The rapid uptake of new wireless technologies in Latin America and the Caribbean makes it inevitable to question where we might see the first deployment of the technology that will be finally known as 5G in the near future. Apparently innocent, this question really asks how many markets in the region are prepared for the arrival of a technology that will offer data transmission speeds exponentially higher than those experienced by today’s mobile user – above 1 Gbps.
The commercial launch of 5G in Latin America tacitly implies the availability of enough radio spectrum to deploy the technology, and the completion by mobile operators of a proper due diligence to estimate capacity demand. Hence, justifying the expansion of this type of network beyond commercial areas or high income households. A successful 5G launch would include an affordable price to initial high end consumers, leaving behind the questions about whether there will be enough demand for the new service.
However, the deployment of 5G would also require the availability of infrastructure that can support the amount of traffic that each antenna in this network must generate. In other words, when we talk about which geographies meet the conditions to receive a 5G network the answer provides two main scenarios. The first is comprised of small Caribbean markets with widespread deployment of fiber optics; the second scenario would limit the initial 5G deployment to big urban centers that have great capillarity of fiber optic city. In both cases, the availability of backhaul connecting the cell sites to the national backbone is an essential element.
Therefore, large urban centers such as San José in Costa Rica, Bogotá in Colombia and Monterrey in Mexico will join the eternal candidates for the launch of new technologies: Buenos Aires in Argentina, Sao Paulo in Brazil and Santiago in Chile. Names that contrast in size with those of Cayman Islands, The Bahamas or Aruba in the Caribbean Sea.
5G development will also mean an increase in the use of smart antennas and the proliferation of so-called small cells in places where large numbers of individuals congregate, for example, stadiums, shopping malls or public parks. The new mobile network will be accompanied by technologies that boost its performance, especially in two extremely important aspects: traffic offload and greater efficiency in radio spectrum usage.
From a commercial perspective, the initial 5G launches shall be accompanied by offers aimed at the enterprise customers, with corporate and government solutions that lower cost and increase efficiencies through the digitalization of the economy’s productive sectors. Furthermore, 5G’s low latency creates great possibilities for applications that increase efficiencies in medicine, energy or transportation.
The launch of 5G will have to consider all these options in order to justify a return of investment within a reasonable period of time. Long gone are the days where new mobile technologies had as its main role the renewal services of individuals interested in accessing new data services. We’re entering a new paradigm where machines are being transformed into most important and valuable customer of the operators, whereas mobile lines growth tied to human beings will closely resemble population growth, for 5G the Internet of Things provide mobile operators with a new largely untapped market.
Returning to the initial question, which country would host the first commercial 5G mobile network in Latin America and the Caribbean? Recent history – from 2G to 4G – shows us that every new mobile wireless generation, after its first global launch, has reduced its arrival times to the region. There’s no proof telling us that we shouldn’t expect this phenomenon to happen again.
Considering the importance of fiber optics availability for 5G, attention should focus on those markets with large amount of optical fiber distributed throughout its national territory, mobile users with rapid adoption rates of new technologies, and great pent-up demand for this type of service. Also important is the capacity that 5G may have to drive technological transformation in a specific market. It should not be surprising that smaller markets such as Uruguay or Barbados are beginning to stand out and position themselves as ideal for the arrival of 5G.
However, before identifying the regional markets for 5G commercial services, it is important to know which countries are competing for bragging rights as the world’s 5G pioneer. This exclusive group of is comprised of the United States, Russia, South Korea, Japan, China and several Scandinavian countries.
In the case of the United States, its four national mobile operators have promised the deployment of 5G starting within the next 18 months, hence, it should be part of their service portfolio of services by 2019. If the United States 5G deployment goes ahead as scheduled, there is little doubt that the first 5G regional launches would take place in the Caribbean. Specifically in the two unincorporated territories that the United States in the region: Puerto Rico and the US Virgin Islands.
Both territories integrate a single region during the FCC’s radio spectrum. Due to their high consumption and demand, Puerto Rico and the Virgin Islands have historically been part of the first phase of deployment of new mobile technologies by the carriers from the United States, for example, during 2011 to 2012 when LTE was integrated into the vocabulary of Puerto Rican mobile service users. To think that a national operator of the United States would launch 5G in that market without including in its first phases of deployment to Puerto Rico and in a subsequent phase to the United States Virgin Islands is to not acknowledge the competitive dynamics and profitability of the Puerto Rican mobile sector.
Nevertheless, the recent devastation of Puerto Rico’s and the US Virgin Islands’ mobile networks by hurricanes may present some challenges to this timeline if the launch date is close to 2017. Hurricane Maria stroke Puerto Rico during September the third week of 2018, decimating over 97% of its mobile communications network.
Although the private companies have collaborated fully in their effort to restore services by fixing each other’s equipment and opening their networks to their competitors subscribers, the inadequate response by both Federal and local government agencies have exacerbated the problem. Their initial inaction delayed the telecommunications companies efforts to repair their networks and without any protection from thefts of electricity generators or fuel. The territory’s government doesn’t seem to understand the importance of good communications during a disaster recovery effort.
The arrival of 5G in the rest of the Caribbean may occur in different phases, for example, the Regulation Authority for Electronic and Postal Communications (ARCEP) of France could influence the deployment of new technology in its overseas departments Guadeloupe, Martinique, French Guiana) and collectivities (Saint Martin and Saint Barthélemy. Elsewhere in the Caribbean, the business model and competitive dynamics of markets such as Bermuda, Cayman Islands, Turks & Caicos, and Barbados make them the main candidates to own a 5G network. Finally, one should never underestimate the Dutch speaking islands of Curaçao and Aruba, as they have always positioned themselves among the most innovative markets of the Caribbean.
Looking to the South, Uruguay could be the first independent country in Latin America that could announce a 5G deployment strategy in the short term. This does not discard that there are «island type» launches of 5G in urban centers, which, as described above, meet the necessary conditions to support a 5G network. Under this scenario, the protagonist for the early “island-type” deployment of 5G should be Brazil, a country whose universities are working with different industry players in the development of 5G.
Regardless of who is the first market to launch 5G in Latin America and the Caribbean, the launch will make possible greater digitization of the economy’s productive sectors and increase the use of information and communication technologies (ICT) in the promotion of economic and social development. At the end of the day, technology must have an inclusive role that benefits the population; this cannot be achieved if countries do not have a healthy environment for their development. A development that requires people trained in everything related to the deployment and evolution of different technologies.
The latter is a task to be fulfilled by Latin America and the Caribbean’s existing higher education centers.