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Telecommunications Infrastructure

The following will detail Argentina's telecommunications infrastructure, providing insight into its advancement starting at the 1990s, when the country began to deregulate information and communication technology sectors.

Provided by the Office of Telecommunications Technology, U.S. Department of Commerce, International Trade Administration (1)

Introduction

Argentina boasts one of the most advanced and impressive telecommunications infrastructures in all of Latin American and the Caribbean.  With the 1991 sale of the state-owned Empresa Nacional de Telecomunicaciones (ENTel), a duopoly was created.  Essentially, EnTel was split between Telecom Argentina, which controlled central to northern Argentina and Telefónica de Argentina, which controlled the central to southern region of the country.  To provide long-distance services throughout the country, Telintar, an entity co-owned by Telecom Argentina and Telefónica de Argentina was formed.  This duopoly would last until 1999, when competition would begin to emerge, leading to November 9, 2000, which marked the date that competition was fully opened in Argentina.  However, before this period of time, this duopoly would provide significant infrastructure improvements.  In short, part of their agreement to run Argentina’s telephone services for almost a decade meant that they would need to invest heavily, meeting various quality of service standards (QoS) as well as infrastructure expansion targets.  So, during this period of time, both companies would invest approximately US $17 billion in such improvements and targets. (2)

The telecommunications market in Argentina grew significantly during the 1990s, demonstrating that privatization during a time when global markets and similar industries were growing and expanding internationally, was the only alternative for boosting a country's economy.  Throughout Latin America and the Caribbean, privatization initiatives were spreading and the economic traction for many countries proved that it was the right path to spurt foreign direct investment growth, create immediate, substantial monetary gains for governments for the operating rights, and provide local jobs, among many other benefits.  In Argentina, the figure for telecommunications growth was exponential, compared to previous years.  And, these figures were conceived during a duopolistic regime, which spurred more interest in allowing entrants into the market and increasing foreign direct invest (FDI).  The market grew to over US $10 billion a year in sales with the ratio of lines in service per 100 inhabitants rising from 11 in 1991 to approximately 24 by the end of 2000. (3)  These figures, which showed the lines in service per 100 inhabitants more than doubling, further increased the demand to allow the market to be as free as possible for future growth.

During this period of tremendous growth, Telintar continued to provide long-distance service.  Another company, Startel, was introduced to promote value added services that ranged from data package transmission to data banks. (4)  According to 1999 statistics, the combined turnover of the IT and Telecommunications industries in Argentina exceeded US$ 12 billion, equivalent to 4% of GDP. (5)

For Argentina, the growth of information and communication technology industries stands not only as a source of single economic growth, but also as a foundation to an entire economy, with other industry sectors being influenced by such gains.  This is so because of the aggregate growth of these industries, their highly dynamic nature, and a historical record of expansion (double-digit percentage and even triple-digit growth in certain market divisions) even topping GDP growth. (6)  However, as influential as the telecommunications markets have been historically, economic spillover effects into other sectors was not as influential as experts had predicted once the markets were fully opened.

As previously mentioned, full competition was launched on November 2000. This deregulation affected cellular, paging, trunked radio, data communications, cable television, and value-added services markets.  Currently, the Argentine market for telecommunications equipment imports is open and competitive with many entrants, primarily U.S.-based multinational firms, taking full advantage of this economic opportunity.  It is estimated that such entrants supply half of Argentina’s telecommunications equipment needs. (7)

The privatization of Argentina’s information and communication technology industries has shown tremendous economic gains with a combined 6% growth in 2000, while other industries grew at almost 0%.  The Argentine government has forecast between a US$ 4 – US$ 5 billion in technology and telecommunications investments for 2001. (8)

Main contributors to the country’s telecommunications revenues are as follows:

Hardware and services respectively contributed 38% and 36% of the total information technology sales. (10)

The following three tables and graphs, obtained from Argentina's Ministry of Communications will better illustrate market segmentations, trends, and revenues. (11)

Segmented Total Generated Revenues (2000):

Evolution of IT Market:

Market Distribution (2000):

Frequency Allocations for Argentina

The following link will provide a FREE download (Word document) of frequency allocations for all of Argentina:

Frequency Table

Complete U.S. Department of Commerce Statistics

If researchers are interested in FREE Department of Commerce Statistics on all relevant telecommunications indicators for Argentina, the following links will allow you to download a codebook (Microsoft Word) as well as spreadsheet (Microsoft Excel).

Codebook

Variables