5G auctions

Colombia's 5G auctions set to take place before the year end.

The Colombian government recently announced that it is aiming to stage an auction for 3.5 GHz 5G spectrum licences by December 2021. The country’s ICT minister said, “We are reviewing the terms of reference for the 5G auction, with the goal of connecting as many homes as possible.”

It remains unclear which operators may wish to participate but the Ministry of Information Technologies and Communications awarded temporary 3.5GHz licences in early 2020 to Claro, Tigo, Movistar and ETB. All went on to run successful 5G mobile trials.

Given the likely investment required, a telecommunications lawyer in Colombia does not believe that all operators will participate in the auctions, “Maybe Claro has enough purchasing power to participate but Telefonica is limiting its operations in Latin America and I don’t think Tigo has the capacity to participate.”

“Maybe Claro has enough purchasing power to participate but Telefonica is limiting its operations in Latin America and I don’t think Tigo has the capacity to participate.”

Telecommunications lawyer, Colombia

There are others who question the relevance of 5G to solving Colombia’s problems, an IT consultant explained, “5G is going to increase costs for the users and why would you roll out 5G when previous technologies have not yet been implemented fully … connectivity is still below 90%.”

To tackle this issue, the recent government announcement outlined plans for a shared public-private mobile network in remote areas. The aim is to support the private sector in reaching these remote areas where they have little financial incentive due to the limited number of potential users. There are also some private sector players considering a network of satellites to improve remote connectivity.

“Our modelling estimates that by 2030, 5G revenues for our businesses in the region could be more than USD 800 million.”

Telecommunications executive, Colombia

We spoke to a senior executive at one of the operators likely to participate in the auctions, “Although the implementation of 5G is not easy, it is a long-term opportunity if you have the financial capacity. Our modelling estimates that by 2030, 5G revenues for our businesses in the region could be more than USD 800 million.”

In an increasingly competitive telecommunications market in Colombia, will any of the operators really have the confidence to invest meaningfully in such a long-term project?

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