With the "new" dollar, which is already around $ 45, are the investments of Telecom, Movistar and Claro jeopardized? Will the use of mobile telephony be affected in the short or medium term?
The answers to these questions not only concern (and occupy) the Government - for the hundreds of millions of dollars of disbursements at stake - but also the ordinary Argentines, intensive users of the services provided by the "telcos".Although the companies claim that the compromised plans will not undergo modifications, the problem is that now -with the current price of the green ticket- the amount involved may be insufficient to execute everything planned at the beginning, back in 2017.
The Government intends that by the end of this year, 4G coverage will reach 93% of the population. But, in the eyes of the experts, the decision of the companies not to modify their budgetary items (in pesos) after the devaluation, clashes with the expectations of the Macri administration. Moreover, they believe that not only will they not reach the intended goal but there will be a renegotiation of deadlines.Telco by Telco
Nowadays it seems distant. But the truth is that until recently there was talk of the "green shoots" that were to come, from the hand of the administration macrista. In this framework, each one of the telcos gave an account of their investment plans:
- Telecom had committed US $ 5 billion for the 2018-2020 period only
- Telefónica did the same: $ 43,000 million for the 2017-2019 triennium
- Claro was referring to a plan of U $ S400 million per yearThus, the amount committed by the three was between US $ 2,300 and US $ 2,400 million per year, with Telecom in the lead, followed by Claro and Telefónica.
Such promises were made when the dollar traded at $ 20. And the truth is that they were not updated, despite the shot of the ticket that took him to $ 45. Even so, the Government maintains its plan to increase connectivity levels in the country.
According to the deputy chief of staff and secretary of Modernization, Andrés Ibarra, the idea of the Executive is to achieve during this year:
- The 9 million broadband Internet accesses in homes, schools and public services
- Cover 80% of the locations with 4G (equivalent to 93% of the population) in terms of mobile connectionsCan the telcos hurry up their plans and satisfy the government's demands if the exchange rate, from the moment the announcements were made, doubled?
"It will be very difficult to reach 93% of 4G coverage, as it was before, when the context was even more favorable, since most of the costs associated with networks are dollarized," says iProfesional, Sonia Agnese, senior analyst at Ovum for Latin America.
The expert adds: "Personal is the one that has a greater number of localities covered, about 1,500, while Claro and Movistar reach 1,000 each.To reach 93% of the population would cover between 2,500 and 3,000 That is, more that double the current figure. "
To graph the situation Agnese says that "Personal, despite having made a large deployment in 2018, could barely reach 400. That gives an idea of the difficulty involved in meeting the objectives raised at the time."Reality without tango
"There are two very different worlds: one with a dollar at $ 20 and another with a dollar at $ 40. The investment plan of US $ 5,000 million decided in March should not suffer alterations due to technological or market issues," says Carlos Moltini, CEO of Telecom.
"The problem is that we contemplated fulfilling these disbursements, over three years, with the generation of own resources in pesos, since in that period the ticket went from $ 20 to $ 40, instead of being executed in a three-year period it will take more than Everything will depend on macroeconomic conditions, "he adds.For Sebastián Cabello, an independent consultant in telecommunications, the companies that operate in Argentina and earn in local currency will be affected when investing in infrastructure, since these costs are in foreign currency.
"I believe that the companies will readjust their plans and perhaps want to return to their original obligations, provided for in the 700 mghz concession," adds the expert.
In its view, beyond the fact that operators are used to moving in the Argentine inflationary context, the strong devaluation affects them directly, since network equipment is quoted in dollars.
When the president of Telefónica, José María Alvarez Pallette, visited the country in March, expectations of possible new announcements regarding investments had been generated. But none of that happened.
The company confirmed to iProUP that the amount was to be maintained in pesos (43,000 million) and that an adjustment was not foreseen due to the rise in the exchange rate.
The situation repeats in the case of Claro, which is limited to maintaining the same pace for years.
To review
In the framework of the electoral pre-election, will the Government grant some type of incentive to boost investments?
For Agnese, from Ovum, "the ARSAT network, which would allow meeting these objectives (coverage), unfortunately is not aligned with those locations that must be supplied for that purpose, and there are no signs of improvement in this regard."According to the specialist, it's not just about getting there; There is also a large demand gap, since few have the availability of having a 4G smartphone, beyond being able to afford the cost of the service. In his vision, "these may be unprofitable locations in the long term."
"This also makes it difficult to sink capital in the country, in a scheme in which all companies may have to adjust their numbers to reach more users," he says.
Another point to note is that operators are concentrating the bulk of disbursements in the cities with the highest population density. In the case of Personnel, its deployment is concentrated in the Buenos Aires Metropolitan Area (AMBA).
Like Cabello y Perrone, Agnese affirms that "it may be necessary to rethink such ambitious objectives and to think how the population that uses and requires the service most, even for its commercial activities, can have a good network coverage".
In this scenario, is it possible to think of a decline in the quality of benefits?
Ibarra indicates that they are controlling telcos' investments based on measurements made on the quality of service. And what equipment of the National Communications Agency (Enacom) are monitored different areas with their own equipment for that audit.
This information is then checked with the same companies in order to make the necessary adjustments in technical terms, in order to reach the standards that the Government intends.Perrone, from Frost & Sullivan, points out that "in terms of services, it is not foreseeable saturation problems, such as occurred in 2012, when serious quality problems were observed".
Although the companies claim more spectrum (to prevent future bottlenecks), the specialist believes that "there is still room to avoid inconveniences, although it is very difficult to set a deadline: if the economy stabilizes and investments pick up, there would be to shuffle and give again, "he concludes.