How is the Ecuador Digital strategy expected to shape the telecommunication landscape in the country?
Ecuador's government has decided to boost the telecommunications sector and make it one of the most important development engines for the country's growth. For every 10% growth in the spectrum bandwidth, the country can grow 1% of its GDP. Currently, Ecuador has only consumed 26% of the electromagnetic spectrum. Ecuador has an untapped market of 70% that can be used for commercial purposes. The ministry will be allocating 35% of the band spectrum over 2020 for current or new operators. In the last five years, we have received about USD1.7 billion for assigning the spectrum, which can increase as the spectrum is further assigned. Following Chile and Colombia's examples, that money will be reinvested in the sector, leaving us approximately USD1 billion for infrastructure development to generate better connectivity. We are tendering the 700GHz, 2.5GHz, and 3.5GHz bands, which will allow us to initiate 5G coverage deployments. Our first goal is to cover 98% of the country with 4G connectivity by 2021. One way to achieve this is to broaden the spectrum and demand connectivity programs. The second is to use the entire electrical network. Ecuador has one of the biggest electrical infrastructures in Latin America with about 5,600km of electric transmission connected throughout the country. Our legislation allows for the electric transmission to also transmit internet connection. CELEC, the national electricity company, will soon start to be the carrier of internet distributors. The third way is to look for other strategic alliances that allow us to provide internet at a low cost to remote areas of the country. Another objective of Ecuador Digital is to provide e-government solutions through an online platform, www.gob.ec, which centralizes more than 4,000 procedures. We have set up a committee to simplify and eliminate paperwork by 2021 and digitalize about 80% of government-related transactions. Additionally, there are two priority sectors for rapid digitalization: health and education. Only 40% of Ecuador's 12,000 educational establishments are connected, while only 60% of its about 12,000 health centers and hospitals are connected to the internet. Bringing connectivity to these two sectors will create demand for the newly allocated spectrum and boost online education and telemedicine.
Given the planned allocations of spectrum, how is competition expected to evolve among telecom operators in the country?
As we open the spectrum, companies already operating in the market and newcomers will be interested in buying. It is difficult to have more competitors when there are already three in a relatively small country like Ecuador; however, there may be strategic alliances to meet certain needs of the telephone companies in connectivity, internet, voice, data, or deployment. We are facilitating the return on investment with certain legal reforms, and the concessions being made are longer-term. We have started talks with operators such as AT&T and Virgin Mobile to see if they are interested in entering Ecuador. At the same time, the state-owned operator, CNT, will be managed privately, although its assets will remain property of the Ecuadorian state. With privatization, CNT will increase its competitiveness, and thus raise competition standards in the country and improve customer service.
How does the ministry help the private sector in the digitalization of its operations?
Part of the creation of an e-government platform is to build paths for efficient business transactions, such as the setup of a company. Moreover, there are sectors where technology can boost productivity, such as agriculture. Ecuador is an excellent agricultural country, and it has several sub-sectors that need access to connectivity. We have several projects in segments such as shrimp and livestock, where IoT is driving efficiency in production. We are also working on the formalization of e-commerce. We are implementing a national e-commerce strategy with a payment gateway through Ecuador's banking system.