What Will 5G Mean for LatAm Mobile Markets?


After years of expectation—and plenty of scary stories—the U.S., China, and South Korea are finally enjoying the hyperfast download speeds and reduced latency that 5G offers to mobile users. And it looks like Latin America won’t be far behind as forecasts suggest 5G will reach Mexico and Uruguay in 2020. In addition, governments in Brazil and Chile—with Argentina set to follow in 2021—are currently auctioning their 5G frequency spectrums to telecoms providers under public consultations.

5G has the potential to be particularly transformative in the region. Smartphones have created a more affordable way to access the internet, and many of the 418 million unique mobile subscribers are reliant on mobile data to access news, information, and services. Fast, reliable service speeds will help to ensure the market continues to mature. Let’s take a closer look at why 5G is vital in Latin America, and what opportunities lie in wait for mobile apps.

Service speeds that suit the market

Latin America has a burgeoning mobile market. The Ericsson Mobility Report predicts that between 2015 and 2021, LatAm will go from consuming 1.2 GB per month on each smartphone to 7 GB. Additionally, it’s one of the most urbanized regions in the world: 80% of the population lives in urban areas, creating huge concentrations of mobile users—and therefore higher demand for data—in these urban zones.

As the number of mobile users continues to grow alongside higher data needs in localized concentrations, existing 3G and 4G networks will struggle to cope. Open Signal found the average 4G download speed in Santiago dropped by 50% during peak hours. For mobile apps this will mean sluggish performance and download delays, contributing to poor overall user experience. The arrival of 5G is set to help solve these problems and ensure that mobile users can enjoy a reliable in-app experience.

5G connectivity for smart cities

Smart cities use the power of the Internet of Things (IoT) to gather data that can be used to improve and automate public services and resources. More than just a tech-lovers dream, smart cities have the power to deliver the benefits of a circular economy and improve the lives of citizens with these efficiencies. Examples include reduced traffic congestion or the ability to adjust streetlamps and public infrastructure based on real-time usage.

The extreme urbanization of Latin America has moved rapidly since 1950, and infrastructures have struggled to cope with the influx of citizens. As such, many governments in the region are pursuing smart city projects, including Brazil, Colombia, and Argentina. The arrival of 5G will boost the potential of smart city projects by ensuring that connected devices and sensors can reliably process data in real-time. Mobile apps that solve a relatable pain point within the smart city sphere—such as healthcare delivery or pollution monitoring—are well placed to grow alongside these projects.

From smart cities into smart homes

5G will also support the personal use of IoT. The use of connected devices and virtual assistants in the home has become commonplace across North America, Europe, and Asia. However, smart home adoption has been comparatively slow in Latin America. Only 1.8% of smart speaker shipments were destined for the region in 2019.

Although cultural factors, such as trust, play a role, the entrance of 5G is expected to boost this marketplace. Revenue from smart home services is expected to show an annual growth rate of 20.5% in South America.

Mobile apps will play a significant role in delivering slick and automated services to homeowners across the region as the popularity of smart homes grows. Mobile apps that can help to automate temperatures, sync grocery shopping, or improve home security could find a new user base as a result of 5G here.

The economic boost of 5G

5G is pegged to boost economic growth globally through the creation of the infrastructure itself and the improved quality of digital markets it will support. Qualcomm predicts that 5G will boost global GDP by $3 trillion and create more than 22 million jobs by 2035.

As Latin America joins the next wave of 5G enabled countries in 2020, it can expect to be part of this economic boost and the subsequent increase in disposable income. 5G in the region will not only support the rapid growth of mobile users with fast and reliable connectivity but create new market opportunities as it enables smart cities and smart homes to become a reality. What’s more, as 5G boosts overall economic growth, more users will have the spending power to enjoy new mobile app services that work quickly, and reliably with hyper connections.