América Móvil wants “fixed 5G” as an alternative to broadband in Latin America

After commissioning 5G networks in dozens of cities in countries including Mexico and Brazil, América Móvil shared more about its plans for the new technology and how it sees monetizing 5G in Latin America.

The region’s largest telecommunications group has confirmed that it will roll out 5G for fixed and mobile operations, potentially in all markets where it operates with 5G spectrum.

“Yes, we are going to do 5G for fixed and we are going to do 5G for wireless. We will have an infrastructure rollout program for 5G which will include phones and also landline,” CEO Daniel Hajj told analysts and investors on a second quarter earnings call.

The use of 5G for home internet, known as Fixed Wireless Access (FWA), has long been touted as an attractive option for telecom operators, especially for areas where it is not not easy to get locals through with fiber.

For consumers, it is also a possibility of broadband without cable in the home. With the FWA model, instead of having wiring to connect the household, the customer simply uses a set-top box that distributes the outdoor 5G signal internally, like a Wi-Fi router.

The problem, however, is that this type of hardware, or customer equipment (CPE), is still considered expensive by most carriers, making the model economically unfeasible at the moment.

However, according to Hajj, América Móvil already has 3 million FWA customers, including its operations in Europe (Austria).

The CEO also clarified that América Móvil will not opt ​​for a single model over another. “With fiber plus 5G, we hope to provide a good experience for our customers,” he added.

Speaking specifically about Brazil, he said the carrier will continue to roll out fiber in Brazilian cities — the company claims to bring fiber to 24 new cities every quarter — but its goal is to have 5G as an option for fixed customers. , depending on the conditions. such as maps, network availability and neighborhood characteristics.

Although other telecom operators have expressed interest in the FWA, none of them has ever presented a clear strategy for using it. Most have studied the format or experimented with it, but cost is still cited as the main obstacle.

América Móvil thus becomes the first major telecommunications operator in the region to be clear on the business case for FWA and to market 5G as an alternative to fiber for customers.

5G MOBILE DEPLOYMENTS

In mobile, the company sees 5G rollouts accelerating in Mexico and Brazil through the end of the year, but implementing the technology is taking longer in Chile and Colombia.

“In Mexico and Brazil, we’re going to have a good rollout by the end of the year,” he said.

The company says it has 5G active in 40 cities in Mexico through its subsidiary Telcel. The carrier sees ARPU growing there, fueled by upselling and moving users to 5G plans. “5G plans give you more, but you have to pay more,” Hajj said.

In Brazil, its pure and standalone 5G service in the 3.5 GHz band has just been activated in the capital Brasília, with the launch expected to take place in the coming days or weeks in Porto Alegre, Belo Horizonte, São Paulo and João Pessoa.

In Colombia, the government has yet to assign 3.5 GHz frequencies to the technology.

In Chile, where its Claro brand was one of the winners of the spectrum auction held in February 2021, the expansion will take a “little bit more”. Claro, which has only secured spectrum in the 26 GHz band, has not yet made a commercial launch in the mmWave band.

Hajj also said América Móvil is expanding its coverage in Peru, where Claro has 3.5 GHz licenses for mobile and FWA services.

In mobile, the service is active in some areas of the capital Lima and the province of Cañete. In AOF it operates in the District of Asia, Santa María, Mala, Lurín, Chaclacayo, Cieneguilla and Santa Eulalia.

“DO NOT WELL IN CHILE”

The CEO admitted that the company “is not doing well” in Chile, even though it had a good quarter in terms of wireless.

Hajj expects Claro Chile to gain market share in mobile over the coming quarters, stressing that the subsidiary must “do more commercially”.

Regarding the Chilean joint venture with Liberty Latin America’s VTR, Hajj said there was “not much to say” as the deal progresses and approvals are expected in the fourth quarter of this year.

Regarding the Brazilian mobile market, Hajj said that Claro is doing well with the integration of Oi’s mobile customers that it has absorbed and that a good number of them are choosing to stay with it. ‘company.

“There are more Oi subscribers coming to Claro than leaving. It’s early to tell, but we’re confident. I think we’re going to get more subscribers than we lose. “, did he declare.

ISPS AND SPIN-OFF TOURS

Hajj considers that competition in fixed broadband is particularly intense in Brazil and Colombia, mainly due to the strong presence and growth of Internet Service Providers (ISPs) in these markets.

However, he believes that América Móvil is well positioned given its size and structure, and because it is able to offer multi-play services (telephony, mobile, pay TV and Internet).

The CEO also sees ISPs having more difficulty financing fiber deployments over the next three years, compared to the past three years, when América Móvil would have more financing options and capabilities.

Regarding the spin-off of its tower business, Hajj expects the group to obtain regulatory approvals in all major markets by the end of the third quarter.

Finally, the CEO confirmed the previously disclosed forecast of $8 billion in capex for the year 2022, with the same amount expected for 2023. Increases are still possible, but regarding spectrum acquisition, a- he declared.

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