Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
The telecommunications world is not without the phenomenal power of marketing, especially if the models being promoted are located thousands of miles away. It is for this reason that in private, many were surprised when the president of Argentina, Cristina Kirchner, received a recognition by the International Telecommunications Union for its “Conectar Igualdad” (Connect Equality) computer program that seeks to reduce the country’s digital divide.
The problem in the case of Argentine initiatives like Conectar Igualdad, “Argentina Conectada” (Argentina Connected) or regulation for the transition to digital television is not in the written text, the setback occurs in the method that has been selected for the implementation of these initiatives. Unfortunately, there is the highly political component (sometimes with hints of revenge against members of the opposition) on many of these initiatives. For example, the Conectar Igualdad initiative began delivering computers in schools that sometimes didn’t have an Internet connection capable of providing the required minimum speed that would allow 30 students to surf the Internet simultaneously. The program is distinguished by the lack of training for school teachers, which often limit the use of computers.
The bill that enables the digital TV transition in Argentina has also been considered as an example to emulate in many Latin American countries. It is for this reason that last July when the Argentine government announced the cancellation of its bid of 220 channels of digital TV it was a big surprise throughout the region but not in Argentina where the process was considered dead since birth. It was well known locally that the government was willing to pay for the licenses of many channels that would portray a positive image of the government on its transmissions, those who would impose their editorial independence found impossible to cover the established fees costs through advertising: thousands of dollars a month in rural populations of less than 25,000 inhabitants. In other words, an excellent written law that could not be implemented by clear partisan interests.
For the program Argentina Conectada I refer to what I said last year in the magazine PuntoGov of Buenos Aires: “Like any government initiative aimed at promoting the adoption of telecommunications services [Argentina Conectada] is theoretically a positive plan.” I still believe that as a tool to promote growth of broadband in the country the plan would be good for all Argentines. However, once again, reality shows that the plan is not designed to complement the coverage of existing operators in the country but to compete against them, not always providing services to areas that need them.
While the government continues its promotion of Argentina Conectada, three mobile operators in the country (Claro, Movistar and Personal) still require spectrum in order to continue its growth and innovate their service offering with the launch of LTE. The fourth player, Nextel, over the past months has seen its market position deteriorated since it lacks the necessary spectrum to migrate from its iDEN technology to non-proprietary technologies like UMTS/HSPA and/or LTE. All this is happening in a competitive scenario in which the government insists that operators must invest in infrastructure and innovate their services.
While countries like Mexico and Brazil have mobile spectrum caps of at least 80 megahertz, Argentina limits operators to 50 megahertz. Additionally, even though there has not been a mobile spectrum auction since the late 1990s, the government decided to cancel its scheduled “3G” spectrum auction. This action basically condemns Nextel Argentina to its disappearance. The Argentine government decided to allocate the spectrum bandwidth to Arsat, a state-owned satellite operator in charge of managing Argentina Conectada.
About ArSat in PuntoGov I wrote: “The selection cannot generate optimism ArSat to several market players due to the recent history of the satellite operator. The company was founded by the Argentine government’s interest to maintain control of the orbital position 81 º (which was close to losing) and maintain an national satellite operator. Since its founding the company has failed to fulfill many of their goals as finding a new partner or investor to enter the stock market. Against this background, many actors Argentine telecommunications market believe that ArSat lacks the experience to handle a project like Argentina Conectada and consider the role of satellite operator arises from a forced attempt by the government to justify its existence.”
Not everything that glitters is gold and Argentina continues to be the only country in Latin America with a telecommunications law written in 1972.
Jose F. Otero is president of Signals Telecom Group, his Twitter is @Jose_F_Otero
