The most important services provided by telecommunications companies in Argentina are internet, mobile phone services, and television. In these sectors, the market is primarily led by companies such as Telecom-Cablevisión, Telefónica, and Claro, with notable presence from Telecentro, Dorec TV, and Supercanal in the pay-TV segment.
The acceleration of digital transformation, driven by the increased need for connectivity and data traffic due to the COVID-19 pandemic, has led to changes in the investment strategies of these companies.
Background for Investments
In addition to what was mentioned in the previous section, the health measures of isolation have caused a slowdown in an economy that had already experienced several years of recession and stagnation.
The problem was aggravated due to the difficulty of providing economic assistance to the sectors hit hard by the state. In a deficit economy, the only alternative lies in monetary issuance, which further accelerates the existing inflation and, thus, the socio-economic issues.
Additionally, in this context, an emergency decree was issued declaring telecommunications as an essential service, which made the cost of the service a publicly regulated tariff by the state. Although this decree has not been executed yet, the possibility of its application led to a redirection and, in some cases, a halt in investments. In this decree, besides regulating the tariff, it establishes that:
The National Communications Entity (ENACOM) is designated as the Implementing Authority, authorized to enact the complementary and necessary rules for the compliance with the decree.
To ensure the connectivity of the inhabitants of the Argentine Republic during this pandemic, it is essential to increase the network's reach.
Progressive works should be carried out to best and most effectively address different connectivity needs based on their specific characteristics.
Top 5 investments
Despite the described context, the telecommunications sector is dynamic, which obliges them to keep up with constant changes. Investments in technology are a fundamental factor in this, and this is what they focused on:
1.
Expansion of cable TV and Internet services
Necessary to improve transmission and access speed in areas where the network is already deployed, and there are still inequalities in service quality compared to major cities.
2. Network coverage deployment, expansion, and coaxial system conversion to optical fiber.
Increasing the current national territory coverage, which is currently around 70%, and even though it is a high figure for the region, the situation of isolation has made internet access essential.
3. Expansion and improvement of 4G services
As a complement to home service, mobile device internet coverage has also become essential. In many places, it's the only connection option, and there are still areas with poor coverage.
4. Development of corporate services:
From connectivity, communication, security to housing/hosting, telecommunications companies have also focused on their corporate services, driven by the context of social isolation.
5. Web services and cloud computing:
Due to the reduced investment from major players like Amazon and Google, companies operating in Argentina have opted to focus more on the development and intermediation in the world of cloud-based computing. The market grows at a 30% annual rate when measured in dollars in the country, driven by the digitization of services for both large and small and medium-sized enterprises.
Conclusions and Bjumper's focus
A market overview and the socio-economic situation of Argentina have been presented, marked by the effects of the pandemic, where the top 5 investments follow this logic. The sudden essential need for internet connection and, therefore, the digitization of services has set the course for the sector in the short and medium term.
The increase in the quantity, dispersion, and criticality of the infrastructure supporting this new model makes manual management increasingly difficult, emphasizing the need for automation to reduce time and costs.
