Sergio Massa, the candidate minister of Union for the Homeland, announced this Tuesday the award of three 5G licensesafter the auction in which around US$ 875 millionwhich companies will be able to pay in pesos at the official exchange rate.
Enacom awarded 250 megabytes of the 300 planned, as part of an auction in which the three companies that currently provide mobile communications services participated: Claro, Movistar and Telecom (Clarín).
The company Clear submitted an offer for 100 Mghz per US$350 milliony Telecom did the same with the next batch of 100 Mghz, for US$350 million. While Movistar presented a proposal for a 50 MHz block per US$ 175 million.
Claro, Telecom and Telefónica win
Massa stated at the event that “the income of almost US$900 million is very important in fiscal terms, the valuation of public assets and also in terms of confidence in the private sector. This gives greater support for the closing of the fiscal year “This is an example that you can look at the long term and get away from the electoral issue. I want to thank the three companies that have bid.”
“With the possibility of articulating the deployment and development of this new 5G technology, our citizens have access to greater speed and content transport capacity, and the State has the opportunity to earn almost US$900 million in the next 21 days as part of the payment for use of a public good that companies make,” declared the Unión por la Patria candidate.
Telecom, in an internal communication to its workers, stated that “although it is not the economic moment in the country for a tender of that magnitude, the company’s idea is to take advantage of the spectrum and not let Claro, which is the main competitor, overtake it.” According to the text signed by Roberto Nobile, Gonzalo Hita and Carlos Bardon, “the process will begin in the areas where there are more clients with equipment suitable for 5G: Federal Capital, northern area of AMBA, Rosario and Córdoba.”
The winning companies have from now on a period of up to 15 business days to pay the amount offered. According to the newspaper La Nación, telephone companies can bring dollars from outside their headquarters and settle the dollars through cash with settlement, and with those pesos pay the US$875 million at the official exchange rate. If so, this mechanism, if the spot exchange rate with liqui of this Tuesday is considered, represents an additional profit for companies of around $400,000 million.
The amount of US$875 million is for the purchase of the spectrum, but the firms must invest in the infrastructure and among the main suppliers of 5G technology are the Chinese firms Huawei and ZTE. The US ambassador to Argentina, Marc Stanley, this year expressed “his concern” that China advances in this business. The United States wants to avoid the deployment of Huawei in different countries. What will the United States say about this tender? Will he veto it?
Of course, Movistar and Telecom (Clarín) are large companies with million-dollar profits and now they are adding a new business in the country. Telecom (Personal) earned $37,833 million in the first half of the year. Meanwhile, the Telefónica Group won worldwide 760 million euros (equivalent to $174,166 million) in the first half of 2023, and Claro (América Móvil) worldwide it earned 56,020 million Mexican pesos (equivalent to $655,857 million) in the same period.
While telephone companies earn millions, the purchasing power of telephone workers has fallen in recent years, job insecurity has deepened with outsourcing, and they offer poor quality service to users. However, Massa granted them a large gift, which is added to the concessions to the country’s owners such as a higher dollar for exporters.