PUBLISHER: BuddeComm | PRODUCT CODE: 1075424
PUBLISHER: BuddeComm | PRODUCT CODE: 1075424
Latin American countries make progress with national broadband infrastructure
The fixed broadband sector in South and Central America has made great gains in recent years, supported by various efforts among government agencies, regulators, and other policy makers to increase broadband penetration.
For the government, higher take-up of services provides an opportunity to improve economic productivity and generate growth in GPD. The varied social benefits of broadband adoption are well known, and thus social inclusion, as well as reducing the digital divide between urban and rural communities, forms the cornerstone of government-sponsored national broadband strategies.
For national regulators, the focus has been on implementing policies which encourage investment among private operators. In some of the more rural areas of the country, which are considered commercially unviable, the national regulator is generally the authority charged with disbursing public funds to ensure that internet services are available across the country. The mechanism for doing this lies with the numerous universal service schemes operating across the region, to which the telcos contribute via levies based on their revenue, as also from licence fees and other related sources.
There remain many areas where poor fixed-line infrastructure has been the result of historic under-investment, than of topographical challenges. In these areas the emphasis has been on improving the availability of mobile internet and satellite internet services.
The convergence of mobile and fixed-line services, and the growing popularity of OTT delivered content, has encouraged operators themselves to invest in infrastructure in a bid to develop their bundled service offerings, and so attract new customers and reduce churn. The creation of integrated mobile and fixed networks enables providers to offer a full portfolio of services to customers while reducing operating costs.
There remain wide differences in broadband penetration among the countries of the region. Some such as Uruguay, Argentina, Mexico, Costa Rica, and Brazil have the highest fixed-line broadband penetration rates in the region. By contrast, countries including Paraguay, Peru, Guatemala, Nicaragua, and Venezuela have penetration rates which are particularly low.
Improved international connectivity has played an important part in the overall picture, with higher bandwidth leading to dramatically lower access costs for consumers, which in turn has encouraged broadband adoption among the lower socio-economic demographic.
Important new developments in the submarine cable sector include the 2,500km Malbec link between Rio de Janeiro and Buenos Aires, providing onward connectivity to the US. This was completed by GlobeNet and Facebook in June 2021, and is now tied into GlobeNet's wider network which also reaches to Venezuela, Colombia, and Bermuda. The new cable doubled the capacity available to Argentina.
Google in mid-2021 began building the Firmina cable running between the US and Argentina, with landings in Brazil and Uruguay.
Much progress has also been made with domestic cable infrastructure. In December 2021, the government of Chile combined with Gtd Teleductos to open the 3,500km Prat submarine cable, offering numerous landing stations between Prat system on the far north coast to the main town of Puerto Montt to the south. Chile in early 2022 also completed the 4,500km Fibra Optica Austral cable system, running from the Los Lagos region to the Magellan region, and to Chilean Antarctica. The system benefits some 530,000 people in the south of the country and relied on government subsidies to compensate for the low return of investment for private firms.
These and other international cables are tied to expanding national cable networks across the region. By vastly increasing international bandwidth, the several efforts have helped reduce wholesale charges and thus the retail costs for end-users. In turn, this has encouraged the wider take-up of fixed-broadband services as well as provided backhaul for mobile data services. The improved fixed-line connectivity can be seen in the sharp increase in the number of fibre broadband subscriptions in numerous markets in the region.