Three telecommunications companies have been awarded 20-year licenses to develop 5G in Argentina, making bids totalling over US$875 million on Tuesday. 

The National Communications Agency (Enacom, by its Spanish acronym) allocated different telecommunication frequency bands to Mexican Claro and Spanish Telecom, withr one 100 megahertz (MHz) band each for US$350 million. Meanwhile, Spanish Telefónica/Movistar was awarded a 50 MHz band for US$175 million.

“With the possibility of articulating the deployment and development of this new 5G technology, our citizens will have access to greater speed and content sharing,” said Economy Minister Sergio Massa at an event in the CCK convention center in Buenos Aires where he announced the results of the bid. “And the state will have the opportunity to receive almost US$900 million in the next 21 days.”

The government planned to bring in around US$1 billion in the bidding process, but failed because Movistar’s bid was for 50 MHz and not for the 100 MHz available.

“Perhaps we expected more, but this is a genuine income, which will give us some air in a complicated situation,” Claudio Ambrosini, the head of the ENACOM, told the Télam news agency.

The companies set to provide 5G services will each invest more than US$1 billion for the development of the necessary infrastructure, according to Massa.

The companies are expected to build 5G stations within seven years in towns with up to 30,000 inhabitants. They also have to provide special internet plans for low-income sectors, accounting for more than 50% of the total users.

5G is a cellular network, the fifth-generation technology standard with a peak download speed of 10 gigabits per second — 10 times higher than 4G, its predecessor. As well as personal internet and mobile communication, 5G can be used for satellite networks, drones, industrial plant automation, and the so-called Internet of Things, among many others.

According to Natalia Zuazo, specialist in politics and technology, the bidding could have happened in 2020, but “geopolitics” played a role in the delay. 

“The United States was involved from day zero,” Zuazo told the Herald. “There were negotiations, there was pressure against the Chinese company Huawei.”

The US Embassy in Argentina tweeted against Huawei in January 2020. According to Zuazo, the official explanation was fears of  “espionage” through the infrastructure needed for 5G. “That was never proven,” she told the Herald.

Zuazo suggested that it would have been interesting to have state-owned telecommunications company ARSAT keep the unawarded 50 MHZ.

“It would be necessary to think of an investment plan to make a geographic deployment plan, and not only think about how much money the government will receive,” she added.

“No matter how much money comes in at the moment, it will be necessary to buy equipment later in the deployment,” Zuazo said. “They will need dollars from the Central Bank.”

When paying for the frequencies, the companies can choose to use pesos at the official exchange rate (AR$350 at the time of writing) or US dollars at the blue-chip swap rate (AR$887.9)

The result of Tuesday’s bid will be published in the Official Bulletin on Wednesday. From that moment on, the companies will have 15 business days to make the payment.