On November 14, 2019, the Inter-American Dialogue hosted “5G and the Evolution of Smart Cities in Latin America and the Caribbean,” an event in Washington featuring Ernesto Muyshondt, the mayor of San Salvador, El Salvador, as well as panelists Eric Crabtree, chief investment officer of the World Bank’s International Finance Corporation; Luis Fiallo, vice president of China Telecom Americas; Ed Roach, vice president of regulatory compliance and associate general counsel at SBA Communications; and Rachel Samrén, EVP and chief external affairs officer with Millicom (Tigo).
Margaret Myers, director of the Asia and Latin America Program at the Inter-American Dialogue moderated the panel discussion.
The event provided an opportunity to examine the potential benefits and challenges of implementing highly anticipated 5G cellular network technology in Latin America and the Caribbean. The speakers discussed the gap between 5G expectations and reality, commenting upon issues such as spectrum allocation and cost, investment obstacles and how to ensure inclusivity within the region’s evolving digital economy.
Ernesto Muyshondt opened the discussion by sharing his experiences with San Salvador’s smart city initiatives. Mayor Muyshondt emphasized technology’s role in improving government services for citizens who need them most. Flexible, adaptable platforms utilized in smart cities can address citizens’ concerns and help government provide better education, security and health outcomes, he noted. However, the mayor noted that a lack of cellular infrastructure and broadband availability could keep San Salvador from advancing more quickly toward those goals. Private investment remains key to providing better network coverage, he said, adding that the legal and regulatory framework around telecommunications and new technology innovations needs to evolve simultaneously. He emphasized the importance of collaboration – both with the federal government and local citizens – in establishing these frameworks to help San Salvador become a leader among smart cities.
Eric Crabtree commented on impediments to 5G implementation, focusing his initial remarks on 5G’s high costs. He drew attention to U.S. phone company Verizon’s domestic spending levels –$9 billion in the first half of the year – while they have been investing heavily already to deploy 3G and 4G systems. Costly and time-consuming spectrum auctions, construction of necessary infrastructure and financial constraints have slowed Verizon’s implementation efforts, he noted. In comparison, Latin America needs $60 billion over the next five years for 5G deployment, while global implementation requires $1 trillion. Consequently, expectations need to be tempered.
Luis Fiallo noted that, by 2050, the number of people living in urban economies will grow to six billion; he sees 5G as a connective tool to facilitate technological integration in smart cities. However, a legal framework needs to be in place to allow for 5G to succeed, which requires thinking, planning, and time. Roach complemented Fiallo’s comments when reflecting upon his experience promoting broadband connectivity for all residents in the United States. The main lessons from this include the importance of encouraging co-location – one tower used by multiple licensees – when it is efficient, environmentally friendly and promotes competition to the benefit of consumers.
Rachel Samrén turned the discussion towards the purpose and impacts of new technologies, asking whom their development benefits. The Internet does not exist in Latin America in the same way it does in the United States: 4G covers 87 percent of the United States, while it reaches only 44 percent in Latin America. She emphasized that this ‘digital divide’, which inhibits socio-economic development, needs to be addressed as the region considers adopting 5G. This will require a holistic plan involving cross-governmental participation given how technology intersects with education, the economy, jobs and labor.
Throughout the event, speakers discussed the time frame and potential business models for 5G. They agreed that business-to-business (B2B) systems will probably take hold sooner than those for consumers and the focus should remain upon providing a reliable functioning network first. In the meantime, they can learn from countries currently employing the technology while creating the transparent, enforceable and co-locating regulatory framework that appeals to investors and works for consumers. Speakers cautioned against speeding into the market before establishing such essential components.
During the Q&A portion of the program, questions from the audience touched upon the potential health consequences of 5G, a topic that has been in media headlines lately with some studies showing a presence of radiofrequency radiation associated with the technology, as well as ways in which the U.S.-China trade war, with pressure from the United States to put limits on Chinese manufacturers, might affect how 5G gets rolled out in the region. “U.S. legislation can have a very far reach … and many of the operators in the region, although they’re not American, may still fall under U.S. jurisdiction,” Samrén noted.
In wrapping up the discussion, panelists re-emphasized the importance of collaboration within and between government and industry to improve capacity and capability. Questions remain as to the exact consequences of these technologies in social, economic and political terms. The outcomes of debates over spectrum, costs, business models and regulation remain uncertain, but it is clear that more coordination and planning is required to ensure the results are inclusive and beneficial to all.