Uruguay - Country Commercial Guide
ICT – Computer Hardware and Telecommunication Equipment

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-11-07

Overview

 

2018

2019

2020

2021 (est.)

Total Local Production

n/a

n/a

n/a

n/a

Total Exports

53

50

39

46

Total Imports

604

561

510

590

Imports from the U.S.

115

59

54

63

Total Market Size

551

511

471

544

Source: Transaction database – USD million

HTSUS: 8471, 8473, 8517, 8518, 8523, 8525, 8527, 8528, 8529, 8543, 8544, 9001

The U.S. market share of IT and telecommunications equipment decreased from 19 percent in 2018 to 10 percent expected for 2021 (in second place after China’s 62 percent).  

Uruguay has one of South America’s highest literacy rates (over 98 percent), the telecommunications network is 100 percent digital, and the internet penetration rate is one of the highest in Latin America (90 percent). Since Uruguay does not manufacture computer hardware, further growth in Internet usage is expected to generate greater demand for computer imports.

In 2020, state-owned Antel was the largest overall importer of telecommunications equipment with 19 percent of the total, followed by Spain’s Telefonica with 8 percent and México’s Claro with 5 percent.

Uruguay’s landline density is 34 landlines per 100 people (84 percent residential and 16 percent commercial). Cellular density is 138 lines per 100 people and cellular handsets make up 36 percent of the total telecommunications imports. Three carriers share Uruguay’s mobile market: Antel has a 51 percent market share, Spain’s Telefonica/Movistar has 31 percent of the market, and Mexico’s Claro has an 18 percent market share.

90 percent of the population has access to the internet. 4G/LTE is available in 90 percent of the country, up from 64 percent in June 2019.  Household broadband internet access is 79 percent; over 70 percent of it through fiber-to-the-home (FTTH) systems.  State-owned company Antel has a monopoly in fixed broadband and is responsible for the mass deployment of fiber optics to individual residences.  Antel’s future plans include bringing wireless broadband and additional fiber optic cable to replace old copper connections and connect rural areas of the country to the internet.  Uruguay is currently discussing opening Antel’s network to other operators, which is part of a bill that proposes to reform the audiovisual communication services law.

While mobile penetration is already high, experts believe growth is still possible through the sale of new services, especially for smartphone users.  Content for teenagers and children continues to show strong growth and all three mobile carriers offer LTE–4G services.  In April 2019, Uruguay became the first country in Latin America to implement a pre-commercial 5G service though a small-scale pilot project with a 3.5-3.6GHz range band auction expected in 2022.  In terms of Internet of Things development, public and private stakeholders recently launched the “Open Digital Lab” test space for IOT technologies and applications.  

In May 2021, Uruguay approved the 2025 Digital Agenda, the country’s roadmap for future digital development.  The program is managed by Uruguay’s e-Government and Knowledge Management Agency, Agesic, and will create opportunities for software and hardware providers, as well as telecom and network services companies, among others.  The plan includes expansion of fiber-to-the-home (FTTH) networks to locations with less than 3,000 inhabitants, the assignment of new spectrum bands for mobile technology, increasing 5G coverage and the adoption of digital health services.  In telehealth, opportunities are expected for the development of digital prescription services, the integration of electronic medical records, and the modernization of the medical communication processes.

Cybersecurity opportunities

The government also plans to improve the detection and response to cyber incidents through the implementation of new technologies that allow the application of predictive analysis and automated responses.  The Inter-American Development Bank (IDB) approved an $8 million loan that will support the strengthening of Uruguay’s capacity to protect its digital space by improving its systems to prevent, detect and respond to cyber-attacks.  This loan is the IDB’s first loan specifically focused on cybersecurity.  Uruguay is ranked No. 3 in the International Telecommunication Union’s (ITU) America´s Global Cybersecurity Index and is one of the more advanced countries in the region according to the IDB.  Private companies perceive cybersecurity risk level as high with over 60 percent of respondents in a recent survey replying that they suffered a cyber related incident within the last three years.  The main challenges are the lack of operational capacity to monitor, detect and respond to incidents, as well as the lack of trained cybersecurity professionals.  These challenges create opportunities for U.S. cybersecurity companies who can provide training and software solutions.  The highest demand is for ethical hacking and other preventive measures, followed by advisory services, monitoring, management and incident response. 

Uruguay has a thriving ICT sector representing 3.4 percent of the country’s GDP.  In 2019 (latest available) ICT exports represent 15 percent of the country’s $3.4 billion in service exports; 73 percent of this sector´s exports, equivalent to $655 million in services are purchased by the United States, surpassing Uruguay’s export of goods to the United States.  Uruguayan firms are also interested in opening offices in the United States and represent the largest sector of participants in the Department of Commerce’s SelectUSA foreign direct investment program.

Uruguay has a thriving technology start-up culture and the company dLocal become the first Uruguayan firm to reach “unicorn” status with a $1 billion valuation prior to its listing on the NASDAQ in June 2021.  dLocal is only the second Uruguayan firm to be listed on a U.S. exchange.

Multinational firms also consider Uruguay an excellent information technology hub for back office, data, and call centers.  Companies such as RCI, Amazon, Microsoft, Sabre, and PWC are among the many that have set up operations in Uruguay.

Following a $50 million investment in 2016, the state-owned telecommunications company ANTEL inaugurated a tier III data center, one of five in Latin America (https://www.antel.com.uy/web/datacenter). Note: Data centers fall into one of four tiers, the fourth being the highest.   Tier III facilities guarantee 99.982 percent uptime, no more than 1/6 hours of downtime per year, and N + 1 redundancy.  The media has also reported that Google was in the initial stages of conversations about a potential data center project in Uruguay.  This would be the company’s second data center in the region.

Google announced that it will build a second proprietary Pan-American submarine cable, called Firmina, that will connect the east coast of the United States (probably Florida) to Las Toninas in Argentina, with landing points at Praia Grande in Brazil and Punta del Este in Uruguay.  This cable will be 100 percent owned by Google and it is expected to be installed by 2023 and operational in 2024.  Uruguay has already a subsea cable, called Monet-Tannat, which was developed by Google in conjunction with Uruguayan state-owned telco, ANTEL. 

Uruguay received major recognition for joining the Digital Nations group in 2018 as the sole representative from the Latin American and Caribbean region.  Digital Nations is a collaborative network of the world’s leading digital governments with a common goal of harnessing digital technology to improve citizens’ lives.  The guiding principles of the Digital Nations encourage the development of connectivity, digital citizenship, teaching children to code, open government, open standards, open source, and citizen-centered government.  In this context,

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