The long-delayed AWS Band 4 tender in Guatemala is set to be delayed even further. It seems like there's no end to the reasons that keep delaying access to the AWS band in the country, the latest being this month's general elections. Once the new government takes the reins, an amendment to the telecoms law should be high on the agenda if the country's telecoms sector is to continue to grow.
General elections to further delay the AWS band auction
Guatemala has been struggling to launch the tender for the AWS band since 2015. First, the process was ensnared by a number of appeals seeking to exploit legal loopholes in the country's telecoms law against the auction promoted by the telecoms regulator, the Superintendence of Telecommunications (SIT). And now it looks like the process is going to be delayed further due to the country's general election, set to take place on June 16. In a statement given to local newspaper Prensa Libre, the vice minister of communications of Guatemala, Cristian Aguilar, said he has accepted that the planned auction process is going to be delayed, to "leave the table clean" for the incoming government.
Telecoms law amendment should be top priority for the new government
The tender for the AWS band has been encumbered by 17 challenges to the auction process, the most serious being a claim by state-run telco Guatel that it owns the frequencies up for auction, since it owns the right to any spectrum in the 900MHz band and higher. 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 found that SIT, which under the country's telecoms law is responsible for conducting spectrum auctions, is not fit to conduct the tender because it works under the direct supervision of the Ministry of Communications, Infrastructure, and Housing (Ministerio de Comunicaciones, Infraestructura y Vivienda) and is therefore not an autonomous body. The only possible solution is to legally empower the regulator with the authority to hold spectrum tenders, which requires a change in the country's General Telecommunications Law. Thus, once the new government takes over, an amendment to the telecoms law should be at the top of its priority list.
Technology is outrunning the legal processes holding off the spectrum auction
The first LTE launch in Guatemala happened in 2014, when Movistar launched an LTE network in the 1900MHz frequency band. The other major operators, Tigo and Claro, followed soon after. However, the state of the telecoms sector in the country is not impressive, as Guatemala has one of the lowest internet penetration rates in the world and one of the highest internet prices as a percentage of GDP. One of the prime reasons for this is the lack of spectrum availability. Guatemala has allocated just 210MHz of spectrum, a mere 16.2% of the ITU's recommended target for 2015 of 1300MHz.
The more important aspect of the current spectrum situation in Guatemala is that the world is swiftly moving toward 5G, which would require even greater amounts of spectrum to be allocated for telecoms services. The proposed auction of a mere 90MHz block of AWS spectrum is not going to suffice. If each operator gets an equal amount of spectrum, they'd be getting 30MHz each, which is not sufficient to provide 5G services. To add some context, the smallest block allotted to operators in South Korea for 5G services is 80MHz, rising to 800MHz in the higher frequency bands. In addition, operators would be more interested in frequencies that provide better support for 5G, such as the midband 3.5GHz frequency. The country has already lost a lot due to the delay, and it can't afford to lose more. In the age of the internet economy, a country's telecoms sector has a major and direct impact on the overall economy of the country.
The Impact of Telefónica's Sale of Assets in Central America, GLB007-000234 (May 2019)
Digital Profile: Millicom, GLB004-000025 (December 2018)
"América Móvil reports an impressive bottom line in 4Q18, though revenue growth remains flat," GLB007-000219 (March 2019)
"Telefónica reports strong 3Q18 results despite a declining top line," GLB007-000188 (January 2019)
"Millicom is expanding its cable footprint in Latin America as it divests from African markets," GLB007-000174 (December 2018)
"Guatemala finally takes necessary steps to carry out AWS auctions," GLB007-000134 (September 2018)
Vipul Babbar, Analyst, Americas Service Provider & Markets