CANTO WEEKLY NEWSLETTER -BNamericas

PARAGUAY

New ICT minister Alejandro Peralta says he aims to connect 5,000 schools to high speed internet before the end of the current five-year presidential term in 2023.

Peralta was sworn in on Wednesday after President Mario Abdo Benítez signed off on a bill creating the ministry dubbed MITIC.

CUBA

State-owned telecoms operator Etecsa rolled out an internet connectivity service for rural areas costing a third of that in cities, according to its website.

ARGENTINA

América Móvil’s Claro announced investments of US$100mn to deploy fiber optics networks in the fiber-to-the-home (FTTH) modality in the province of Córdoba.

BRAZIL

Antitrust regulator Cade approved without caveats the transfer of assets of Porto Seguro Conecta, Brazil’s first and largest MVNO, to telecom operator TIM.

PERU

Mexico’s TV Azteca is still evaluating its participation in Peru’s underused fiber optic backbone project as the South American nation is launching a full review of the network, the company said in a statement.

MEXICO

In an interview at Futurecom, the head of Mexico’s telecoms regulator IFT, Gabriel Contreras, talked to BNamericas about the future arrival of 5G in the country.

Mexico has launched a public consultation process on a proposed national infrastructure information system, or SNII, into which companies will enter data on their networks to facilitate the deployment of telecoms and broadcasting systems.

CHILE

President Sebastián Piñera presented a cybercrimes bill after several hacking incidents this year thrust the issue into the public spotlight.

Stakeholders are getting ready for changes in the market structure as Santander says it will end a card contract with the dominant player in the acquisition segment.

URUGUAY

Finally, the central bank rejected a claim against Brazilian banking giant Itaú by Uruguayan payments fintech Paganza over alleged anticompetitive practices.

Transport technologies for smart, sustainable and friendly cities – Regional

By José Orlandini R.

Services Division Manager at SONDA

The Digital Revolution poses several challenges for local, regional and national governments; common to both developed and developing countries. One of the objectives is to plan the urban space based on the smart cities concept; those where a layer of technological solutions has been integrated that improves and supports the daily life of citizens, making their interaction with the different services and productive sectors more efficient.

The strategic focuses of smart cities are security, health, sustainability, education, communications, energy and transport. These areas must be addressed in an integrated and coordinated manner, so that the initiatives around each one result in substantial improvements both in the quality of life of its citizens and in the management of the city by its authorities.

Because of its direct impact on the quality of life of people, transport is one of the basic pillars of the smart city. But, to properly speak of an “intelligent transport,” three key factors must be considered: Collection (collection by electronic means); Information to the user (routes, waiting times, contingencies and parking availability, among other variables); and Fleet Management (integrated control of bus operations and services).

In the field of Payment and Collection Systems, it is essential that people can pay through open technologies. This implies, necessarily, providing more payment options for citizens to choose the most convenient, such as account based smartphones, contactless cards, financial cards (credit or debit), QR codes and mWallets, among others.

Citizens are increasingly digitized and carry in their smartphones such a large data transmission capacity that it seems anachronistic to resort to additional payment cards.

In addition, other advances can be incorporated, such as biometric or facial recognition integrated into the collection system. This is a solution that is used preliminarily in Brazil and, as a pilot plan, in Metro Regional de Valparaíso, where users can only pass through the turnstiles with a QR code, associating the user’s identification or telephone number with a centralized account, which involves a large integrated security support network.

Smart transport must also offer the user more incentives for the system to be virtuous. For example, in Europe, if a person leaves their car in a parking lot near their home, and then travels by bus to work, a reduction in the fare is applied as a “prize.”

It is also essential to have a wide network of commercialization and recharge points that are available throughout the city, not only in the terminals, and to integrate fares between different modes, not only bus and metro.

Smart Collection also implies having an automated loading network, as is already the case on the New York and Panama metros.

Another aspect that we can implement today is the User Information Systems and Fleet Management. For this, it is not enough to have only GPS devices, but also to incorporate advances such as video, 4G networks and Big Data, among others. This will provide information in real time that will improve bus safety and facilitate quick central decisions.

In the field of Information to the User, there is a paradox, because while the authority seeks to encourage the use of public transport, the user does not have the necessary information to opt for it. Therefore, it is necessary to improve this aspect, which is critical for a transportation system to be successful.

Efficient systems have dynamic information panels in buses, stops and streets, as well as applications for telephones, web pages and, above all, an efficient interaction in social networks. This last factor is important, not only for contingencies or crises, but also to indicate, for example, where and at what time the buses pass; or how to combine with other services such as parking lots and transfer stations, among other options.

For this, it is essential to use open information systems. Urban public transport will be truly intelligent when authorities and users cooperate with each other. Therefore, public information must be sufficiently free to allow for better interaction.

DISCLAIMER: The content is entirely the responsibility of the author and does not necessarily reflect the views of Business News Americas. We encourage Guest Column pieces, and those interested in submitting one for possible publication should contact the editor at telecom@bnamericas.com.

Not all (digital) taxes are alike for Mexico’s telecoms sector – Mexico, Regional

Regular taxes versus special taxes. Income tax versus services tax. That debate is going on right now in Mexico as congress is evaluating a special 3% tax on digital service companies, which could add another point of contention to the complex relationship between telecommunications companies and the tax man.

Latin America – and the world – is looking into regulating and taxing the ever growing digital arena, where companies such as Netflix and MercadoLibre long ago stopped being interesting side notes to become financial giants disrupting the sectors they belong to.

Mexico has joined the trend, with discussions regarding how to regulate companies offering services over the internet, as across the world traditional telecommunication companies, retailers and content providers have asked for equal footing, under the banner of “same service, same rules.”

But the most recent initiative to tax the digital economy might be missing the mark, according to experts.

Opposition party PRD recently tabled a bill in congress to tax digital value-added services offered over the internet with a special 3% levy, in the manner of the existing special services tax (IEPS) that is currently applied to telecommunications services in the country and that the industry has repeatedly claimed should disappear.

If made into law, the bill would tax companies using “multifaceted digital interfaces allowing [users] to locate other users and interact with them, while at the same time allowing the delivery of goods or the provision of services … directly among users,” the bill says. In fact, the bill is designed to tax global social networks such as Facebook and e-commerce firms, among others.

It will also tax digital advertising interfaces as well as those that deliver data collected on users, but will exclude content delivery platforms – such as “over the top” (OTT) TV providers – as well as those platforms designed to provide financial services “in a secure environment,” the bill states.

NO SPECIAL TAXES

As e-commerce and digital services increase in magnitude, the document adds, “the need to tax the growing revenues originating from digital services provided by the most important global companies, which are not subject to taxes in our country, despite high revenues obtained in Mexico, can be appreciated.” The tax would apply to companies exceeding annual revenue of 100mn pesos (US$5mn).

Jorge Fernando Negrete, head of local consultancy firm Mediatelecom Policy and Law, said that special taxes, similar to the IEPS that have been heavily criticized by the industry, are a mistake as they will damage access to ICT services and technologies, which are considered a civil right under Mexico’s constitution.

While several countries are starting to charge income tax and sales taxes on these companies, “a special tax is negative, without a doubt, because it punishes the people for exerting their rights,” Negrete said. “Companies will pass it on to the users.” Regular taxes, such as income and sales tax, are already a “lost battle” for digital services companies, he added.

A report by KPMG also said that the fact that locally established companies will also have to pay the tax could be seen as a “technical mistake,” as European regulations it takes inspiration from aim at distributing income from companies located in tax havens.

Intel exploring convergence of digital and physical worlds – Regional

Intel is seeking to bring the digital and physical worlds together through its next generation of processors that are preparing for the data tsunami coming from connected things.

According to Marcelo Bertolami, Intel’s Americas Territory general manager, the fourth industrial revolution is about data, which will grow exponentially, forcing companies to digitize all aspects of their business.

“You have to store, process and take action on that data,” Bertolami told BNamericas in an interview, giving the example of digital signage in which artificial intelligence is increasingly being incorporated into electronic advertising displays to interact in real time with consumers.

“It’s no longer just a sensor capturing data, now it’s artificial intelligence acting on that data. It knows who is in front of the camera and interacts with them, an autonomous vehicle can anticipate potential accidents and avoid collisions,” Bertolami said.

EMERGING TECHNOLOGIES

How is Intel adapting its chipsets to this data revolution? One way is edge computing, in which computation is performed on devices close to where the data is captured instead of being funneled back to be analyzed in a centralized cloud environment. This enables faster decision making and is critical to autonomous vehicles.

Intel is focusing more on the modem computing side of things rather than cellular where it faces fierce competition from the likes of Qualcomm and AMD.

Other solutions are designed to adapt to demands of scalability in a datacenter and increasing workflows, while others are designed to prepare for the arrival of 5G technology, which involves virtualization of networks and new network equipment.

Intel’s new flagship is Optane, which provides higher throughput, lower latency, endurance and advanced memory – a new systems architecture designed for a broad range of emerging market uses.

The company has been working with partners in the ecosystem, including telecoms operators, to adapt chipsets to the new network requirements.

“When you add more performance, video and processing power, today’s solutions are insufficient. With an autonomous vehicle generating 4 terabits of data, you can’t do that with 4G. The future of IoT is with 5G,” Bertolami said.

“There’s going to be an explosion in IoT as there was with cell phones 10-15 years ago. We’ll face similar challenges, complexities and issues of security.”

According to the executive, Latin America has an advantage over more advanced nations in that it has less legacy technology so it can leapfrog to the most modern solutions and networks, like in the case of mobile telephony.

“Each industry will face challenges unique to them with regards to IoT. In transport logistics they’ll need solutions that monitor the temperature of containers where perishable goods are stored. Or for the transport of people other solutions will be required like route tracing, security,” Bertolami said. “This is where the physical and the digital converge.”

Spotlight: Latin America and US tech giants’ results – Regional

US giants Google, Amazon, Microsoft and AT&T all posted strong third quarter results, with Latin America contributing positively for some and impacting others negatively.

In most cases, the regional performance is not detailed or is included in other macro geographies.

Google’s parent company Alphabet, for example, reported “Other Americas” revenues – which exclude the US – of US$1.8bn, up 19% year-on-year and 28% in constant currency.

In a conference call with investors, CFO Ruth Porat said the result reflected the “weakening of the Brazilian real and of the Argentine peso.”

Overall, Alphabet reported stronger revenues and earnings in the quarter, driven by lower effective tax rates and mobile search strengths. Revenues were up 21% to US$33.7bn, with net profit totaling US$9.1bn from US$6.7bn a year before.

As for Amazon, its Q3 earnings beat market estimates, but its revenue and Q4 outlook fell short of expectations and its shares plunged on Friday.

Among the highlights of the quarter, Amazon underscored the launch of the “monthly Amazon Prime membership in Canada and Mexico, quarterly Prime membership in China, and monthly Prime Student membership in Germany.”

Reuters recently reported sources close to the company as saying that the retail giant is looking for land in central Mexico’s Querétaro state to build a fourth warehouse in the country.

Amazon is also looking for storage and shipping partners in Brazil, where it launched its marketplace only last year to expand its local e-commerce operation beyond e-books.

The governor of Brazil’s Ceará state, Camilo Santana, recently received directors from Amazon Web Services (AWS), Amazon’s cloud service. According to newspaper O Povo, the visit was part of a company assessment to expand its datacenter operational bases and points of presence in Brazil.

Ceará capital Fortaleza has become the main hub for submarine data cables in Latin America.

The entourage included the executive responsible for datacenter and infrastructure expansions, Marco Velez; the president of AWS in South America, Paulo Cunha; and the director in Brazil for the public sector, Umberto Mancebo.

None of these subjects, however, was addressed by Amazon during its conference call with investors.

Microsoft, which rivals Amazon in the cloud arena with the Microsoft Azure service, did not specify Latin American performance either although it is said to be looking for a site in Brazil to build a tech support and customer service center.

The company posted a 34% rise in net income to US$8.8bn, with revenues up 19% to US$29.1bn. The Azure division’s sales soared 76% to US$8.6bn.

A recent report shared with BNamericas by market intelligence solutions firm Intricately, which uses a global sensor network that monitors over 15,000 cloud products, showed that Microsoft Azure accounted for 18% of public cloud sales in Latin America. The leader was AWS with 45%.

Another major US company to report its results was AT&T, the country’s largest telco. AT&T is also the third largest wireless network operator in Mexico.

The telco reported 0.7% lower Mexican revenues year-on-year to US$731mn in Q3.

AT&T International’s revenues, including its Vrio pay-TV service that manages the Sky brand throughout Latin America, fell 12.7% to US$1.8bn.

In a conference call with analysts, AT&T executives said the drop in Vrio’s sales of 19.1% to US$1.10bn was mainly due to the depreciation of local currencies against the US dollar in Latin America.

Vrio offers its services in Argentina, Brazil, Chile, Colombia, Ecuador, Peru, Uruguay, Venezuela and parts of the Caribbean.

The information presented and opinions expressed herein are those of the author and do not necessarily represent the views of CANTO and/or its members