Telecom Argentina expects energy efficiency to drive IoT business

As subsidies are being abolished, Telecom Argentina expects companies and households to invest more in energy and water efficiency, which will benefit the internet of things business.

“We see that the electrical energy cost component becomes more significant for our clients, and that allowed us to open conversations to identify opportunities,” Martín Piñeiro, Telecom Argentina IoT technology manager, told BNamericas.

The company developed energy efficiency solutions with IoT devices to help with cost optimization and the environmental agenda of companies and the public sector.

The latest measures by the President Javier Milei administration impacted gas prices, which increased 250-500%, and energy rates, rising 120-300%, according to figures by news outlet Chequeado. Monthly increases are expected in line with inflation and rising demand.

“The change in the rates regime accelerates concern about cost optimization,” said Piñeiro.

Telecom Argentina offers the installation of IoT energy measurement and optimization mechanisms and consulting services, and serves electricity distribution and water companies.

“Investments in infrastructure for the redistribution of running water and electricity are something that will accelerate in the coming years and Argentina has a huge opportunity to modernize these networks,” said Piñeiro.

OPPORTUNITIES

In 2023, the IoT unit registered double-digit billing growth. “Despite the macroeconomic challenges, there are sectors that maintain a strong level of activity,” said Piñeiro.

Construction companies focused on urban ventures, industrial parks and logistics provide opportunities, too.

There is also demand from security forces and the public sector, the latter with sustained demand for IoT products, leveraged by the need to reduce costs.

“We are starting with very small volumes. Today B2B represents 10% of the company's income and [IoT], within that income, represents 2%. Our ambition is to reach 5% in, perhaps, three years,” he added.

Almost 1mn IoT devices are connected to Telecom Argentina's network.

The company integrates the solutions of nearly 30 business partners in the IoT area. Each project requires six or seven technology and solution providers.

RISK SHARING

Telecom Argentina is offering a new shared risk business model to eliminate investment barriers. The company takes charge of a project and obtains returns through the savings achieved by implementation.

This model has been discussed with public sector clients, since it does not require previously contemplating the project in budgets.

5G

Discussions about 5G are underway with industrial customers, such as metallurgical and automotive companies, Piñeiro said.

In some cases, these networks are for private use due to high bandwidth requirements.

“We still do not have a commercial client but we can say that there is interest because the technology has matured and is entering the growth curve outside of Argentina,” he said.

According to latest data, Telecom Argentina has about 100 5G antennas in operation.