Information Technology in Argentina

Statistics Per 1000 People
	Main Telephone Lines			Mobile Phones	Television Sets
	1984	1995	2000*	1995	1995
Argentina	87	160	204	9.9	347
Brazil	51	75	96	8.0	278
Chile	40	132	254	13.8	280
Uruguay	87	196	327	12.6	305
United States	483	627	686	128	776
Venezuela	66	111	155	18.0	180
* Projected

International Telecommunications

Following privatization, international telecommunication services were granted to Telintar S.A., which is owned 50/50 by Telecom Argentina and Telefonica de Argentina. Since 1990, Telintar has increased digitalization of international lines by 60% and international circuits in operation by 50%. In addition, in June of 1994, four months ahead of schedule, Telintar completed the Unisur project, which involved installing an underground optical fiber and digital cable connecting Argentina, Uruguay and Brazil. The project demanded an investment of US$75 million, of which Telintar put up US$27 million (36%). The remaining 64% came from 20 international companies.

Unisur will link Columbus II and Americas I satellites, thus connecting the American continent to Europe, Asia, Africa and Oceania, Telintar has 2.3% of Columbus II and 5.5% of Americas I. [4]

International Telephone Traffic, 1995
	Outgoing Telephone Traffic, Minutes Per Subscriber	Average Price Per Call, $ Per Three Minutes
Argentina	27	7.37
Brazil	24	4.99
Chile	72	2.79
Uruguay	83	6.17
United States	95	..
Venezuela	52	6.62

Cellular Telephony

In November of 1989, Compania de Radiocomunicaciones Moviles (CRM), a consortium made up of Bell South Corp., Motorola Inc., Socma S.A. (Argentina), and BGH S.A. (Argentine Motorola licensee), launched the first cellular system in Argentina, Movicom. Movicom covers the region known as AMBA, or Area II, i.e. roughly the City of Buenos Aires and Greater Buenos Aires. In 1993, Movistar S.A., made up of the two Telcos, began to compete with CRM in Area II, under the trade name Miniphone. Strangely enough, the competition seemed to awaken a dormant market for cellular telephony. The total number of subscribers increased rapidly. The resulting advertising and awareness campaigns led to a untapped segment of the market to resort to cellular telephony to meet its communication needs. Currently, Movistar (Miniphone), with approximately 105,000 subscribers, holds 43% of the market. CRM (Movicom), with approximately 140,000 subscribers, holds 67% of the market.

In November 1993, Compania de Telefonos del Interior (CTI S.A.), a consortium made up of GTE (23%), AT&T (10%), TCW (5%), AGEA Clarin (Argentina 22%), Benito Roggio (Argentina-20%), and Compania Austral de Inversiones (Morgan Grenfelt-20%), was awarded Areas I and III of the country for cellular services. Area I roughly covers the same territory as the Region North of Telecom and Area III that of the Region South of Telefonica. Combined subscribers are estimated at 200,000.

The year 1996 marked the end of the exclusivity period awarded to CTI, which means that the two Telcos operate a second cellular band in competition with CTI. In 1997, or the year 2000 if the Telcos take the three year option and the Government of Argentina agrees, the cellular phone operators in turn will be allowed to compete against Telefonica and Telecom in providing basic telephony services in any area of the country.[1]

Paging

The market for paging services, which had been confined to medical doctors and salespeople, doubled between April, 1994 and April, 1995. The growth in demand for cellular phones over the last two years has seemed to fuel the need for permanent communication. Pagers are used both as a complement to the cellular phone, which must necessarily be turned-off on certain occasions; by a higher income bracket segment of the population and as a lower priced option, by a lower income bracket segment. In business terms, large firms will buy cellular phones for their staff; small and medium sized companies may purchase pagers; or a company may provide cell phones to its high ranking executives and pagers to other selected staffmembers. The growing demand for paging services is expected to continue as users diversify.[2]

There are basically five companies offering paging services in Argentina. However, Skytel, the local subsidiary of Mtel International, is the only one to cover the entire Argentine territory and to offer international services as well. Radio Llamada, wholly owned by Startel S.A. which in turn is the data transmission company owned 50/50 by both Telcos, covers the City of Buenos Aires, Greater Buenos Aires and seven other cities in Argentina. Radiomensaje is wholly owned by BGH S.A., a Motorola licensee. Through BGH, Motorola has an interest in Radiomensaje, and the ownership is 50/50. Radiomensaje at present covers only the Buenos Aires and Greater Buenos Aires area, but has plans to achieve national coverage by the end of 1995. The other two companies, Audioavisos Bidireccionales and Indicom S.A., are small operations basically concentrated in the Buenos Aires area.[1]

PCS

There are no PCS services in Argentina at the moment. However, Resolution 164 of the Argentine Ministry of Economy entrusts the Undersecretariat of Communications, technical counsel of the CNT, with the drafting of the specifications for the international call for tender for Personal Communications Services. The first area to be awarded would be Area II, which is currently served by CRM S.A. (Movicom) and Movistar S.A. (Miniphone). Resolution 840/95, issued by the CNT on April 4, 1995 determined the allocation of frequencies. Annex II of said Resolution provides: three (3) portions of 15Mhz each and three (3) of 5Mhz with its returns; a total of 120 Mhz in the band of 1700 to 2300 Mhz. The present trend indicates that 1997 will be the year for PCS.[1]   For more detailed information concerning Argentina's PCS Market, read the Spring 1997 Brazilianist.[3]

Satellite

In December 1992, a consortium composed of Deutsche Aerospace (now Daimler-Benz-Aerospace-Germany), Aerospatiale (France), Alcatel (France), Alenia (Italy) and Embratel (Brazil) was awarded the domestic satellite project. The project, being implemented by the firm Nahuelsat S.A., includes launching a geostationary satellite in April of 1997. Starting July 1, 1993, services were provided by two Canadian Anik Satellites, Nahuel C-1 and Nahuel C-2, and operated by the company Paracomsat in the Ku band. This satellite system will complement the land communications already in existence (radio broadcasting, telephone communications and data transmission) and will cover Argentina, Brazil, Chile and Uruguay. Nahuelsat S.A. will invest $200 million in the project. The operating license is for 24 plus 6 years. Telecom Argentina recently acquired 5.57 percent of Nahuelsat. The demand for satellite services is expected to be strong, not only within Argentina but also in the Mercosur countries (Brazil, Paraguay, and Uruguay), as well as the ensuing demand for related equipment. [1]

Cable TV

Much has occurred in the cable TV industry in the last few years, and more is still to come. In mid 1993, four companies became the first MultiSystem Operators (MSO) in Argentina: Fintelco (VCC), Fincable (Telefe-TV Channel 11), Red Argentina-Multicanal (Grupo Clarin-TV Channel 13) and Cablevision (TV Channel 2). Many cable operators in the provinces either sold their systems, went out of business or kept a minority share. The small cable operators that decided to remain have to improve their networks with new technology to meet the demands of their clients and keep up with the times. As a result, these independent operators may well associate under a fifth network, Sociedad Anonima de TV Cable, in order to survive. By December, 1994, the four major networks held 44% of the estimated 4 million total subscribers. The rest is divided among some 1,100 small operators in the provinces. In addition, foreign companies have bought shares in three of them: The Continental Group has associated with VCC (Video Cable Comunicacion), Citicorp Equity Investments with Multicanal, and Tele-Communications Inc. (TCI) with Cablevision. These companies invested a total of $1.05 billion in these operations. The participation of these U.S. companies in the cable TV industry should bring more competition to the sector. Equipment for this industry should flow into Argentina at a high level for years to come. [1]

Domestic Telecommunication Players

In 1989 Argentina began the deregulation and demonopolization of its telephone service with the privatization of the state-owned monopoly, ENTEL. The market was divided between two companies. Telecom Argentina ( owned by Telecom of France) is in charge of the trunk phone network and basic telephone service in the Center-to-North region; and Telefónica de Argentina (owned by Telephonica of Spain), is in charge of the trunk phone network and basic telephone service in the Center-to-South region of the country. These companies will hold a monopoly in these markets until 1997. In return, the companies were required to invest heavily, pledging to meet certain quality standards and service expansion goals. [2]

The Argentine telecommunications market involves approximately US$8.5 billion a year. The ratio of telephones to 1000 inhabitants rose from 87 in 1984 to 160 in 1995, and both companies have plans involving the investment of about US$5 billion each during the next five years (1995­2000). The company Telintar took responsibility for supplying international service and value-added services, such as data package transmission, automated teller machine (ATM) communications, electronic mail, data banks, and similar services.

Telephone centrals and lines installed are distributed throughout the country in direct relation to population. This table includes information on lines installed by the cooperatives that were in operation prior to the privatization of EnTel. The cooperatives were allowed to provide basic telephony services in those areas where EnTel services were not available. There are some 300 cooperatives distributed throughout the Argentine territory.[1]

Diffusion of Private Networks

Argentine companies are investing in WAN technology in response both to clear signs of economic growth, as well as a persistently increasing awareness of the need to face the full glare of international competition from which they were protected until mid-1991. Local firms which are unable or otherwise unwilling to invest in information technology have been disappearing ar a rate which plays a significant role in adding momentum to demand for equipment offering technological recovery and updating. Demand for WAN is especially high in large and medium-sized local companies, i.e. those which already operate with mainframes or minis, and are in the process of rightsizing their installed capacity.

Telecommunications connections, on a national level, are predominant in large companies. Approximately 83% of large companies have established some kind of national link. With respect to international connections, 64% of the large companies also have them in some form. The frequency of the connection varies according to whether it is national or international. National connections have the following frequency: permanent in 88% of the cases; daily or periodic in 12% of the cases, and eventual in only 2% of the cases. With respect to international connections, permanent connections represent only 35% of the cases. Daily or periodic and eventual frequenciees increase to 42% and 23% respectively.[6]

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Privatization and Deregulation

 Last Updated: 5/5/97