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GSMA Intelligence predicts that 5G networks will be rolled out in Latin America from 2020 onwards. But at the recent Mobile World Congress in Barcelona, operators expressed concerns about the timeframe and financial viability of 5G.
BNamericas asked two of Latin America's key operators, Telefónica and Digicel, plus telecom association Asiet, for their take on whether the region will be ready by then, and the challenges and benefits of the new technology.
BNamericas: Do you think it's premature to expect 5G in Latin America and the Caribbean starting three years from now?
Mike Stacey, group director of technology strategy, Digicel Group:
"In general, since 5G standards are not yet fully defined, any discussion of 5G rollout needs to be in that context. Many of the announcements made at MWC relate to vendors pushing pre-standards-based solutions ahead of fully standardized and commercially available 5G equipment.
Having said that, we see no reason not to deploy such equipment if it fits within planned investment cycles, provides immediate and tangible benefits to customers and operators, and has a clear low-cost, low-impact migration path to standards based solutions when these ultimately become available.
With the Digicel 2030 transformation program delivering a refresh of our RAN, virtualization of the core and a full digital transformation, Digicel will be ready by 2020 if not sooner."
Telefónica's communications department:
"Telefónica's position regarding 5G is to incorporate these capabilities gradually in its networks as they become commercially available and as the standard becomes consolidated. 5G must be seen as such, as a gradual and continuous process that will be implemented over the coming years and not dependent on a single variable or event."
Fernando López, regional director for Mexico and Central America, Asiet:
"Some operators in the region have expressed their intention to roll out 5G networks by 2020 and we can assume they will do so.
However, 5G requires certain conditions that do not depend solely on the operators. Existing regulation will have to be adapted to suit spectral needs and to encourage investments.
Technological solutions will need to be developed in order to take advantage of 5G networks when they are operational.
We believe that satellite services will serve as a crucial backup network for 5G as they can ensure continuity of service and energy savings."
BNamericas: What particular challenges does Latin America face compared with Europe, the US and developed markets?
Mike Stacey (Digicel):
"The challenge in any market is to create products that meet and satisfy the customers' needs and to deliver these whilst putting customers in control and delivering a superior superfast network experience.
Digicel recently announced agreements with Affirmed Networks and ZTE as a cornerstone of its Digicel 2030 global transformation program. The evolution to a 5G-ready, virtualized architecture will allow Digicel to fully embrace LTE today and 5G in the near future.
As the industry plans the migration to new standards, there are always concerns and doubts as well as early adopters of pre-standards solutions and those who lag behind, keen to leverage and monetize recently deployed networks.
Technology enablers such as SDN and NFV will bring efficiencies to networks, but only to their full extent when they have fully replaced legacy architectures and equipment practices."
"The challenges that 5G presents include the risk of fragmentation of the standard. The fact that pre-5G capabilities are already being announced with vendors, runs the risk of these technologies not being compatible with the 3GPP standard.
Spectrum is an issue. In the US, Latin America, Japan and South Korea there is interest in using the 28GHz millimeter band, while in Europe they are talking about using the 26GHz band.
Another significant challenge is the need to boost infrastructure both in terms of the number of base stations and in terms of fiber for use cases that require broad bandwidth and low latency. The size of this continent and the distribution of the population is a challenge.
Regulation that supports infrastructure rollout and sharing would be beneficial for 5G given the high level of investment required. The conditions in which new frequency is tendered will have a major impact."
Fernando López (Asiet):
"One of the principal challenges of Latin America is the lack of regional regulatory harmony. That is not an issue in the US and Europe, where the European Commission norms or the FCC ensure a harmonious geographical rollout.
On the demand side, we have to remember that ARPU levels in Latin America are clearly lower than more developed regions, meaning that return on investment is going to be longer term.
We have to remember that 5G goes beyond mere connectivity and will imply considerably lower latency and greater energy efficiency, which is favorable for IoT
In that regard, Latin America has less favorable conditions than other regions and will require the telecom sector to strengthen its ties with these other industries."
BNamericas: What challenges do you see as an operator to make this level of investment?
Mike Stacey (Digicel):
"The precise timing of the investment is a key challenge given 5G standards are not yet complete. Investing sooner brings the benefits of improved performance but at the risk of having to upgrade to standards-based equipment later on. Waiting longer reduces the risk, as such upgrades may then be easily implemented via software only.
The Digicel 2030 global transformation program is designed to optimize the balance of investing now in the most advanced (pre-5G) technology currently available while building the underlying architectures and capabilities that facilitate a smooth and commercially viable migration to newer LTE (e.g. LTE Advanced and LTE Pro) and 5G technologies, as and when these become available.
Where the adoption of mobile broadband services is low, it is for the operators to understand the barriers to adoption and create products that meet and satisfy the customer's needs."
"5G is a path of innovation sustained over time. We've been virtualizing our network with NFV/SDN for the past five years and have applied this concept to a large number of network functions. We have begun Cloud RAN tests. We are advancing steadily toward fixed-mobile convergence in all layers of the network. We have tested new antenna systems (massive MIMO FDD/TDD).
The virtualization of the network is a necessary element for the evolution of 5G and an enabler of the flexibility of the network of the future. Virtualization will bring efficiencies but requires large investments."
BNamericas: Have you seen any use cases or user trends that might encourage 5G in the short term?
Mike Stacey (Digicel):
"One that comes to mind is Verizon in 11 areas of the US which will deploy a pre-5G technology in 2017 to deliver fixed wireless broadband services as an alternative to FTTH. AT&T is also planning similar trials in two cities.
What we are likely to see operators consolidating their technologies around a smaller number of technologies and shutting down either 2G, 3G or both.
Digicel would like to see the region taking the lead in making new spectrum bands that are under discussion available in a timely manner and at prices that reflect the economic realities of the region and the services that will be provided. At the same time, the regulators also have a role to play in implementing policies that level the playing field with OTTs."
"Undoubtedly, connectivity for the internet of things is an important driver and use cases will drive adoption of 5G.
Fixed Wireless Access (FWA) could also be another use case like is happening in the US. Technical and economic evaluation of FWA using millimeter frequency bands will be a key element for introducing 5G in Latin America, especially in regions where the deployment of fiber is too costly or impractical."
Fernando López (Asiet):
"As we are at a test and development phase of 5G, the commercial possibilities are just starting to become apparent. This is all linked to a deeper digitalization process in industry.
Industry verticals like transport, logistics, manufacturing and the automobile sector will be able to benefit from 5G connectivity. We will see greater integration of sectors and all players should be involved in the standardization of 5G.
M2M will be the principal driver behind 5G in Latin America, but key regulatory and infrastructure changes will be needed. 5G will also facilitate massive IoT, enhanced mobile broadband, autonomous vehicles, augmented reality.
The 5G economy is just starting to emerge and has the potential to make major contributions before 2020. That said, any investment in infrastructure must have a solid commercial justification."