This year LATAM Mobile 360 was held in Buenos Aires, Argentina. It brought together more than 1,000 participants from all over Latin America, making it the biggest event in the LATAM telecommunication industry of the year.  As the G20 was held just prior in Argentina, digital and women’s inclusion were both discussed in a few sessions.

LATAM Mobile 360 brings together regulators, carriers, and technology providers to discuss important industry topics. The main themes discussed during the event pivoted around the future of the telecommunications business, IoT, 5G, cybersecurity, and new technologies such as AI, VR, etc. There was also a space, called 4YFN, aimed to connect start-ups, investors and companies, acknowledging that startups might be in the best position to provide adequate content for the local users.

Operator-Carrier Business Model Changes

Much of the discussion pivoted around how operators’ business models are changing. Increasing competition, changes in the ecosystem, and the need for new business models are among the top topics discussed throughout the conference. Telecommunication industry margins are getting tighter, and this is forcing operators to change the way they are doing business.

One regional operator admitted that operators are still working in an “analog” era when they should be migrating to “digital”. However, this condition could characterize many of the operators in LATAM. Changing this would require a great deal of resources but carriers are not yet ready to do so.

Most operators did not give clear guidance about when they plan to launch 5G. The reason behind the lack of visibility is that 5G needs to be funded by 4G, and the current 4G technology network investment has not yet paid off. The boldest statement was from Telefonica who plans to start commercializing 5G technology after 2021.

Regulatory Concerns

Regulators are gearing up for IoT and 5G technology, they were both big topics of the conference. For example, Argentina has just allocated the 900 Mhz frequency to be used as a none licensed network. It will provide internet access for small towns with populations under 10,000 people. This spectrum is intended to help connect the unconnected.

There has been a lot of discussion in the region regarding municipal level bureaucracy to set up antenna sites. Many municipalities in the region are imposing a great deal of red tape that has long drawn complaints from operators. These municipalities see operators as an opportunity to collect extra money from, while operators are urged to fulfill regulatory required coverage. To help in this situation, some central governments have imposed a mechanism to decrease the local bureaucracy. For example, the Colombian national government in 2009 approved a law that obliges local authorities (of 1200 municipalities) to help the network deployment effort. However, the results of the law has been lackluster.

Regulators acknowledge the need to manage new technologies, such as AI, blockchain, robotics, cryptocurrency, etc. The Colombian regulator admitted that they usually have an ex-post approach, rather than ahead of the technology. Most LATAM markets have a digital regulatory agenda, but some markets such as Chile are ahead of all the other countries in LATAM.  Chile has been actively working on regulations that would bring more certainty to those seeking to invest new technologies for example.

Red Hot Issues

Cybersecurity was another important discussion topic. According to the mega-operators, America Movil and Telefonica, LATAM’s internet usage growth is similar to that of other geographic areas. This usage requires more security to protect all data exchanges.  However, most of the LATAM companies are not spending enough on security, as it is sometimes difficult to convince the CFO of the ROI (Return on Investment) of such investment.

When discussing Emerging Technology Opportunities, Claro’s Argentina CEO said “In LATAM we adopt trends, we do not set the trends. Its success depends on who is launching it more successfully.”    This phrase can summarize the LATAM market when it comes to adopting new technology. For many markets, the major roadblock is the exchange rate instability. Sometimes it is too expensive to adopt new technology, other times the exchange rate changes sharply between the time a new technology project is set up, to the time the tech gets launched.

The conference also showcased new global platform companies that are seeking to enter the region, such as Pundi, a cryptocurrency company which showcased the first blockchain call in LATAM. Local entrepreneurs that are currently serving the local market are also beginning to expand their presence in the global market.

Another major subject that continues to stand out was the high tax burden in many LATAM markets. This was a major complaint among most businesses, as in markets such as Argentina or Brazil, taxes represent more than 30% of the overall telecommunication spending cost.  This tax load has an impact on the affordability of telecommunication products and services for the end user.

Despite all the issues mentioned above, LATAM is still a very attractive region to those who are seeking iinvestmentopportunities. According to GSMA, there is still a $5.7bn operator revenue growth opportunity for the region. Recent political and economic instability has placed the region behind most others in updating its technology.  However, it is still working to catch up.