The regime of Daniel Ortega and Rosario Murillo announced the provision of three frequency bands to introduce 5G technology in Nicaragua, in a context in which the main telecommunications operators in the country, Tigo and Claro, are under a veiled threat of the dictatorship to its operationsafter Ortega accused them of benefiting from an advantageous tax regime established during their privatization processes.
In addition, the announcement occurs after the entry of a new operator in the Nicaraguan telecommunications scene: the company TECOMUNICAarose from the merger in January 2017 of the state companies National Electric Transmission Company (Enatrel)yehe Costa Rican Institute of Electricity (ICE).
The Institute of Telecommunications and Posts (Telcor), regulatory body for the sector, issued the administrative agreement 02-2022published in La Gaceta, Official State Gazette, on Thursday, November 24, reporting the reservation of the frequency bands 3300-3400, 3400-3600 and 3600-3700 megahertz for the deployment of 5G technology services in Nicaragua.
Communications specialists explained to CONFIDENTIALunder condition of anonymitythat by establishing the reservation of these frequency bands for 5G technology, the regime takes the first step to start a bidding process and awarding these to operators willing to develop this system in Nicaragua.
The regulation of these processes establishes that these should be open tenders, but given that the dictatorship fails to comply with these provisions, it may be that, in practice, they are restricted processes or even direct awards in accordance with the interests of the Ortega dictatorship.
5G technology hand in hand with regime projects
The same administrative agreement of Telcor establishes that the implementation of 5G technology in Nicaragua must be to support the alleged plans and programs of the regime to combat poverty in the country.
“It is arranged to start the planning process for the definition of a national strategy and its respective roadmap, in order to implement and take advantage of the benefits of 5G technology, including the mechanisms and rules that guarantee an efficient and equal allocation of conditions of the frequency bands identified for said technology, in accordance with the objectives established in the National Plan to Fight Poverty and Human Development 2022-2026”, indicates the administrative agreement of Telcor.
The agreement also establishes that those operators that offer services in the bands that are ready for 5G technology to operate, will only be able to continue operating in them under the conditions established in their enabling titles, until they are relocated by Telcor.
“Consequently, the assignees may only continue using said frequency bands, respecting the current allocation at the time of their assignment, while this regulatory entity completes the reorganization process of the aforementioned frequency bands,” adds the administrative agreement.
Ortega’s threat to the big operators
On November 8, while participating in a Sandinista Youth congress, which he took advantage of to try to justify the municipal electoral farce with which his regime self-awarded the 153 mayors of NicaraguaOrtega expressed that the telecommunications companies obtain “good profits”, but that the tax payments they make “were not fair” compared to the economic benefits they obtain.
Ortega’s warning threatens large foreign capital operating in Nicaragua, such as multinationals Mobile America Y millicom, owners of the brands Of course Y yourespectively, which have invested hundreds of millions of dollars to provide Internet connection and cellular telephony in the country.
In addition to Of course Y youthere are Nicaraguan capitals and those of other countries that operate medium and small companies such as Ideay, IBW, Metronet, Cablenet, Ufinet, ALFA, Casavisión, SBA, Alliance and Torrecom, which make up the Nicaraguan Chamber of Telecommunications (Canitel).
Also, there are those operators with whom the Ortega regime has direct links through its economic alliances with business groups of Russia and ChinaWhat Yotaa Russian capital and technology company that offers Internet access, and xinweiproperty of controversial Chinese businessman Wang Jing, that operates in Nicaragua with the trademark cootel, that never managed to establish itself in the market, despite all the government encouragement it received.
Teko, the new operator of the regime
Likewise, there is the new operator on the Nicaraguan telecommunications scene: the company TECOMUNICAarising from the merger of the state companies National Electric Transmission Company (Enatrel)yel Costa Rican Electricity Institute (ICE).
TECOMUNICA operates under the trade name Teko and offers Internet connection services (residential, business and corporate), digital television and installation services for cameras and security systems. Until now, it has not ventured into the mobile or fixed telephony market, just like Yota Y cootel.
When it was announced in 2017 the emergence of TECOMUNICA, operators in the sector expressed their fear that this new company would become a new form of unfair competition, considering that the regulatory bodies of Nicaragua and Costa Rica –through their regulatory bodies– favored this joint state initiative.
Of the active operators in Nicaragua, Claro and Tigo are the most dominant in the market. América Móvil, owner of Of courseis owned by Mexican billionaire Carlos Slimwho even visited Nicaragua and has met in Mexico with operators of the dictatorship to talk about possible investments in the country.
Millicom, owner of you, is headquartered in Luxembourg with a corporate office in Florida. This originated from the merger of Swedish and American capitals, among others, and recently bought the operations in Central America, of the Spanish company Telefónicaowner of the Movistar brand.
A 667 million dollar cake
It is estimated that the telecommunications industry in Nicaragua will generate income of 667.1 million dollars in 2022. In the country there are around six million mobile lines, a segment in which Claro has around 55% participation and Tigo has almost all the the rest. 100% of the municipalities have cellular coverage, (consequently, mobile internet access), which covers 85% of the population. In addition, 45% of the municipalities have LTE (or 4G) technology.
According to the Monthly Index of Economic Activity (IMAE) of last August, prepared by the Central Bank of Nicaragua, the sector had a growth of 10.6% in communications services, compared to August 2021.
The transformations of 5G technology
The entrance to Nicaragua of 5G technology it would be a major change in bandwidth speed. The specialists consulted by CONFIDENTIAL explained that services such as streaming or all types of video consumption on social networks would be the greatest beneficiaries of the entry into operation of this type of technology.
“It’s much better connectivity. The most important thing that 5G offers is better bandwidth. With 4G you can handle a connection of 200 megabytes per second. With 5G you can handle up to 10 gigabytes per second, that is, 10,000 megabytes per second,” explained one of the specialists.
“It also offers you lower latency, which is what the time it takes for data to get from one place to another is called. This is super cool for data transmission. It means better video streaming, more bandwidth. By lowering latency, it makes it great for applications like streaming video, TV, telemedicine, or all of that stuff we call the Internet of Things,” he added.
After Ortega’s threat, the regime has not made a public statement on the subject. Previously, the sector has already had to deal with the abuses of the dictatorship, the most recent being in 2020, when Telcor issued administrative agreement 004-2020, which provides for the obligation to notify the regulatory entity on the appointment of managerial positions in telecommunications companies, for its approval.
Now, with 5G technology knocking on the doors of Nicaragua, it remains to be seen if this will become another source of tension with the dictatorship of Daniel Ortega and Rosario Murillo.
