The economic reactivation of Venezuela due to unofficial dollarization, along with the flexibility of fixed and mobile service rates, has led to investments in the local market.
Although operators cannot access financing and are limited to collecting the rates they can charge from people who have become impoverished, prices have been maintained and operators have been able to make disbursements to deploy fiber optics, migrate 3G base stations and tackle vandalism.
“I hope that this year, if we do not manage to migrate all 3G to 4G, at least 80% of the base stations should migrate to 4G,” said Pedro Marín, president of telco chamber Casetel, in response to a question from BNamericas during a webinar hosted by 5G Americas.
Marín warned that he does not expect a network blackout, but rather migration of 3G to 4G users. “At the base station level, there is a good deployment, the problem is that there has been vandalization of these stations that were not operating. Those are being reconnected, and there is also growth because, for example, Digitel said that it is going to incorporate new base stations.”
Currently Movistar is the operator with the most installed base stations, with 3,000 sites, followed by Digitel with nearly 2,000. State-run Movilnet, a unit of Cantv, has 1,700 base stations throughout the country, according to Marín.
Telecom regulator Conatel's 2023-25 telecommunications plan foresees the installation of 600 new 4G base stations in 2023, 700 in 2024 and 800 in 2025.
In addition to mobile services, there is investment in fiber from ISPs that have been able to take advantage of the flexible rates. Since 2020, more than 190 new ISPs have started up.
However, the growth of the market is limited by the prices of the general telecommunications routes (VGT), ducts and poles through which the networks pass and which are property of the State. The high price for the use of VGT makes investments in the interior of the country difficult, says Marín.
Another pending issue is the lifting of import duties on the sector that President Nicolás Maduro promised.
The latest figures that Conatel published on the market, as at the end of 2022, indicate that there were 18.4mn mobile users, 47.3% with 4G, 51.6% with 3G and the remainder 2G.
In total there were 14.7mn smartphones, 94% of which were Android.
Mobile internet subscribers reached 13.8mn while fixed internet subscribers totaled 3.5mn.
“It is imperative that Venezuela begins to grow in internet,” added Marín.
The country registered an average mobile broadband speed of 10.7Mbps while fixed internet speed stood at 32.3Mbps.
ECONOMIC SITUATION
Venezuela is experiencing an economic recovery in the face of the Maduro regime's blind eye to the circulation of the dollar. According to Marín, about 70% of transactions in Venezuela are made in dollars.
According to the central bank, in 2023 inflation was 189% compared to 234% in 2022. The government projected economic growth of 5% for the year.
5G
Although there were rumors of a possible spectrum auction for 5G in Venezuela for this year, no progress has yet been made.
“I still don’t see implementation by Venezuela because the economic conditions of the country at this time don’t allow it. The investment needed for 5G is large,” added Marín.
“The three suppliers are doing tests, but for very specific applications such as FWA," or wireless broadband.
The tests were done with existing spectrum held by the operators. Currently, none could provide the service in those bands because they do not have the necessary bandwidth.
INTERNATIONAL CONNECTIVITY
This year Marín expects international bandwidth capacity through submarine cables to double. “We come from an international connection of 380Gbps, we went to 1Tbps in the last three years and for 2024 our estimated growth [for the company] is 25%,” Cantv president Jesús Aldana said recently.
The company plans to deploy a 500Gbps link with northern Brazil this year, which will add to the international capacity of Cirion's submarine cables – which concentrate close to 70% of the market – and the cable with Cuba.
“If we’re going to migrate to 4G and 4G+, and eventually to 5G, we’re going to need much more capacity,” said Marín.