LTC 18 – Day 3 – June 13th 2018, Governments must assure inexpensive access to frequency bands to drive investment
Varadero, Cuba. The frequency band spectrum, the data market, the UN’s sustainable development goals, investing in fiber optic’s networks and the digital transformation were the main topics during the third day of the American Telecommunication’s Congress CLT18.
The frequency band spectrum is a finite resource that is esencial for operators to continue expanding networks and to offer new solutions. Thus, it should be accesible at a reasonable price, stated Lucas Gallito, from GSMA.
Verena Weber, an OECD economist on Internet issues, highlighted the importance of the frequency bands of the spectrum in transforming digitally all sectors of the economy, whether it is the power and fuel sector or wether it is health or agriculture.
Bruno Soria, associate director at NERA, explained that the price of the frequency bands should be “real market price for an operator, where there is room for reasonable profits. Any price excess may compromise the business plan of operators”, he pointed out.
Operators in Latin America face essentially three problems when allocating frequency bands: that annual rates are too high (like Mexico’s case), that there are artificial frequency band shortages and that there are inadequate awarding rules, he complemented.
Tiago Machado, Director of Government and Industry Relations at Ericsson, added that expected data demand for 5G shall press operators even further to acquire frequency band spectrum; not only pressed by user creations, but also given the number of Apps. In Latin America Latina there are spectrum allocations of 600 MHz, but in the future with a five year horizon, they will need up to ten times more frequency spectrum in these millimeter bands. To see more details on what was said about the role of frequency band allocations of the spectrum query Mediatelecom
José Manuel Mercado, Principal Business Consulting at Huawei Technologies for Latin America and the Caribbean, informed that by 2022 the telecom sector should close around 1.54 trillion dollars, with a strong push for mobile broad band, which should grow 72 %, while income for fixed broad band should surpass that of TV. In Latin America Latina the sector should gross some 129 billion dollars in income by 2022, driven by mobile broad band with 74 % growth.
In spite of that, Mr. Mercado cautioned that the sector is “under a diminishing returns’ stage”, presenting a new crossroad for growth in the sector.
The main strategies that operators may pursue include monetizing mobile broad band, promoting cloud computing businesses, increasing fiber optic’s networks as means of access and executing digital transformation projects in in-house operations.
In as far as data markets, new technologies in all areas of our lives have enable new access constantly to all sorts of data in real time on virtually any activity, which creates a new digital economy. Although exploiting new data means an important opportunity for the economy, it also implies new risks in terms of transparency or in terms of potential improper use of data.
Ezequiel Domínguez, head of Europe and Americas at Cullen International, considered that the countries in the region face challenges in developing a data economy. The are: privacy, which is “essential in building trust”, cyber security, transparency and algorithms, which “evermore make more and more decisions”, laws on fair competition “to regulate the new domain of data ownership”, data portability “as a new user right”, and cross border transfer of data “to be able to exploit economies of scale”.
Germán Darío Arias, director Colombia’s Communication’s Regulatory Commission (CRC) argued that the State does not loose any power in the digital economy. What it does is “to make it a smaller and more efficient economy”.
In spite of the growing demand for data services, telecom operators report constant contraction in their income, while needing to continue to expand networks and new technologies.
Fran González, an analyst at Analysys Mason, pointed out that the sector is undergoing income reduction for voice services, with income decreases per user (i.e. ARPU) at a rate of 3 per cent.
Likewise, in the other side of the coin, messaging services show high substitution phenomena towards OTT providers; while the video segment, although growth is based on VOD, where substitution is less evident and more complementariness is seen.
Héctor Huici, Argentina’s ICT, coincided in the tendency to decrease ARPU’s, which may harm operator’s investment capabilities; some difficulties may be overcome thru market consolidation. He considered that tariff collection for frequency band allocation of the spectrum is not an element that artificially raises costs.
Robert Pepper, Global Connectivity and Technology Policy at Facebook, pointed out that the most difficult part of doing business for operators is “the transition from being companies created and designed to be voice companies and now having to become digital data companies”. Read more @ Mediatelecom
Bruno Ramos, Regional Director for the Americas Regional Office of the International Telecommunications Union (ITU), considered that the region still faces challenges to achieve the UN’s sustainable development goals. However, he highlighted that there are strengths as well: “we have to work in terms of finding solution to these layers of needed innovations”.
In turn, Enrique Medina Malo, Chief Policy Officer at Telefónica, stated that its good policy for us to adhere to ODS, since “governments, companies and different economic structures must participate and they must raise awareness among civil society”.