Allocating Digital Dividend Spectrum for Mobile Broadband Could Contribute Up to US$15 Billion to the Latin American Economy

ARMENIA, Colombia, September 22, 2011 -

Today, at the International Telecommunications Union’s (ITU) 11th Global Symposium for Regulators in Armenia, Colombia, the GSMA and AHCIET(1) announced that allocating ‘digital dividend’ spectrum in the 700 MHz band for the deployment of mobile services could contribute almost US$15 billion to the Latin American economy and will expand Mobile Broadband coverage to nearly 93 per cent of the population. The figures are from a new study(2), jointly commissioned by the GSMA and AHCIET and conducted by Telecom Advisory Services LLC (TAS), on the economic and social impact of the digital dividend in Latin America.

“Mobile Broadband presents a huge opportunity to drive connectivity across the region, as well as to contribute tens of billions of dollars to the overall economy,” said Tom Phillips, Chief Government and Regulatory Affairs Officer at the GSMA. “The switchover from analogue to digital TV across Latin America won’t be completed for a number of years. However there is currently significant capacity available in the 700 MHz band ready to be utilised, and we urge all governments across the region to act now and allocate this spectrum for Mobile Broadband and reap the vast social and economic benefits this will provide.”

The figures represent the total economic impact of licensing the digital dividend spectrum for Mobile Broadband in Latin America, as well as the purchase of network infrastructure, support and commercial services. This contrasts with a gain of only US$3.5 billion if the band remains reserved for broadcasting across the region. For the five major economies in Latin America: Argentina, Brazil, Colombia, Mexico and Peru, the upside of allocating the digital dividend to Mobile Broadband is even more significant, contributing up to almost US$11 billion, compared to just under US$3 billion if the band is reserved for broadcasting.

Digital dividend spectrum is currently allocated for broadcasting in most Latin American countries, but, as a result of the transition from analogue to digital TV, this spectrum now has significant free capacity. By allocating digital dividend spectrum for Mobile Broadband technologies, such as HSPA and LTE, the disparity between the connected and disconnected, commonly known as the digital divide, can be lessened. Through the re-allocation of digital dividend spectrum, Mobile Broadband coverage could increase from 75% to approximately 95% of population in Argentina, 75% to 95% in Brazil, 53% to 90% in Colombia, 39% to 94% in Mexico and 65% to 89% in Peru.

The deployment of the 700 MHz spectrum for Mobile Broadband across Latin America also delivers significant social and economic benefits. This includes an additional US$3.1 billion in GDP growth, 5,540 more jobs and US$2.6 billion further tax revenue than would be created through broadcasting services. It would also help generate a consumer surplus of US$5.2 billion. Furthermore, there will be significant social impact, through improved access to educational resources, improved health services and greater financial inclusion.

Pablo Bello, Secretary General of AHCIET, added: “This study demonstrates how Mobile Broadband technology will become a key contributor to Latin American social and economic development. It will expand the reach of the internet to nearly 93 per cent of people across the region and will help create many new business and employment opportunities.”

Dr. Raul Katz of TAS stated: “The digital divide, in terms of supply, demand, prices and coverage, is still an issue. However, the region has a unique opportunity to address this and create an inclusive, information-based society. With a few exceptions, Latin American countries can seize the opportunities that Mobile Broadband delivers without delay.”

Phillips concluded: “The use of the 700 MHz band for Mobile Broadband is essential to achieving universal broadband internet access for people across Latin America. By acting now, governments have the opportunity to transform Latin American society and also drive its economy by helping to create an US$8 billion IT industry across the region, driven by local demand and a thriving export market for Mobile Broadband products and services.”

To view this report, please follow this link: gsmworld.com/documents/Resumenejecutivo_inglesv14deseptiembre.pdf

Table One: Impact of Mobile Broadband vs. Broadcasting in the 700MHz band

Source: TAS, September 2011

                                                            Mobile
                                              Broadcasting Broadband
                                              US$ Millions US$ Millions
    Contribution to the ICT ecosystem
    (acquisition of spectrum, purchase of
    network infrastructure, support and
    commercial services, other assets)              $3,508      $14,800  x4,2
    Additional revenues and contribution to
    GDP growth                                        $513       $3,582  x7,0
    Direct and indirect employment creation          5,198       10,738  x2,1
    Taxes (collected on additional sales)             $816       $3,420  x4,2

(1)  Asociacion Iberoamericana de Centros de Investigacion y Empresas de Telecomunicaciones

(2)  Socio-Economic Benefits of Allocating ‘Digital Dividend’ Spectrum in Latin America - Dr. Raul Katz & Dr. Ernesto Flores-Roux, Telecom Advisory Services LLC (TAS), September 2011. Report commissioned by GSMA & AHCIET in collaboration with Telefonica, America Movil, Telecom Italia, Qualcomm and Intel.

About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning 219 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Congress.

For more information, please visit Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com or the GSMA corporate website at www.gsmworld.com.

About AHCIET

Founded in 1982, AHCIET is a non-profit organization. More than 50 Latin American and Spanish telecommunications companies have joined us with the sole purpose of contributing to telecommunications development as a basis of every nation’s growth.

AHCIET mission is to be the meeting point for telecommunication operators in Latin America, and to offer its members products and services focused on developing knowledge management, training and social applications and business opportunities.

AHCIET also promotes cooperation agreements with international organizations, manufacturers and service providers with the objective of generating complete information in regulatory, technological and commercial issues as well as vectors directed towards the development of the global information society. For more information, visit the website at www.ahciet.net

Gilberto Guillen, Zimat Consultores, +52-55-5554-5419, gguillen at zimat.com.mx, or Ben Evetts, Weber Shandwick, press at gsm.org, +44-7879-614941