Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Monday, February 01, 2021

Interview with Roberto Nóbile, CEO of Telecom Argentina

Telecom aims for an ecosystem of platforms

"We intend to continue investing on the 5G network when the technical and regulatory conditions are in place, but clearly it will be necessary for us to do a very tight planning to be able to deploy infrastructure, considering that the regulatory context, after the publication of DNU 690, interferes with the main sustainability variable of the business, such as prices," explained the executive.

<strong>Convergencia: How do you see regulatory issues after DNU 690 and its regulations?

Roberto Nóbile (RN): We observe the new regulatory scenario with great concern, based on the Decree of Necessity and Urgency N° 690/20 which determined that ICT services, that is, fixed and mobile telephony, Internet, cable and satellite TV, are considered essential and strategic public services in competition. A contradictory figure since public services are thus defined by their monopolistic, non-competitive nature; and that has no comparison with any regulation in the world.

With its regulation that determines a 5% increase, it directly impacts on the economic equation of ICT companies, putting at risk the quality of services, their development, their thousands of direct and indirect jobs and with irreversible consequences in many cases.

Prepaid mobile telephony (60% of lines) and fixed telephony have had the same price since November 2019. For the rest of the services, the last increase was in March 2020 and inflation in December was 30%. Telecom's inclusive connectivity plans reach 600,000 clients and more than 700,000 clients maintain their services even when they have up to seven (7) unpaid invoices.

Our sector is one of the most dynamic in the economy, and the one with the most possibilities of generating social and labor inclusion with quality jobs. We share the objective of achieving universality of access to all Argentines, and from Telecom we are working in this sense, but understanding that it must be the objective of a State Development Policy, for which the State itself already has other tools at its disposal.

The commitment of companies like Telecom must be accompanied by modern regulations, which incorporate the dynamics of innovation; that facilitate and promote investments and the deployment of infrastructure throughout the country, in an environment of clear rules and legal stability, which promotes investments.

Convergencia: Can you tell me about the company's investment plan for the next three years?

RN: It is not easy to have long-term planning when there are regulatory issues that have a direct impact on the sustainability of the business. The context of this year, with frozen prices, minimum prices and various difficulties in the pocket economy has challenged us to generate greater efficiencies and be more assertive in our plans that we will continue to develop in a modular and scalable way.

We reached great milestones on the path of transformation of our work dynamics, based on the learning incorporated in this stage. Along this path, we are developing products and services, with a focus on the digital and convergent customer experience. Initially our core business is based on connectivity and today it takes us towards an ecosystem of platforms. Based on the experience we already had with Flow, in the midst of a pandemic, we were able to launch, for example, the My Personal Business platform (in Spanish: Mi Negocio Personal), which allows us to create an online store for entrepreneurs and small businesses.

We have recently incorporated DISNEY+, as well as at the time we incorporated Netflix to the Flow ecosystem, and in the same way we will advance with any proposal that coincides with the value that we want to provide from Flow: we are committed to it being a comprehensive platform, containing competitive advantages over others, both for its content offer and for its differential functionalities.

Next year, we will continue along this transformation path, reaching new milestones towards the complete digitization of our operations to be more efficient, agile and digital, continue promoting the growth of the digital economy in our country and continue generating value for our clients .

Convergencia: Part of the Telecom networks are cable modems. Does this technology support a demand of, say, to give 1000 Mbps?

RN: At Telecom, we have the central technological objective of strengthening the integrated fixed-mobile network to achieve quality standards that our clients demand, with a continuous flow of connectivity, in permanent mobility and that allows us to  increase our ecosystem of platforms and applications.

We have a hybrid fixed network, with fiber optics and fiber-coaxial, which supports ultra-broadband speeds to reach more than 6.5 million homes.

Furthermore with the 4G network we bring mobile internet to all the capitals of the provinces and large cities of the country, with more than 1800 localities integrated into the network, which is now ready for the evolution towards 5G and IoT. We plan to lay fiber optics closer and closer to homes, unifying different access technologies to improve browsing speeds.

Convergencia: How would you describe the change in the flow of data traffic that moved from one day to the next from offices to homes? What would be the consequences of this change both from a network and commercial point of view?

RN: It was exactly like this: from one day to the next the whole country had to radically change the way of working, learning, teaching, shopping, socializing and entertaining.

For entertainment and connectivity companies like Telecom, it involved a huge effort and at the same time a great responsibility. During isolation, we recorded a 50% rise in data use on the home internet, with upstream peaks of 230%.

Companies in the ICT ecosystem enabled people and companies to remain active and productive during this period of mandatory social isolation.

At Telecom, we maintained a high performance of networks to respond to the needs of our clients, thanks to investments in infrastructure and systems, which in the last 3 years alone exceeded 3.9 billion dollars. And we also provide technological solutions to more than 170,000 large, medium and small companies and public organizations so that they can continue operating. We currently have the most extensive fixed-mobile network in the country, and we offer, through datacenters certified for their World Class quality, cloud solutions to protect and guarantee access to information from any device, at any time or place.

Convergencia: After the quarantine, much of the change in habits that you mention will remain and increase. What is changing in the connectivity provision business and how do you see your company in providing value-added services with those challenges?

RN: Virtuality is here to stay, in the new normality the face-to-face world is going to be complemented with virtuality and the digitalization of societies becomes even more relevant.

We have managed to face the pandemic context in 2020, not only by strengthening networks and systems to guarantee connectivity and sustain the increase in data traffic, but also by deploying our digital expertise to develop the new skills that are needed to inhabit digital life. Most of us have lived in recent months the exponential increase in virtual work meetings, and the consolidation of homeworking.

Homebanking and ecommeérce-based ventures have also evolved, which we from Telecom accompanied with the launch, as I mentioned before, of the My Personal Business platform. The growth opportunities of our business and the added value that we can offer today are closely linked to these verticals of the digital economy.

This year, the consumption of entertainment and gaming content exploded, for example, and it is a phenomenon that is also linked to the fact that we all had to spend more time at home. We believe that trend will intensify, even if we have completely passed ASPO.

The amount of content viewed on our Flow platform rose to more than 126 million, with a growth of + 35% compared to Q1-2020.

Convergencia: What expectations do you have about 5G technology in relation to implementation times, necessary investment, spectrum allocation?

RN: Advances in the digital transformation of Argentina, accelerated by the health situation during 2020, and the unprecedented increase in traffic volumes on networks, highlights the central role of connectivity in the new normal, but as a complement to services, platforms and applications, not only at the level of households and individuals, but also as an evolution in cities. A differential advantage that we have in Telecom, thanks to the investments made in infrastructure and systems.

On its own, 5G is an enabler. A platform upon which new services, use cases and ecosystems will emerge that, taken together, have the potential to change the world. 5G is really close and the availability of spectrum dedicated to this network will be required, coupled with a high level of dollarized investments.

At Telecom, we intend to continue investing to turn on the 5G network when technical and regulatory conditions are in place, but it will clearly be necessary for us to do a very tight planning to be able to deploy infrastructure, considering that the regulatory context, after the publication of DNU 690, interferes with the main sustainability variable of the business, such as prices.

For two years we have been testing fifth generation of mobile phones. Preparation does not only require 'turning on' 5G base stations: for good service we continue to improve the 4G network in coverage, availability and capacity. Today our 4G network covers 95% of the country's surface. And we continue investing in the 4.5G network, already active in 100% of the 4G network, and the prelude to offer 5G.

Convergencia: Does the use of 5G by the industry in general demand spectrum for use in the 4th industrial wave? How would the business of large mobile operators change this novelty?

RN: As I said before, 5G will be an enabler of businesses that are still being planned. At Telecom we are preparing and we have already evolved in:

    The deployment during 2019 of the 5G NSA (5G non standalone) functionalities in our Virtualized Core, preparing it for the deployment of      5G

    Updating of our entire mobile network, installing state-of-the-art equipment in each of the sites (antennas) that serve our customers

    The modernization of our transport network, one that interconnects all the components of the mobile network, so that it can support the        enormous traffic that it will have and with minimum latency (response speed) in technical terms. 

Both in the laboratories and in public “demos” carried out during 2019, our technical areas performed tests of all the technologies involved in 5G, to evolve Telecom’s networks.

Today we are already taking important steps in the IOT value chain, which is going to be one of the verticals that will make the greatest use of this technology. As an integrator of “end to end” solutions, we are positioning ourselves not only as providers of “Internet of Things” connectivity, but also offering value solutions for companies, for the connected family and smart cities.

This article was published in the 2020 Communications Atlas and Yearbook on Convergencia’s 25th anniversary.

 

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