Mobile Communications

Argentina is playing catch up in the 4G race

Argentina is moving on to its next stages of rolling out 4G across the country. In mid-June, the Argentinian telecoms ministry Secretaría de Comunicaciones (SeCom) awarded airwaves in the 700MHz band to three telecoms – Movistar (owned by Telefonica), Telecom Personal, and Claro (owned by America Movil). Argentinian broadband provider Arlink also received 3G and 4G frequencies. The bidding process for the frequencies was completed late last year, totalling $2.23bn, which exceeded expectations.

“This strategic decision of the Federal Government will allow all users in the country access to a mobile service better and faster,” said SeCom.

Argentina’s need for faster services has been growing. Companies like Movistar have been pushing for greater connectivity and speeds in Argentina in the hopes of catching up with the pace of mobile technology on other continents. For instance, Japan and the EU are already working together on 5G while South Korea has scheduled its 5G networks for 2018. Movistar and Telecom Personal both claim to have 500,000 clients each capable of using the 4G networks at this early stage.

Many of Argentina’s South American neighbours have long beaten the country to the punch on releasing 4G lines. Brazil, Chile, and Bolivia to name just a few already have 4G lines in operation so why has Argentina lagged behind?

The main reason is political rather than a lack of infrastructure, which is a result of government policies, says Rodrigo Angel, regional director of Latin America at B2X, a consumer device repairs firm.

“Many local and international firms based in Argentina have delayed plans for expansion or the adoption of new product lines until the economic climate and regulatory regime become more clear, consistent, and predictable,” he says. “Limits on profit, royalty, and licensing remittances have also discouraged new investment in Argentina.”

“Non-automatic import licenses (NAILs) were ended in late 2012 for all but a few products,” he adds. “However, a regime erected by the Government of Argentina in February 2012, whereby all importers are required to request approval from the Argentine Tax and Customs Authority (AFIP) prior to making each purchase for imports abroad, is still in effect and constitutes for sure one of the important road blocks to expand the mobile network in Argentina.”

Efforts to make Argentina more hospitable to mobile networks continue nevertheless but so do many challenges.

In 2014, the Argentinian government finally passed a new law, Ley Argentina Digital, which replaced an older, out-dated ‘70s law that lingered in effect for too long. This accompanied the introduction of the regulator AFTIC. Both these moves are aimed at getting all aspects of telecom and digital services in Argentina up to speed. Ley Digital Argentina even requires telecoms to begin offering TV services too but currently these companies do not have enough bandwidth to offer all of these services. Telecentro is the only provider offering a “triple play” (landline, internet, and TV).

Mobile will remain a key area though. Argentina’s mobile market is set to continue growing, according to Gustavo Fontanals, a local media researcher speaking with the Buenos Aires Herald. However, rural areas will be much slower to see the roll out of faster mobile internet services with the larger urban areas most likely first on the list. Open Signal maps, unsurprisingly, show very concentrated network services in the north of the country around Buenos Aires while it peters out the further south you go. Telecom Personal says it wants to reach 35% of the country by the end of 2015 and this includes strategic areas like Córdoba, Rosario, and San Miguel de Tucumán all in the northern regions of the country.

The south of Argentina has been notoriously under-serviced. The government has tried to create a tech hub in the region, even locating device manufacturing facilities in the country’s most southerly point, Tierra del Fuego, a curious choice. As a result of the area’s remote location and the fact that most shipping of parts comes into Buenos Aires, prices can soar while retailers are subject to levies for selling devices like smartphones that once again to lead higher prices.

Strangely, this pricey mobile phone market could actually lead to further growth in the market for mobile phones, says Rodrigo Angel. Despite government restrictions, the country is attractive for a mobile carrier as Argentinians that have the money are already willing to pay a lot for a phone.

“Their local market absolutely will continue growing, not as fast as they could because of the mentioned restrictions,” says Angel, “but will continue growing because locally the mobile companies in Tierra del Fuego are trying to assemble or produce as much as they can to fulfil their local market requirements. So Argentina will continue to be an important player.”

To do all of that though, Argentinian consumers will need the fastest services just like everyone else.


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Jonathan Keane

Jonathan Keane is a freelance journalist, living in Ireland, covering business and technology

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