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Summary

If all goes well, the long-delayed 2100MHz AWS Band 4 tender in Guatemala might finally be able to proceed. The tender has been delayed for a long time due to an ongoing regulatory conflict between the telecoms regulator, Superintendence of Telecommunications (SIT), and state-run telco Guatel. Guatel has claimed that it has the right to carry out the AWS band tender, since it owns the right to any spectrum in the 900MHz band and higher, but under the country's telecoms law, SIT is responsible for conducting spectrum auctions. Guatemala’s congress is finally considering bringing an amendment to the telecoms law to facilitate the spectrum auction.

A telecoms law amendment is on the cards for Guatemala

The spectrum process in Guatemala has been delayed multiple times now, and there’s nothing that can be done until the disagreement between SIT and Guatel is resolved. A working group was formed in 2017 to analyze the dispute, and it found that, technically, Guatel can’t hold the AWS tender since it is a service provider. It also stated that SIT is not fully fit to conduct the tenders since it is not an autonomous body, because it works under the direct supervision of the Ministry of Communications, Infrastructure, and Housing (Ministerio de Comunicaciones, Infraestructura y Vivienda). It is also important to note that the legislation that dictates Guatel’s claim over spectrum frequencies of 900MHz and above is still in place and hasn’t been rescinded.

The solution, to empower the regulator with the authority to hold spectrum tenders, requires a change in the country’s General Telecommunications Law. A working group has been installed to discuss possible reforms. The first meeting was attended by Selvin Juárez, superintendent of telecommunications, along with representatives from telecoms operators in the country, among others. The attendees presented their technical points of view regarding the law, to be considered in the modification process.

SIT and Guatel – a background

SIT, as the telecoms regulator, is responsible for managing and supervising usage of spectrum, including spectrum auctions, and carrying out other important regulatory functions.

Guatel is the remaining part of the former state-run telecoms monopoly. The company was privatized in 1998, and a major part of it went to America Movil under the brand name Telgua, which is now Claro. Guatel continued to exist autonomously as a small state-run telecoms company, providing services to state entities only. The company is in shambles today, with continuously declining revenues and poor management, and is on the verge of bankruptcy.

AWS band can add new wheels to Guatemala’s telecoms sector

Resolving the question of which body is responsible for conducting auctions is vital to advance Guatemala’s telecoms sector. The country needs to have AWS spectrum available. LTE penetration in Guatemala was 4.3% at the end of 1Q17, one of the lowest in Latin America. The country also lags behind in terms of internet connectivity, with one of the lowest internet penetration rates in the world, and has one of the highest internet prices as a percentage of GDP. One of the prime reasons for this lack of development is the inadequate amount of spectrum available for telecommunications services. Guatemala has allocated just 210MHz of spectrum, a mere 16.2% of the ITU's recommended target of 1300MHz allocated by the end of 2015. The allocation of spectrum in the AWS band would vastly improve the telecoms scene in Guatemala. Ovum expects that if all goes as planned, LTE penetration in the country could exceed 50% by end-2023.

Appendix

Further reading

The Dominant Roles of América Móvil and Telefónica in Latin America's Mobile Market, GLB007-000083 (July 2018)

"Telefónica's move to split up its Hispanoamérica business will strengthen its foothold in the region," GLB007-000102 (July 2018)

"Hondutel continues to leak subscriptions, pushing mobile market share below 1%," GLB004-000002 (December 2017)

Author

Vipul Babbar, Analyst, Americas Service Provider & Markets

vipul.babbar@ovum.com

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