Despite facing challenges, Bolivia’s state-owned communications company, ENTEL, is making impressive strides in deploying fibre optics across the country. With a budget of USD 50 million, ENTEL has devised a three-phase strategy to bring fibre optics to 32 municipal capitals, 12 towns and various rural areas.
ENTEL had already announced last December that its fibre optic network covered 82% of the population centres in the country. Now, the company aims to further enhance its services by installing an additional 700 base stations throughout 2023. To support this expansion, ENTEL recently invested USD 12.5 million in expanding its fibre optic networks and antennas in the economically disadvantaged department of Chuquisaca, following the successful digital connection of Pando, the region with the lowest income in Bolivia. An internet and digital economy activist sites, “Bolivia is far behind other developing countries. Chuquisaca’s announcement should be taken at face value because ENTEL, under orders from President Luis Arce, must invest heavily to meet his National Development Plan 2025 (‘PEDES’).”
While these developments bring positive news for Bolivia’s connectivity, the dominance of ENTEL’s state-supported investment has posed challenges for private telecommunications operators in the country. A consultant for international organisations and an expert on connectivity and digitisation issues in Bolivia agrees that “the problem is the corrupt regulatory framework, which is guided by the orders of government authorities to always favour the state-owned company ENTEL. With Luis Arce this is more noticeable. He does not want private companies beating public companies in any sector.” As of July 2022, ENTEL controlled 52% of the radio telecom stations, followed by Tigo with 20% and Viva with 7%. “Let’s not forget that the Juancito Pinto bonus is paid with ENTEL’s dividends. Do you think he will let other companies win the market?”
“The problem is the corrupt regulatory framework, which is guided by the orders of government authorities to always favour the state-owned company ENTEL. With Luis Arce this is more noticeable.”
An expert on connectivity and digitisation issues, Bolivia
Another hurdle for Bolivia’s telecommunications sector is the prevalence of 2G and 3G base stations, which offer lower speeds compared to 4G and limit the potential for finer optic investments. The Inter-American Development Bank (“IADB”) noted last year that Bolivia was falling behind in developing its fibre optic network and recommended prioritising public fund investments in economically unattractive rural areas. “Foreign direct investment is needed, but the government’s vision will scare off investment,” states an internet and digital economy activist and our consultant for international organisations also agrees, “This may explain to a large extent why so far Bolivia is one of the few countries that has not closed deals for the implementation of 5G.”
“Foreign direct investment is needed, but the government’s vision will scare off investment.”
An internet and digital economy activist, Bolivia
To bridge the digital divide in Bolivia, the IADB advised the establishment of a dedicated telecommunications fund. It estimated that the country would require approximately USD 2.13 billion to close the digital gap and reach levels comparable to OECD countries. Of this amount, USD 1.86 billion should be invested in fixed broadband, with a specific focus on expanding coverage in rural regions. “There is ample evidence that the regulatory authority (“ATT”) does not seek to promote competition but rather to protect the advantageous position of the state companies,” quotes an internet activist, “BOA in air services and ENTEL in telecommunications.”
As ENTEL continues its fibre optic expansion efforts, it is essential for Bolivia to address the challenges and heed the recommendations of organisations like the IADB. By investing in rural areas and implementing strategies to encourage private sector participation, Bolivia can bridge the digital divide and propel its telecommunications infrastructure towards the standards of developed nations.