The Latin American telecommunications sector enters early 2025 amid both real and perceived turbulence. Many operators are navigating a transitional phase in which they are trying to rediscover their true identity — which is none other than responding to market demands. In other words, there is a battle between the pressure to increase investments and the desire to adopt a more conservative approach to launching new technologies.
This is especially evident in countries where, over the past four years — the post-COVID period — governments in power have assigned radio spectrum to drive the growth and adoption of 5G. The result is that many service providers, faced with infrastructure deployment requirements, are finding that the competitive market dynamics do not align with their initial expectations. They transitioned from the days when they developed business plans that justified their investment promises or the prices offered for the spectrum.
This situation can become even more challenging in countries where services are already struggling with a lack of sufficient radio spectrum or where spectrum assignments are tied to renewal processes that negatively impact the financial health of mobile operators. These operators, in turn, are being compelled to continue expanding 5G while also encouraging their users to migrate to devices compatible with this technology. This strategy has yielded mixed results due to the still-high cost of 5G phones compared to those of previous generations.
As if that weren’t enough, the growth of 5G networks is also putting pressure on fiber-optic and tower infrastructure providers, who must expand their coverage to provide the appropriate backhaul capacity for these networks. This service is itself undergoing a transition, driven by falling prices in the market for satellite-based broadband access and capacity transport.
The result is a kind of nightmare for regulators tasked with ensuring market competition due to the growing asymmetries in the sector. Just as high prices — in some spectrum cases — and infrastructure investments have strained operators’ cash flow. It’s also true that players with higher revenues and market share have been the ones to expand their networks most rapidly. They’ve taken advantage of their competitors’ inability to match these investment efforts in the short and medium term. 5G, therefore, becomes a kind of booster shot that strengthens the so-called dominant mobile operators in markets like Colombia and Mexico.
Of course, everything depends on the perspective from which it is viewed. For example, authorities across the region are well aware of the serious connectivity issues in their respective jurisdictions. These range from providing access to communities where none currently exists to educating people about the benefits of technology, developing e-government applications, and integrating technology into healthcare and educational services.
However, the challenge is immense and continues to require significant investment. Moreover, poverty in rural areas prevents many people — even in locations where telecommunications services are already available — from accessing them simply because they can’t afford to. In other words, connectivity is an issue that goes beyond the responsibilities of government bodies in charge of the technology and telecommunications sectors. Therefore, a holistic policy must be designed, one that complements coverage with initiatives to reduce poverty, increase service affordability, improve digital literacy, and promote the development of applications that enhance the efficiency of government services.
The primary challenge is persuading decision-makers to recognize that, to increase connectivity, poverty must be alleviated. It’s crucial to recognize that issues of affordability and the presence of basic civil infrastructure are more important to address first than the timeline for bringing telecommunications networks to new areas — areas that are often marked by high levels of informal employment, extreme poverty, and, unfortunately in countries like Colombia, Ecuador, and Mexico, rising insecurity linked to drug trafficking and armed groups.
It’s time to consider a new paradigm—one in which companies that have emerged in rural areas, such as the so-called wisperos in Colombia, cooperatives in Argentina, or ATIM members in Mexico, are recognized as key players in closing the various digital divides and driving connectivity. Governments must shift their strategy away from a focus solely on large national operators and adopt a more eclectic approach where all providers, regardless of size, play a role.
Ultimately, it is rural operators who truly understand the needs of their communities. Connectivity issues cannot be solved without addressing the demands of people living in rural Latin America. The traditional one-size-fits-all solutions dictated from Mexico City, Buenos Aires, Brasília, or Bogotá to remote areas must be revised based on feedback from rural regions. This bottom-up approach brings local voices into national decision-making.
The development of telecommunications and ICTs depends on initiatives aimed at eliminating poverty, improving civil infrastructure—such as roads and power lines—updating university curricula, and encouraging the state to adopt new technologies. Without a technological strategy that considers this foundational context, it will be very challenging to effectively plan initiatives that close the digital gaps still persisting across Latin America.
