Even as the region is struggling to overcome the challenge of COVID-19, Latin America is well-positioned to benefit from 5G and over-the-top (OTT) service platforms. As we stated at the 24th CAF/Dialogue annual conference, we have great hopes in 5G networks, 5G-enabled services, and the development of OTT. Creating new opportunities will require policymakers and industry to work together to close the investment gap and advance smart regulations across the Americas.
Now is the time for action to secure the digital future of Latin America. Recent IMF projections suggest the region will suffer a major recession in 2020 and experience a 9.4% contraction in the economy. What is at stake is the near two decades of socio-economic progress that has helped to alleviate poverty and improve access to essential services – especially digital ones.
Despite the regional hardships forecasted by the IMF, digitization will continue to redefine the lives and livelihoods of consumers and businesses around the world. The COVID-19 pandemic has only served to highlight the importance of investing in robust and resilient digital infrastructure. It is clear that a strong broadband network and access to the internet is more important than ever. Yet, many communities are still experiencing accessibility gaps for these transformative services; exacerbated by the conditions of the pandemic, this has only served to entrench existing disparities and inequities with respect to digital products and internet services.
So, what should Latin America do? First, policymakers must take steps to help streamline the deployment and availability of 5G networks and services. GSMA projects that these connections will reach 58 million by 2025 in Latin America. The lower latency and improved capacity promised by 5G can support revolutionary new capabilities for consumers and businesses in areas such as telehealth, distance learning, smart cities, automated manufacturing and precision agriculture.
Second, the region can new derive economic benefits by investing in the media industry. The convergence of the media and communications sectors – boosted by steady supply and demand – is driving a cycle of investment and innovation in software, hardware and content. These trends and shifting consumer habits with respect to information and entertainment are pushing OTT development to new and exciting places. Latin America is at the forefront of this change, with nearly 40% of the region’s population—244 million people—watching video via mobile phones.
Around the globe, greater adoption of OTT platforms signals a “new normal” that is transforming how we consume entertainment, learn, connect in the workplace, and even how we access healthcare services. With the advent of 5G, consumers and businesses stand to benefit from more interactive, immersive, mobile, and personalized experiences based on what they like and where they are.
Those of us who live in Latin America also know that there is no shortage of unique talent here. Our young and tech-savvy population is shaping the future of the region as consumers, creatives, and entrepreneurs in the media, communications, and technology industries. When you consider how these factors inform the region’s vast potential, it is no coincidence that Latin America was selected as HBO Max’s first international market after its U.S. launch.
To be sure, this digital transformation will not come easy. However, there is broad consensus about the existing hurdles and the areas that deserve the immediate attention from policymakers:
- ICT Investment. A conservative estimate from the Center of Latin American Telecommunication Studies stated that Latin America should invest a cumulative amount of USD 161 billion between 2019 and 2025 (USD 61 billion over current trends) in order to achieve high-income economies levels of connectivity. To maximize the impact of every dollar invested, decision makers must prioritize technologies and services such as 5G and OTT that have demonstrated to have far-reaching, secondary impacts on people and local economies.
- Workforce, Reskilling, and Education. Leaders in industry and government must rethink how we educate and train workers to prepare them for the jobs of the future. According to ManpowerGroup surveys, over 4 in 10 firms in the region say they have difficulty finding workers with the right skills. To close this gap, investment must be directed toward improving digital fluency, analytical abilities, and continuous learning capabilities. At AT&T for example, we have committed to driving innovation in education throughout Latin America to promote student success in school and beyond through our international program ESCUELA+.
- Legal and Regulatory Modernization. Successful digital transformation will require modernizing regulations and institutions to promote greater competition and eliminate unfair barriers to market entry and investment. In practice, that means taking meaningful steps to curb anti-competitive practices in the area of digital products and services that impact how people communicate, learn, shop, stay informed and entertain themselves. We must also take steps to make online platforms more accountable and more transparent about the decisions they control. We want a digital future where all technology firms have an opportunity to succeed – not just a dominant few.
Latin America has vast, untapped potential. Maximizing this opportunity will require that decision makers in the public and private sector continue to work together to chart a path forward for a more prosperous and equitable future for the region. Today, we have a unique opportunity; there is an unprecedented alignment among the skills and interests of key players – national governments, technology firms, and consumers—needed to overcome the challenges of the pandemic and press forward. Now, we must get to work!