Latin America is a fruitful region for the development of network sharing strategies. First, according to World Bank 1 , there´s a lack of coverage measured in 7% of the total region population, which represents 45 million people. Second, the average income is low in comparison to other countries in UE and North America, resulting in costs challenges tougher than such other regions 2 . And third, given these challenges, 5G deployments will rely on costs control and efficiencies such as Network Sharing.
The Network Sharing strategies will face competition challenges between incumbents and new entries, mainly those who recently were granted with the right to explore 5G frequencies. Most of the new ones will challenge network sharing between incumbents where they must build network from the scratch.
In comparison to UE, rural areas in Latin America are around 30% less connected. But the level of Network Sharing in Latin America Region is still low. SCM+ study shows that that the average of operators per tower is from1,1 to 1,5 in the region, varying by country as the following chart represents:
Given the number of challenges and huge opportunities, this chapter provides an overview of Network Sharing development in Latin American, mainly Brazil, México, Peru, Chile and Colombia.
Brazil
The highlight for Brazil is the acquisition of Oi mobile operation by Vivo (Telefónica) Claro and TIM. Worth also to mention that small and medium ISP represent more than 50% of the market share and Neutral Networks companies are relevant to support the recent expansion of the medium size companies such as Vero.
| Year | Companies | Summary |
|---|---|---|
| 2022 | TIM, Claro and Vivo | Oi Mobile sold to Claro, Vivo and TIM, affecting all RAN Sharing agreements between TIM, Vivo and Claro where Oi had its mobile infrastrutre. |
| 2023 | Americanet/Vero, V.tai (Neutral Network provider) | Americanet/Vero signed agreemento with V.tal that will provided Fiber Infra covering 22 milion home passed. |
| 2023 | TIM, Algar | Algar signed a network agreeement to use TIM network to provide services as MVNO. |
Last but least, ANATEL is planning to assess the effects of long-term RAN Sharing agreements in Brazil. In short, ANATEL will analyze such ran sharing agreements as a whole – 16 ran sharing agreements were approved by ANATEL since 2013 – on its competitive aspects, considering geographics aspects and access of competitors.
Chile
Since 2021, Networking Sharing in Chile involved mainly Telefonica operations and covered Towers and iber infrastructures.
| Year | Companies | Summary |
|---|---|---|
| 2021 | KKR, Telefonica | Acquisition by KKR of the fiber optics network of Telefonica, the largest in the coutry, to create the first fiber wholesale access company. |
| 2021 | American Tower, Telefonica (Telxius) | Telefonica's towers subsidiary, Telxius, sells its towers portfolio in Spain, Germany, Chile, Brazil, Peru and Argentina, to neutral towers operator American Tower. Value of the Chilean tranche is USD 770 million. |
| 2022 | WOM, Phoenix Tower International | Moblie local company WOM sells its towers portfolio in Chile (3,800) to Phoenix Tower International. Deal value is USD 930 million. |
| 2022 | América Móvil (Claro),Liberty Latin America (VTR) | America Movil and Liberty Latin America merger of its operations in Chile to create a JV that strenghtens synergizes and each of the parties mobile, fixed (fiber) and TV businesses. |
| 2023 | ON Net Fibra (KKR), Entel | Acquisition by On Net Fibra (KKR and Telefonica JV) of the existing fiber optics network of Entel, comprising the primary FTTH and distribution networks, and the primary network for P2P services, a portfolio of 1.2 million houses. |
Peru
In Peru, Telefonica has reinforced its strategy to sell its infrastructure, both Towers and Fiber.
| Year | Companies | Summary |
|---|---|---|
| 2023 | KKR, Telefonica, Entel | Acquisition by KKR and Entel of the fiber optics network of Telefonica, the largest in the coutry, to create the first fiber wholesale access company |
| 2023 | Sitios Latinoamerica, Amércia Movil del Perú (Claro) | Acquisition by Sitios del Perú of 2,980 telecommunications tower. Sitios is one of the most important tower operators in Latam, with more than 30,000 towers owned in several countries. |
| 2021 | American Tower, Telefonica (Telxius) | Telefonica’s infrastructure subsidiary, Telxius, sells its towers portfolio in Spain, Germany, Chile, Brazil, Peru and Argentina, to neutral towers operator American Tower. |
México
Recently extended to 2030 3 , the NS agreement between Telefónica and AT&T allows Telefónica to use AT&T's 3G, 4G, and 5G access network infrastructure in Mexico. Telefónica may leverage from efficiencies due to costs saved from spectrum expenses no longer needed and AT&T will monetize its telecommunication network.
| Year | Companies | Summary |
|---|---|---|
| 2022 | Telcel, At&T and Movistar | Telcel, At&T and Movistar are participants of Altán Redes' share network. |
Colombia
Although there´s no public information about Network Sharing, press reported 4 a Network Sharing agreement (MOU) between Telefónica Colombia and Tigo in 2023, pending on regulatory approval, that would cover more than 700 cities.
If approved, the deal would “will benefit 35 million Movistar and Tigo mobile users, enabling both operators to run their mobile networks and use spectrum more efficiently, and help achieve the Colombian government’s goal of extending internet coverage to 85% of the country’s population” 5 .
Conclusion
As affirmed initially, opportunities are huge. According to GSMA, Network Sharing initiatives can save around 30% of CAPEX and OPEX, increasing the cash flow in up to 20% 6 . The estimation made by SCM+ projects more than 500 thousand new towers up to 2032. And 5G efficient deployments will certainly depend on the degree of Networking Sharing.
