Narayan AmmachchiA mere 10% increase in mobile broadband penetration could create more than 6.5 million jobs and cause a jump of 1.7% in the region’s per capita GDP, according to a study conducted by telecom firm Millicom (Tigo).
Lack of competition among telecom operators, high spectrum cost and legacy regulatory frameworks are the factors driving up telecom prices in the region. These turn the high prices of Internet service into a barrier to digital transformation in the region, according to the report.
“Governments in the region must modernize their regulatory frameworks to attract investment in the sector. Above all, the reduction of spectrum prices and of regulatory and tax charges would produce the greatest stimulus for investment,” said Karim Lesina, EVP for Millicom.
Spectrum costs are not so high in OECD member countries, such as Mexico, but the region as a whole is very expensive in terms of radio frequencies, the report noted. The cost of spectrum in Latin America is 1.7 times greater on average than in Europe.
“Many governments in Latin America continue to view spectrum as a source of income rather than as a lever to spur faster digital adoption,” the report explains.
Broadband is a digital highway. Therefore, it is just as crucial to economic growth as physical infrastructures such as airports, roads and bridges.
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