taking into account other issues that the technology requires, such as access to terminals and content.

The executive expressed concern about governments seeking to launch 5G tenders solely for the purpose of generating tax revenue.

Speaking to BNamericas, Haro said that in Chile, where a 5G tender was held in 2021, the business case was made and it was decided to invest, "but effectively the adoption and effective use of these networks is going to take time." He admitted that the capacity created by the coverage commitments "isn't going to be used in the short term."

“Today, not only us, but the industry has deployed, but now we have to fill the network. Filling the network takes time and that's why I said, in the absence of regulation, where would we put the investments? And well, we would put that into continuing to grow the 4G network.”