Latin America enters the 5G era with 15 million connections expected by 2022


5G becomes a reality in Latin America. There were launches in Brazil and Uruguay, and there are spectrum allocation processes in progress in Chile, and scheduled to begin in 2021 in Brazil, and potentially Colombia and the Dominican Republic. The latest GSMA report, “The Mobile Economy in Latin America 2020”, projects 62 million 5G connections in the region by 2025, which represents an adoption rate close to 10%. For that same year, 4G will represent 67% of connections.

5G capabilities, including higher speeds and ultra-low latencies, will allow for solutions tailored to various industries, enabling productivity increases that could be key to helping overcome the economic recession caused by the pandemic. This contribution will increase the positive impact that mobile technologies and services already have on the regional economy. In 2019, the mobile ecosystem generated 7% of Latin America’s GDP, a contribution of USD 421 billion in economic value and around 1.4 million jobs.

Three trends shaping the digital landscape

  1. The opportunity for specific use networks with 5G. There is a growing trend towards the deployment of private networks by companies in sectors such as manufacturing, mining and public services. Operators are looking to address the needs of these companies with customized out-of-the-box solutions, capturing the pioneers in Industry 4.0.
  2. The expansion of the Internet of Things (IoT) ecosystem. The IoT market in Latin America will reach 1.2 billion connections by 2025, driven primarily by the business segment, in particular smart solutions for construction and manufacturing. Operators are implementing IoT solutions in the automotive, high-tech and bioenergy industries, and cities such as Buenos Aires, Santiago, Medellín and São Paulo are implementing smart cities initiatives with IoT.
  3. The rise of fintech . Smartphone adoption will reach 72% in 2020 and 80% by 2025. This situation, added to other factors such as the low levels of banking in the Latin American population, have led to the emergence of a large number of fintechs in the region. In addition to providing the connectivity that underpins many fintech solutions, mobile operators are exploring opportunities to capture more value in the segment, and even venturing into direct investment in these companies.

Digital inclusion and preparing the ground for 5G

About 93% of the population already has mobile broadband network coverage, which reflects the investments made by operators over the last decade. Almost 57% of the population, 360 million people, will be connected to mobile internet by the end of 2020. The usage gap reveals the importance of working on comprehensive public policies for digital inclusion, especially given the growing demand for more and better connectivity as a result of the pandemic.

The report outlines a number of policy recommendations, including:

  1. Elimination of legacy frameworks and regulatory simplification.
  2. Dialogue between the Executive Power, the Legislative Power and the private sector for the construction of coordinated national digital agendas.
  3. Implementation of fiscal policies that encourage investment and the affordability of services.
  4. Long-term spectrum policy planning, focused on digital inclusion and innovation, rather than revenue maximization.

The report highlights the importance of the first 5G spectrum auctions in the region. It must be ensured that this resource is available in a timely manner, in sufficient quantity and at reasonable prices so as not to inhibit investments. The recommendations aim to make between 80 and 100 MHz of contiguous spectrum available per operator in the main 5G mid-bands (e.g. 3.5 GHz) and around 1 GHz per operator in high bands (e.g. 26 GHz). The lower bands (eg 600 MHz) are also crucial due to their better coverage.

The report “The Mobile Economy in Latin America 2020” was launched today at the opening of GSMA Thrive Latin America , the virtual event that from December 1 to 3 brings together policy makers, digital leaders and innovators from Latin America to explore the opportunities of emerging technologies and discuss the challenges to build a truly connected region. Topics to be discussed include IoT, cybersecurity, and leadership for connectivity, among others.

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