5G will enable the integration of new technologies such as big data, artificial intelligence (AI), and the Internet of Things (IoT).
Central America is at a crucial moment in its journey towards digitalization, in which the adoption of 5G plays a fundamental role. According to the report "5G Use Cases in Vertical Markets in Latin America and the Caribbean" by 5G Americas, the Latin American region and the Caribbean will have 127 million 5G connections by the end of 2024 and can further jump to 501 million four years later.
This advancement not only implies better connectivity but also opens the doors to a series of opportunities that could transform the regional economy. Its deployment will allow the integration of advanced technologies such as big data, artificial intelligence (AI), and the internet of things (IoT), which sets the stage for greater productivity, increased demand for technology products and services, as well as the acceleration of other industries ultimately the attraction of foreign direct investment. For this to happen, the region will need critical digital infrastructure to enable 5G.
Challenges in the region
For 5G mobile networks to advance quickly and efficiently, vertical marketswill need to investment in critical infrastructure, including cooling systems that remove heat to enable continuous operation, technologies to remotely monitor and manage 5G, and power technologies that optimize energy use and minimize environmental impact.
According to Vertiv studies, the transition to 5G is expected to increase overall network energy consumption by 150-170% by 2026, with the largest increases in the macro, node and network data center areas. To cope with 5G deployment and infrastructure, operators may consider massive infrastructure deployments in short periods of time to meet demand. As a result, a large number of access sites are expected to be monitored and maintained. A remote monitoring solution would be essential to minimize operational costs and ensure that all sites are managed intelligently and efficiently.
To achieve all this, however, the countries of Central America must work on agendas to close the digital gap and be competitive with the rest of the world. On average, 84% of the population in the countries of the Organization for Economic Cooperation and Development (OECD) use the internet, while in Central America, Panama, and the Dominican Republic (CAPARD), the figure is 47%, a number that potentially indicates difficulties and unaddressed challenges especially due to infrastructure and broadband deficit issues revealed in its 2020 IDB report.
The potential economic impact of 5G in Latin America
While 5G will enable the possibility of having a million connected devices per square kilometer, an advanced digital environment also increases the demand for technological products and services, as well as the creation or acceleration of other industries. Furthermore, infrastructure upgrades would attract foreign direct investment (FDI) from technology companies and startups to develop and test new applications and services, creating and highlighting job opportunities for Central American talent.
Studies from GSMA show that 5G can contribute approximately $41 billion to Latin America’s GDP by 2030. This is due to the benefits associated with improved connectivity and the creation of new industries. Some of the sectors that I see having a significant impact with the digitization and adoption of 5G are:
- Health, especially in telemedicine and access to advanced medical services
- Education, wherein students, educators, and other education stakeholders can access digital educational resources and the expansion of distance learning
- Agriculture, through the implementation of IoT technology to improve efficiency and productivity
- Industry, thanks to the automation and digitization of industrial processes that can push for digital twins in manufacturing and processes
- Tourism, as it will facilitate and enhance the experience through the development of digital applications and services.
In the early stages of 5G deployment, much of the development will be on the infrastructure side. Existing infrastructure will need to be upgraded and new hardware will be invested in to support the increased demand.
Sectors that could benefit quickly from the arrival of 5G in the region are agriculture and tourism, both of which are vital to the countries' economies. In agriculture, 5G could enable the use of sensors to monitor crops and pests, improving productivity with real-time data. In tourism, the automation of scheduling tours and the use of applications to explore historical and natural sites would provide a unique visitor experience.
Although there are no statistics by sector, from my point of view, education and industry are the ones that could benefit from 5G in the medium term, because they need less investment, compared for example with healthcare, which may be later to adopt due to the cost and complexity of patient monitoring and remote surgery.
Addressing the challenges of adoption will accelerate the deployment of 5G, advance the digitization that Central America needs. This will enable tools that can improve the region’s ability to create a productive environment that can create livelihoods, provide more opportunities for foreign investments, and boost the economy. Companies that are prepared for early adoption will be well-positioned to benefit from the many opportunities of digital transformation.
