Argentina has a well-educated and tech-savvy population, home to 11 of the 34 unicorns in Latin America. The ICT market is a mature sector, with one of the highest broadband penetration rates in the region, where major communications networks are digital but still with limited competition for broadband and mobile telephone services. A major challenge is the need to connect an unequally distributed population in distant, remote, and low-density areas where satellite services may have opportunities. According to the local telecommunications regulator, ENACOM, other challenges include completion of the replacement of copper cables with fiber that combined with the economic challenges have slowed down the roll out of 5G services while completing 4G deployment.
Sub-Sector Best Prospects
Telecom Infrastructure
In the telecom sector, investments focus on four areas: deployment and enhancement of the 4G+LTE network; expansion of broadband Internet access; expansion of data transmission/broadband and content over cellular networks; and satellite services (for remote and rural areas of the country). Even though the Argentine regulator, ENACOM, recently announced 5G band allocation, 5G deployment remains a mid-term reality in Argentina, given the current status of the fiber optic network required for 5G operational implementation. The current fiber optic network covers more than 33,000 km with 85 percent of the fiber “lit” (active), but many localities are still in the dark and Internet speed is 15 percent lower than regional peers. The Federal Internet Plan network will use state-owned telecommunications and satellite company ARSAT’s fiber optic network as a provider of data transport services at a wholesale level and offer access to local internet service providers, co-ops, municipalities, and SMEs. The Argentine government is implementing a “cloud first” policy by investing in and developing a robust national datacenter at ARSAT.
IT Services
IT Services offer opportunities for U.S. companies in network implementation, management and maintenance, legacy applications, RTE (real-time infrastructure) implementation, remote operation processing, back-up, critical mission services, disaster recovery systems, Internet and network security systems, digital asset management, storage, utility computing, and information systems for rural areas. Cloud computing and virtualization-related services will continue to have high demand in 2023. The outsourcing of software development and call/contact centers continues to see new investments, exports, and increased sales in the domestic market. Other market conditions will foster growth in IT services, such as the increased use of online platforms for sectors such as banking, e-commerce, and government, have increased awareness related to information technology security.
Cybersecurity
Argentine companies invested more than $70 million in cybersecurity in 2022, which represents a 15 percent annual increase. Additionally, 85 percent of Argentine companies plan to invest in cybersecurity over the next four years. Despite the recent growth of the local cybersecurity market, this is just the initial stage of maturity. In general terms, cybersecurity technology adoption is between two to three years behind more mature markets. Some of the leading sectors for cybersecurity investment in Argentina include banking, energy (oil & gas), telecommunications, manufacturing, retail, and very recently the public sector.
Opportunities
The Argentine government will continue investing in infrastructure and improving the country’s long delayed implementation of FTTH (fiber to the home). The state-owned company, ARSAT, continues to connect over 1,200 towns in the country with their main fiber network, with an estimated investment of $80 million in the next 18 months.
While there is no confirmed date for the spectrum auction to provide 5G services, once it is launched, this will present opportunities for U.S. companies that provide solutions in sectors such as the Internet of Things (IoT)/artificial intelligence (AI) for specific vertical industries such as automotive, energy, and metal-mechanic; as well as smart cities and e-government.
Web Resources
Argentine Chamber of Software and IT Services Companies - CESSI (Spanish)
For additional information, including market analysis, trade events, contacts, and the products and services that the U.S. Commercial Service can provide to help you succeed in the Argentine market, please contact ICT Industry Specialist Marina Millet.