Regional Update: The Reality of 5G in Latin America

What’s the True Status of 5G in LatAm? 

The arrival of 5G promises to be an essential enabler for the digital ecosystem. It could optimize user experience, digitize sectors like transport, health and education, and promote innovation in IoT that could dramatically changes our daily lives. 5G has been positioned by vendors as a more reliable technology that will enable a more connected and intelligent world; vendors have promised higher speeds and lower latency capable of supporting increased demand for data. And though daily announcements of 5G trials and agreements fill our inboxes,, policy and technical frameworks must be adapted to determine and regulate how operators can build, launch and monetize this new technology before it can truly hit the market.

According to a GSA recent “State of the Industry” report there are 201 operators in 83 countries who  have reported 5G trials or launches. In some developed countries, 5G may be a reality this year, but for Latin America and the Caribbean, 5G is not expected to commercially launch until the middle of 2020.

A 5G trial does not necessarily translate into readiness to deploy, though it does demonstrate a keen interest to invest and experiment with the technology. However, it’s still too early to determine who will be the 5G leaders in Latin America. To better understand the status of 5G, HIP spoke with industry experts in the region to discuss 5G readiness, its implications, and the main barriers and challenges inherent in its adoption and deployment.

5G in the Market: Potential Applications & Benefits

Eric Rodriguez, Technical Solutions Architect at Cisco, believes that the main differentiator of 5G is that it requires participation from more ecosystem players compared to previous generations of tech. Both private and public sector organizations will need to participate in 5G investment and promotion. Kin Cabil Mendieta, Operations Director at Solucionika (a telecom solutions integrator based in Mexico) points out that 5G responds to the rising data demands which other technologies have not been able to adequately fulfill. From mobile banking and eCommerce to connected cars and homes, the digitization of economies in Latin America has created a need for more automated services, which 5G can support. 

The Internet of Things (IoT) promises a variety of exciting applications for the future, but the technology also has use cases which could make a difference in the near-term. Smart cities, for example, are already in stages of implementation, with 5G as their foundation. In highly populated urban areas, such as those prevalent across Latin America, smart city initiatives have the power to help address urban issues like garbage collection and flood management; they may also help communities better respond to natural disasters, according to Mr. Rodriguez.

In rural parts of Latin America where there is little or no connectivity, 5G could potentially leverage microwave networks to extend services with low traffic, helping to close the connectivity gap. Mr. Rodriguez believes that in this regard, 5G can potentially provide a cost-effective wireless extension to deliver basic connectivity; nevertheless, there is no doubt that fiber will be required to take full benefit of 5G. Therefore, deployments will likely be concentrated in urban areas where there is adequate fiber infrastructure.


Bottlenecks & Challenges, and Proposed Solutions

Given that operators are already in the process of trials in Latin America, there will more than likely be a transition from 4G to 5G before 2021. Many service providers are already in possession of the required infrastructure and equipment to deploy, as vendors have wasted no time pushing the new technology across the region.

But even if operators are ready to launch, a lack of technical and commercial clarity may still cause delays. Operators need more technical precision, as well as sufficient spectrum for 5G.  And last but certainly not least, a clear business model to monetize 5G services must be defined−one which takes into consideration new market players and enterprises. And from a regulatory standpoint, there is still a lag in the policy framework, which must evolve to respond to technological advancements.

Latin America must also find commercial models to justify additional investment in 5G. Because 5G differs from previous generations of mobile broadband, it could benefit from B2B solutions as potential sources of monetization,. Commercial packages for enterprises could invite more participants into the monetization pool, like software developers and cloud service providers. Major players looking to mitigate infrastructure costs like  leasing wholesale capacity and network deployment are already looking to determine how 5G might lower their costs and expand service offerings.

Back to Reality

Latin America is a region where mobile services are still predominant due to improved network coverage and more accessible prices. The market will need to face global technology changes and prepare to the possible premature jump to the 5G era, where other technologies like 2G and 3G still in use and 4G investments still on the way.

While IoT and other cutting-edge innovations have become strongly associated with 5G, this does not necessarily mean that countries not yet prepared for 5G must fall behind. The Latin American Telecommunications Studies Center encourages countries with less advanced infrastructure to grow their IoT ecosystem by developing solutions using 2G and 3G technologies. While the evolution of 5G is important, it is also fundamental that emerging economies continue efforts to digitize using existing infrastructure.

Operators will continue to invest in trials and rollouts of 5G in major Latin American cities, where there are strong fiber networks and higher ARPUs.  Still, there are many barriers to overcome before there will be a more regional transition to 5G. Operators and governments will require more comprehensive and transparent tools to manage and understand network availability to determine their readiness for 5G.