The telecommunication market in our country can be divided into three main areas:
- Fixed line telephone services;
- Mobile telephone services;
- Data transmission and Internet.
These three areas are primarily regulated by the following rules:
(i) Regulation for Telecommunication Service Licenses
In order to provide telecommunication services, the relevant party must have a license granted by the Secretariat of Communications –under federal jurisdiction– authorizing it to provide such utility.
(ii) National Interconnection Regulation (R.N.I)
Under this Regulation, a provider of telecommunication utility must allow the other telecommunication service providers to access the provider’s network, in order to provide their own utilities.
(iii) General Universal Service Regulation (Annex replaced by Decree No 558/2008, section 1)
This Regulation provides minimum conditions to be met by a provider of basic telephone service that is massively provided to the entire population.
(iv) Regulation for Administration, Management and Control of the Radio-electric Spectrum
This Regulation governs the radio-electric spectrum by which wireless telecommunication service is provided. The Secretariat of Telecommunication is responsible for authorizing and allocating frequency bands requested by telecommunication service providers.
9.1. Fixed Line Services
Since 1956, with the creation of Empresa Nacional de Telecomunicaciones (ENTel) by the National Executive, basic telephone services were provided by a government-owned company.
Under the implemented scheme, at the end of the eighties, basic telephone service was provided by ENTel, which operated about 3,300,000 fixed lines, i.e. 90 % of the total number of lines in the country. Two private companies, Compañía Argentina de Teléfonos (C.A.T.) and Compañía Entrerriana de Teléfonos (C.E.T.) (owned by Ericsson operated 6 % of the lines. The other 4 % was provided by about three hundred (300) local telephone cooperatives that provided the service independently since the late 1950s.
With the enactment of the State Reform Law (No 23,696) in 1989, a process began to privatize ENTel, because at the time there was a growing demand for telecommunication services and a need to develop infrastructure and investments. It was then that the National Executive intervened the company and Congress declared it as subject to concession and privatization.
The Decree 62/90 called to an International Public Procurement for the privatization of the telecommunication public utility. On such occasion, the installed telephone network was divided into two large geographic areas: North and South. In November 1990, at the end of the procurement process, Telefónica was awarded the South area and Telecom the North area. The contracts made on such occasion granted licenses including an exclusive permit to the successful bidder to provide basic telephone service for seven years, which could be extended for three more years upon compliance with certain objectives contemplated in the instructions to bidders. However, about 300 independent operators –mostly small and medium-sized cooperatives–, who were not related to the privatizing process, were allowed to continue providing telephone service.
Within the privatizing process, it was determined that services exceeding basic telephone, such as mobile phone and data transmission, would be offered under licenses by the procedure of public competitive bidding.
As the objectives contemplated in the procurement documents were fulfilled by the concession operators, the extension took effect and the exclusive period was extended until November 2000. On such occasion, the National Executive enacted Decree 764/2000 and determined a new regulatory environment for the telecommunication utility.
Under the regulatory environment structured in 2000, basic telephone service is supplied by three types of providers: (i) Historic Providers: Telecom and Telefónica; (ii) Independent Operators: local cooperatives and cities that provided the utility since before it was privatized, and (iii) New Providers: businesses and cooperatives who began to provide the utility once the exclusive period ended.
9.2. Mobile Telephone Services
The invention and development of mobile or cell telephony, one of the major innovations in the history of communications, has also had its impact in Argentina.
Movicom (Bell South) was the company that obtained the first license to operate mobile telecommunication in the City of Buenos Aires, its Surroundings and La Plata, in 1989. It was only in 1993 that Miniphone (owned by Telecom and Telefónica in equal shares) joined and obtained its license to provide the service only in the Metropolitan Area of Buenos Aires.
Since 1995, Compañía de Teléfonos del Interior (CTI) began to operate in the country interior, and in 1986 Telecom and Telefónica obtained licenses to operate mobile telephone in the same geographic areas where they provided basic telephone services, in competition with CTI.
The mobile telephone businesses made large investments to implement digital technologies, which substantially improved utility quality. It was so that in 1997 the Calling Party Pays feature was installed, whereby the cost of calls to cell phones was also paid by those who made the call from a fixed line, which contributed to reduce high initial costs of the utility, and so significantly expanded the number of customers.
In 1999 the mobile telephone market became much more competitive, because the parties operating in the country interior were able to access the Buenos Aires Metropolitan Area, and vice-versa. Also, Miniphone was spun off and the market was shared among CTI, Personal (owned by Telecom), Unifon (owned by Telefónica) and Movicom, who began to operate in the whole country.
At the present time, the mobile telephone utility is provided by three large mass operators: Personal (Telecom), Movistar (owned by Telefonica, formerly Unifon and Movicom) and Claro (America Moviles, formerly CTI). The fourth operator is Nextel, which focuses on the corporate market and provides the Push To Talk (PTT) service.
Unlike what occurs with basic telephone rates –which are regulated by the National Government– the final price of mobile communications is determined by the operators themselves, among whom there is a strongly competitive market.
Since 2006, operators have implemented the European standard GSM, in keeping with the world trend in the matter. Additionally, third-generation (3G) networks have been developed, which has not only made a clear improvement to the voice transmission service, but has also enabled the supply of new advanced and better-quality services, such as high-speed Internet and mobile multimedia.
At the present time, the mobile telephone utility encompasses 45 million terminals, with a penetration of 117 %.
9.3. Data Transmission and Internet
Prior to the procurement process, data transmission services were restricted to corporate customers. After the services were privatized, they began to be provided by Startel S.A. a company owned by equal shares by Telefónica and Telecom. Subsequently, when the telecommunication market was deregulated, Startel S.A. was spun off into two companies, one owned by Telefónica and another by Telecom, so both companies began to provide data transmission services separately.
Internet access services began to have a significant volume of customers in 1997, when flat rates were implemented with reasonable prices for dial-up access.
At present, a customer can access the Internet via broadband connections (by Cable-Modem, ADSL, Wi-Max, satellite, and so forth), which has provided greater speed and larger capacity to deliver and receive contents. Argentina has 3 million broadband connections and a total penetration of 7,8 % among the population, and is one of the countries with the highest index of high-speed Internet connectivity in Latin America. |
