Internet in Argentina

It does not work. It is very slow. You can not see Netflix. It falls every two minutes. No signal. The five sentences synthesize good part of the experience of digital connectivity of the Argentineans. Is that the problems in the use of Internet and cell phones have become an almost permanent complaint by users, and even more so in places far from large urban centers.
Not only that, in addition to being technologically inefficient, in terms of speed and coverage, the service is expensive if compared to first world countries and others in the region.

All this in a context of changes that occur at the speed of light, with significant movements in local telecommunications companies, with legal issues to be settled soon and with technology that does not ask for permission. While regulating and trying to legislate, the quadruple play – the possibility of receiving fixed and mobile telephony, Internet and television through the same "pipe" – advances and returns to the Internet more indispensable than ever.

It is because of this digital access that data arrives for "everything", from browsing and using mobile applications, to viewing audiovisual content, such as traditional television and the fashionable platforms on demand. Thus, systems such as Youtube and Netflix reign among the "television" tastes of Argentines with contents that no longer reach the living room of the houses through traditional broadcasting, but in the form of bits.

"We want all Argentines to be connected, to have access to the Internet and a good connection in cell phones," President Mauricio Macri predicted in March of this year in the Legislative Assembly. But the convergence that Cambiemos proclaims from the zero minute of its management, is taking a long time to arrive.

Amazing data
According to figures from the Indec in March, in Argentina there are some 7.4 million fixed Internet accesses (6.8 million in households) and 27 million use data from their mobile phones. Although some 31 million Argentines use the network, 30% of the total population is not yet connected.

With respect to access speeds, a Cable UK ranking puts the country at the bottom of the table: out of 200 countries analyzed, Argentina ranks 159th, far from not only the top places (Singapore, Sweden and Taiwan), but also that also from several countries in the region. Among the neighbors, are below Bolivia, Paraguay and Venezuela.

At the local level, the download speed has an average of 3.2 Mbps, far from the 20 in the US and also below 6.1 Mbps in Uruguay and 4.7 in Chile. And that's not the worst: the speed range with more users is between 1 and 6 Mbps. In addition, the distortion of what each Argentinian pays for the service becomes enormous, according to the Internet Observatory in Argentina (OIA).

The average price per megabit per second (Mbps), in the case of fixed Internet, is $ 99.7. The minimum registered was $ 2.7 and the maximum found, $ 1,089.8, which represents a difference of more than 300 times, according to Infobae published in July. A ridiculous difference. In dollars, the average local Mbps costs USD 3.2, while in the US it is USD 1.9 and in Mexico USD 2.

"That the connection is not good is a business for many; In addition, the infrastructure is backward and outdated. And the State allows it. According to the data we show, the cheapest mega is paid in blocks of Recoleta, Belgrano and Barrio Norte: yes, companies better wire some selected blocks of a city. The most expensive is in Villa Madero, in the Conurbano. Access to the network should be a basic right, especially in developing countries that want to grow, "says Sergio Rosemblat, a member of this non-profit Observatory that has existed for five years.

For all that, in addition, communications services (Internet, mobile and fixed telephony, cable TV and satellite) are the most reported so far in 2018 before the National Directorate of Consumer Protection, with 27% of the total of claims. The most frequent reason for complaint is due to problems with the provision of services: total non-compliance (28%), defective or partial services (24%) and processing of the withdrawal request (23%).

As mentioned, pay television is another market crossed by the Internet. According to the Business Bureau consultancy, in the country there are about 11 million subscribers (cable and satellite), with a penetration of 78%, the highest in the region and with an average basic subscription of USD 33 that is also at the top.

A context crossed by politics
On the side of the companies-the primary responsible for the service being bad and expensive-everyone protests and feels "handicapped" by the Government. Everyone is all: there is no one who does not complain.

On June 30, the government finalized the merger between Cablevisión, Grupo Clarín, and Telecom Argentina, one of the two largest telecommunications companies in the country that emerged after the privatization of Entel in the 1990s. The new giant has a market value of USD 14,000 million – at the podium of the largest companies in the country – and concentrates 56% of broadband connections, 40% of cable TV and 34% of the mobile telephony.

"In order for us to have the mobile communications and information technology services sector that we need, the market has to be more dynamic. And this boosts the market, "said Esteban Greco, head of the National Commission for the Defense of Competition (CNDC) on the day he authorized the business. The CNDC requires the new merged to divest 143,464 Internet clients in five provinces and return up to 80 Mhz of radio spectrum.

Both Telefonica and Claro, the other two large companies in the sector, denounced the approval of the merger before the courts. They argue that the new giant will concentrate almost 60% of the fixed broadband market at a national level and up to 90% in certain cities. In addition, they speak of "discriminatory treatment", they question future investments and affirm that the measure, far from invigorating the market, puts a "brake" on it.

Meanwhile, the Senate gave a half sanction to the so-called "Short Law", which seeks operators to share infrastructure and extend even more, until 2020, the possibility that telephone companies can provide satellite television, an old Claro claim and Telefónica. Likewise, there were no protests: both companies believe that this is no longer enough to compete with Telecom / Cablevisión.

But the truth is that now it is hardly convenient for them to give this service for the additional costs, many of them with an important dollar component. They are more interested, for example, in that the authorities do something so that they can add some channels to their mobile video platforms (13 and TN, Clarín, for example), something that they believe they only offer them at prices that are neither reasonable or competitive. On those platforms, they hope, will be a big part of their future profits.

The role of the State
"It is true that the Change management did not do much for the convergence issue, but it is something that comes from behind," says Enrique Carrier, the main analyst of the local telco sector. "In principle, the so-called Media Law provided for telephone companies to broadcast television. But it did not happen. If that had happened at that time, investments in networks would have been advanced in search of additional income.

There were also 'political mistakes' (from the point of view of the previous government): they allowed Cablevisión to grow without competition, with broadband and television combos. Something similar happened with Telecentro. On the other hand, neither was an alternative infrastructure sought for the alternative contents that they promised. Today we pay for all those strategic mistakes. "

"Telefonica and Claro are investing in fiber optic networks, but that deployment takes time. At the client level, it is an uneven scenario that is accentuated. In Capital there is competition, with residential offers that reach 100 MB, but in many places in the interior it does not reach 3 megabytes. That scenario is accentuated because that infrastructure will take time to arrive, "the analyst adds.

Excuse or not, the general consensus of the market, after the merger, is similar: investments will continue, but at a pace that will be defined. "Now, instead of going to 100 we're going to 20," they describe.


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