Uruguay’s government transition is going smoothly and no sharp policy shifts are expected, which bodes well for the IT market.
“There shouldn’t be any abrupt change [for the country’s ICT market]. And neither for Uruguay. Most programs in place are state initiatives and continuity is usually respected,” Nicolás Jodal, CEO of Uruguayan IT multinational GeneXus told BNamericas.
“In general, I think we are on the right track with what is coming from the new administration.”
President-elect Luis Lacalle Pou takes office only in March, but most of his cabinet was already announced, including the industry, energy and mining minister, which is responsible for the ICT sector.
The new minister will be Omar Paganini, an electrical engineer, who graduated from Universidad de la República and holds an MBA from Universidad Católica de Uruguay.
Meanwhile, Leandro Folgar, who holds an MA in Technological Innovation, also from from Universidad Católica de Uruguay, will be in charge of the government's digital inclusion program Plan Ceibal.
The program was launched in 2007 to support educational policies with technology. Each child in the public education system has access to a computer for personal use with a free internet connection from the educational institution.
A PARTICULAR MARKET
In many parts of Latin America, public companies are associated with inefficiency, weak results, poor performance and even corruption.
In Uruguay, though, key state-owned companies are reference in terms of innovation and lean governance, although the private sector plays an important role in the country and will continue to do so.
Under Pou’s center-right government a greater focus on public-private partnerships and services concessions is expected.
“Uruguay is quite a unique market with a state-owned company that has helped the country achieve the largest FTTH penetration in the region and the first 5G launch,” Sonia Agnese, senior Latin American analyst at Ovum consultancy, told BNamericas.
Agnese referred to state-telco Antel and its claim of having activated, last April, Latin America’s first 5G commercial network – although this is disputed by some analysts.
The country's fiber optics network, managed by Antel, reached 11,730km connecting all 19 departments in 2018, according to data from national telecoms regulator Ursec.
That means FTTH penetration of 75% of households, which is one of the highest rates in the world. Of all fixed broadband accesses in the country, 72% were faster than 10Mb/s, according to Ursec.
Another example of a successful state body is Agesic, the country’s e-government and information society agency.
Founded in 2005 under the first government of Tabaré Vázquez, Agesic is responsible for government digitization and for some ICT programs and initiatives.
Driven by Agesic, 100% of central government procedures in Uruguay can now be initiated online and 70% can be initiated and completed digitally. The agency aims to reach 100% completion in 2020.
Uruguay also reaches a "very high" score in the UN's latest E-Government Development Index (EGDI).
As a result, Uruguay was invited to join in 2017 the D-9, a group of countries which are considered to have advanced digital public services. Mexico is the only other Latin American country in the group.
According to the latest edition of a wide-ranging “digital citizenship” study by Agesic, 92% of Uruguayans had internet access at the end of 2018.
GOING OVERSEAS
For local ICT companies, one of the greatest hurdles is the small size of the domestic market.
With a limited consumer market - Uruguay has just over 3.5mn inhabitants - internationalization is almost inevitable for some enterprises, principally those operating in a niche technology segment.
"I think [going overseas] came as a natural move. We’ve always had important clients locally, but our segment, software, is very specific," GeneXus’ Jodal said. “We had to look to the world. At this moment, our greatest market and greatest focus is on Asia.”
GeneXus is Uruguay’s software powerhouse and the country’s largest IT group.
Founded in 1988 as Artech, it was later rebranded to "GeneXus," in line with its most famous product.
GeneXus has operations in 45 countries, while Latin America accounts for a third of GeneXus’ revenues and Asia for 55%.
“What drove us there was precisely the market size potential,” Jodal said.
TELECOM COMPETITION
Mobile telephony, however, is dominated by Antel. The state-owned telco had 53% of the market by the end of 2018, with Telefónica's Movistar in second place (31%) and América Móvil's Claro third position (16%), reports Ursec.
Uruguay had 5.43mn mobile lines in 2018, 3.26mn of which were prepaid. 4G mobile networks cover 99% of the territory.
But Telefónica's decision to spin-off its Spanish-speaking regional operation could shake the market up.
“Telefónica's recent announcement could change a bit the current scenario, as the company is the main challenger to Antel in the mobile segment,” said Ovum’s Agnese.
Yet, investments continue: Movistar just paid US$28mn for four lots in the auction of the 2.6GHz, 1.8GHz and AWS bands, held earlier this month.
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Quelle/Source: BNamericas, 02.01.2019
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