Latin America’s MNOs call for new partnerships to make densification real

Operator CxOs took to the stage at the GSMA’s Mobile 360 Latin America event in Bogota, Colombia, with some clear messages about deploying next generation networks. The overall theme was that the new mobile networks will require a new set of economics, and far closer cooperation with industries, cities and Internet companies.

These messages echo what Small Cell Forum is hearing from its operator members round the world. The Forum participated in the event, as part of its important ongoing work to capture MNO requirements in each region and feed them into its global work program.

In Bogota, those requirements were clear:

• MNOs need to reduce their costs radically, perhaps by sharing investment and rewards with other stakeholders.
• They need fiber “through every wall”.
• They need stronger working relationships with city authorities, since smart cities are seen as the most important way to transform Latin American society through connectivity.
• And most of all, they want processes and technologies which will enable them to deploy new networks far more quickly than ever before.

Jorge Castellanos, president of Colombian telco ETB, said: “The steam engine took 50 years to reach Colombia. We’ve had 4G for five years but fewer than one-third today are on 4G. We must not wait for half a century for the 5G society as we did for the Industrial Revolution.”

The urgency is because executives are convinced of the huge impact that a ubiquitous, dense wireless network could have on Latin American society and economy, and especially in making the region’s huge cities truly smart.

Luis Malvido, executive director of Telefonica’s Hispanic America region, summed up the architectural challenge, saying: “We will have 5G in 10 times the locations we have 4G, in every country we operate in.” To achieve those numbers of cell sites, Telefonica is developing a common management platform which would work in the same way across all its countries.

This highlights the challenges many operators face – deploying at far greater scale and density, and at higher speed, while reducing total cost of ownership.

This will only be achieved if a new approach to deploying and managing networks and supporting infrastructure is found. Part of that is, like Telefonica, to introduce common software platforms which will add intelligence and flexibility to the entire system. But that will not transform the economics sufficiently to convince MNOs to accelerate their densification.

Every executive expressed anger or resentment that the burden of paying for network deployments fell almost entirely on the operators, which were then “taxed” on top of that, with high spectrum auction fees and other expenses. They called for greater government fiscal support to increase their ability to invest in infrastructure.

Mauricio Ramos, CEO of Millicom International Cellular, asked: “If bits are so essential to the economy, why tax them? If we think the digital economy is so important, why do permits for fiber take so long?” Regulators, all the CxOs agreed, need to provide more incentives to invest in ‘digital highways’ as well as eliminating barriers to deploying infrastructure.

These demands are heard wherever the Forum travels, and SCF is instrumental in fostering some of the improved links which the mobile industry needs, with cities, regulators and enterprises. As these various stakeholders understand one another better, and as wireless connectivity becomes more critical to them, new approaches to sharing the risks and rewards of the new networks may emerge.

While a government or city may invest in a new network for socio-economic reasons, it may become just as likely that an industry player – a cloud provider, a transport operator, a manufacturer –  would share the cost too, in return for guarantees that the network would support its particular needs optimally.

These multi-stakeholder networks would be particularly valuable in accelerating progress towards advanced smart cities. Paulo Cesar Teixeira, president of Claro Brasil, pointed this way, saying there will need to be innovative ways to fund 5G and drive change, especially for the massive cities of Latin America’s largest country. His aim is to “empower businesses” to invest in wireless and make cities better places to live in, and this means working closely with organizations, and with entrepreneurs, in specific vertical sectors such as utilities and automotive.

Cooperation on common platforms and services, and even on funding network roll-out, could accelerate the pace of densification and connected cities, on the path to 5G in Latin America. These are conclusions which will resonate with Forum partners and members in other regions, and will be addressed in SCF work items and alliances in the months ahead.