Overview

Computer Hardware and Telecommunication Equipment

The U.S. market share of I/T and telecommunications equipment decreased from 19 percent in 2018 to 10 percent in 2021 (in second place after China at 61 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 and other hardware imports.

In 2021, state-owned ANTEL was the largest overall importer of telecommunications equipment with 16.4 percent of the total, followed by Spain’s Telefonica with 6.7 percent and México’s Claro with 3.1 percent.

Uruguay’s landline density is 35 landlines per 100 people (85 percent residential and 15 percent commercial). Cellular density is 159 lines per 100 people and cellular handsets make up 31 percent of the total telecommunications imports.  Three carriers share Uruguay’s mobile market: ANTEL has a 54 percent market share, Spain’s Telefonica/Movistar has 28 percent of the market, and Mexico’s Claro has an 18 percent market share.

Over 90 percent of the population has access to the internet and 4G/LTE is available in 92 percent of the country. Household broadband internet access is 88 percent; 81 percent of it through fiber-to-the-home (FTTH) systems.  ANTEL plans to bring 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 the future.  In terms of Internet of Things development, public and private stakeholders launched the “Open Digital Lab” test space for IOT technologies and applications.  In June 2022, Microsoft announced its intention for Uruguay to host its AI & IoT Insider Lab, the first of its kind in Latin America and the third outside the United States.  This lab will help solve various technological challenges for organizations in the region, as well as obtain expert guidance and recommendations to realize the full potential of artificial intelligence and the internet of things.

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.

Since June 2022, five cable operators have been granted permission to offer Internet services, ending the telecommunications state-owned company’s monopoly in the subsector.  Additionally, a new Media Law is currently being discussed in parliament which could potentially restructure the sector further.

Source: Transaction database – USD million

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

Leading Sub-Sectors

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 that can provide training and software solutions.  The highest demand is for cyber training, and preventive measures, followed by advisory services, monitoring, management and incident response. 

In 2020 (latest available) ICT exports represented 15 percent of the country’s $3.4 billion in service exports; 74 percent of this sector´s exports, equivalent to $668 million in services, are purchased by the United States, surpassing Uruguay’s export of goods to it.  Uruguayan ICT 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.

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 to Argentina, with landing points in Brazil and Uruguay.  This cable will be 100 percent owned by Google and it is expected to be installed by 2023 and operational in 2024.  Uruguay already has 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.