Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Wednesday, October 10, 2018

Without much news, Government relaunches Telecommunications and Connectivity National Plan

Deputy Chief of Staff, Andrés Ibarra, reviewed measures adopted by the government to bring connectivity to all Argentineans, including the expansion of 4G, availability of the 450 MHz band to SMEs and cooperatives and the launching of credits with a subsidized rate for small and medium operators. The news was the change of the deployment schedule for 4G and the decrease in the wholesale price of Arsat mega, which will be US$10.

Three out of five of the initiatives highlighted yesterday by former State Modernization Minister and current deputy chief of staff, Andrés Ibarra, in what they called the presentation of the Telecommunications and Connectivity National Plan, had already been brought to the attention of the sector through different measures.

In an event held at Casa Rosada Museum attended by the entire industry and closed by President Mauricio Macri with a 4 minutes speech, the Digital Agenda was updated, having three axes: infrastructure, regulation and Digital Country. The new schedule for 4G connectivity expansion in 2,800 localities was launched with a roaming agreement among companies with the aim of covering 93% of the population by 2019 (which had been signed in the 4G tender in 2014 and which operators had not been able to meet due to delays in cleaning the 700 MHz band). It was also recalled that the 450 MHz band for rural mobile services was made available to SMEs and cooperatives (companies will have time until October 25 to submit their proposals) and the new credit line with preferential rate for access networks deployment and updating was confirmed. The amounts range up to US$500,000 per project (they plan to deliver up to US$12.5 million) through financing lines through Banco Bice and Banco Nación.

The main news were, in addition to the new 4G schedule, the creation of the single window at Ente Nacional de Comunicaciones (Enacom) and the decrease in the wholesale price of Arsat to US$10 per Mbps.

Spectrum and details. "We are performing the analysis by locality and it will be submitted to me during these days for me to draw my opinion thereon (...) we are seeing each origin, each term, each locality as it is," explained Ibarra, referring to how government will proceed with the surplus spectrum in hands of Telecom. They are 80 MHz that the company must return within a maximum period of two years. "We are going to tender it –when it is available- and there is also the Arsat issue that depends on the Short Law", he added about the rule that would be approved before the end of the year.

The official gave more details about the announcement of the change of schedule in 4G deployment: the technology will reach 93% of the population linked to 2,800 localities and 10,000 kilometers of national routes. That means that at least one operator will be in these localities and will make roaming agreements for the other companies to reach there; in this way, coverage of those localities that have not yet been served would be streamlined because the deployment schedule imposed in the 2014 tender was delayed. Ibarra explained that in cases where there are commercial problems, the issue will be studied and solved.

He clarified that in a meeting they held with the CEOs of the operators last Monday, Claro confirmed that it maintains investments for this year, Telecom told him that it keeps the number announced, but disbursement will take more time and Telefónica did not have information.

Repercussions. In the post-meeting talks, suppliers, operators and representatives of the chambers with whom Convergencialatina spoke can be summarized in the phrase "there was nothing new except the announcement to lower the price of Arsat wholesale megabyte from US$14 to US$10", Actually, the event was useful to review what was done by the Government as regards infrastructure, connectivity, regulation and digital government plans that were already known. The view on the process, overall, gives a more concrete idea of ??the guidelines fulfilled and drawn by the authorities.

The most critical view was given by Movistar sources which considered that Government is responsible for not guaranteeing competition conditions: Enacom considers that the merged company only has a prevailing position in those local markets where its broadband quota exceeds 80% of the share thereof, they said, something that collides with the provisions of multilateral organizations such as the OECD. Government's attitude, pointed out the company, allows the strengthening of Telecom as the prevailing operator that can give quadruple play and have 80 MHz of excess spectrum that can not be used by other players. Telefónica will continue, they announced, with formalities before officials and will go to Justice through the Federal Commercial Chamber. Neither is Telefónica's speech disruptive, but it comes to remember that it keeps its questions alive.

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