Buenos Aires, Argentina – About a million people in Argentina could be working online during their country’s current coronavirus-induced lockdown, according to a new report by nonpartisan think-tank the Center for the Implementation of Public Policies for Equity and Growth (CIPPEC). But many of these workers are shut out of the economy because they either do not have internet connections at home or did not buy a computer because they cannot rely on internet service in the communities within which they live.
CIPPEC analysed the ability of Argentina’s labour force to telework during the time of the coronavirus. Its research shows how COVID-19 is exposing shortcomings in the South American country’s telecommunications network that limit worker productivity. Those limits are particularly painful in a country whose pre-virus economy was already troubled. One solution to Argentina’s shortcomings could be to digitise work and embrace fifth-generation telecom technology (5G), so concludes CIPPEC. That option, however, brings with it a tricky political calculus: one of the fastest ways for the country to get 5G tech would be to risk alienating the White House by turning to Chinese firms that have been blacklisted by the United States.
The US and China are involved in a tug-of-war for influence in Latin America and 5G technology is just one battleground. The country is the third-largest mobile services market in Latin America, according to Global System for Mobile Communications (GSMA), a global industry group.
In the last few years, China has become a significant force in Argentina. In 2019, the total trade between the two countries was almost $13bn. Beijing is now Buenos Aires’ second-largest trading partner. Chinese companies now hold more than $12bn worth of investments in the South American country, according to data compiled by the Bank of Spain.
tried to pressure for regulation that would keep Chinese companies out [of Argentina].”]
“China is [a key trading] partner, banker, and investor. Forty percent of [Argentina’s] central bank reserves [are] in Renminbi,” said the country’s former ambassador to Beijing, Diego Guelar, who believes there is a way to carefully engage China while not alienating the US. “There doesn’t have to be a conflict”.
As it revises its rules for tenders of 5G bandwidth, Argentina is shrugging off US pressure to sideline Chinese infrastructure providers. Huawei and ZTE were instrumental in building Argentina’s 4G wireless communications infrastructure. The two Chinese companies are global leaders in 5G technology and are now at the top of a shortlist of companies being considered to build Argentina’s 5G network.
Regional business opportunity
Huawei and ZTE are working with almost all carriers in the country in one capacity or another and have publicly announced plans to expand in Latin America, which has approximately 642 million people.
“We estimate that by 2025, 11 percent of connections will be 5G,” said Alejandro Adamowicz, Latin America Technology and Strategy Director for GSMA. The industry group forecasts total operator revenue in Latin America will add up to $76bn in 2025, up from $67bn in 2018. And even those figures may not capture the full extent of growing demand because the data upon which GSMA’s projections are based were compiled before the coronavirus pandemic forced so many people in Argentina to work from home using internet connections.
For the time being, deployment of the new technology in Argentina is likely to move slowly. Because – while the country is considering tenders to make 5G bandwidth available to operators, it is struggling to avoid a sovereign debt default and trying to mitigate the effect of the coronavirus on its people and economy.
CIPPEC’s data shows the nature of their jobs would allow nearly 3.4 million Argentines to work from home, but a combination of lack of reliable internet connections and the resultant lack of computers reduces this potential figure to 2.1 million.
Despite its relatively slow pace towards building a 5G telecommunications network, the debate over how best to build it shines a light on just how powerful US influence is in Argentina. Last year the US embassy [in Argentina] warned Buenos Aries to tread carefully with China.
“The (US) tried to pressure for regulation that would keep Chinese companies out,” said Sebastian Sebastian Cabello an academic and independent communications public policy consultan.
Argentina has publicly resisted US pressure to sideline these companies.
Industry data suggests, at a more practical level, Argentina may not have an alternative to Huawei and no significant contender from the US. “The US has no supplier. Since Alcatel-Lucent merged with Nokia, it would not be easy for (the US ) to create a new national champion,” Cabello said, a view that is echoed by others.
“Huawei is already an important partner to Argentina, it would be madness to exclude them,” said former diplomat Guelar, who, until just a few months ago, oversaw Argentina-China relations. His view is given heft, by Argentina’s dire economic outlook and the more than one million people who could be teleworking, but instead are at home earning nothing.