A study issued Monday by a distinguished collaboration of market analysts in Latin America concluded that governments and regulators in LatAm countries should support the development and sustainability of the independent tower industry by implementing several policy and regulatory initiatives.
While the study, entitled “Latin American Telecommunications at the Crossroads of Passive Infrastructure Sharing,” was commissioned by SBA and conducted between June and September 2022, it represents the views of its authors led by Raul Katz, Director of Business Strategy Research in the Columbia Institute for Tele-Information at the Columbia Business School and President of Telecom Advisory Services, LLC.
“This white paper substantiates the value that towerco’s contribute to the wireless ecosystem,” Richard Cane, President, International at SBA Communications said. “Through an econometric analysis of markets in Latin America with mature towerco industries, the study by Dr. Katz validates the positive effects of passive infrastructure sharing on wireless coverage, service quality, affordability, and competition. An independent tower industry benefits network operators, end users and, ultimately, communities. We encourage everyone to read this independently conducted analysis.”
Katz said the underlying purpose of the study was to understand the connection between independent tower companies and the improvement in mobile telecommunications performance in Latin America. Katz said the development of the Latin American wireless industry over the past two decades has seen significant progress in 3G and 4G coverage and improved service quality.
However, there are still substantial challenges in terms of coverage gaps in rural areas, limited affordability for low income users, and capital investment lag compared to OECD (a coalition of 38 countries under the banner of the Organization for Economic Co-operation and Development) countries:
- Higher capital spending (USD 21 per capita vs. USD 16 per capita)
- Lower costs in wireless broadband services (1/3 of costs in terms of per capita income)
- Higher broadband adoption (65 percent vs. 58 percent)
- Increased wireless competition
The authors determined the independent tower industry in Latin America is “significant and well-developed” when compared to other regions, with 191,330 tower sites deployed in the twelve largest countries and an increasing share of independent companies and MNO-owned companies.
The study highlighted the various initiatives that aim to provide public right-of-way access at market rates, deliver faster permit approvals, prevent unnecessary duplicity of site deployment, establish a cap on fees and taxes, promote the shared use of infrastructure for 4G and 5G deployment, avoid price regulation of tower company contracts, and provide long-term guarantees in regulations and permits. In addition, the study found that countries with a higher share of independent tower companies have better wireless performance metrics, including:
- Improved 4G coverage (97 percent of the population vs. 90 percent)
- Faster wireless broadband (12 percent faster)
Authors of the paper included:
- Raúl Katz – PhD in Political Science and Management Science, MS in Communications Technology and Policy, Massachusetts Institute of Technology
- Angel Melguizo – PhD and BA in Economics, Universidad Complutense (Spain)
- Fernando Callorda – BA and MA in Economics, University of San Andrés (Argentina)
- Ramiro Valencia – Electric and Telecommunications Engineer, National Polytechnic School (Ecuador)
To get a complimentary copy of the study, click here.
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