Hoping to lure the investment of Amazon and other companies, Chile is choosing an aggressive, vendor-neutral approach to its 5G expansion, which will place it significantly ahead of other Latin American countries.
In a decision which will no doubt ruffle feathers at the US State Department, the South American nation boldly said, so long as companies (Huawei included) meet “set technical standards” for cybersecurity, Chile will essentially dictate the suppliers it chooses to build the network, confirmed Pamela Gidi, its telecom undersecretary.
According to a report from LightReading.com, this leaves open the door to contracting Huawei, and throws down the gauntlet to Washington, which has sought to exclude the Chinese vendor from the 5G networks of other countries.
The Five Eyes Intelligence group, comprising the US, Australia, the UK, New Zealand and Canada, has essentially told the world, it’s “our way, or Huawei,” in the matter of 5G networks, but some nations are having second thoughts, risking the wrath of Uncle Sam.
Standing firm on its decision, Chile says it will buy 5G kit from either the US or China, as it sets out a 5G rollout that promises to be blistering, at least compared to those of its Latin American neighbors.
“As long as [these regulations] are respected, we neither have nor are we going to influence the supply chain nor the nationality of the companies,” Gidi said.
While this represents an even playing field of sorts, there are other factors at play, as Santiago toys with the idea of striking its own path between Beijing and Washington — Chile’s first- and second-largest trading partners, LightReading reported.
Amazon has flirted with installing a data center in either Chile or its Southern Cone neighbor, Argentina.
“We think obviously [5G deployment] can help in the decision of Amazon and other companies that in the future decide to settle in Chile,” says Gidi.
Microsoft announced a data center region in Chile in December, with President Brad Smith saying the cloud ecosystem will create US$11.3 billion in extra revenue and 51,000 jobs in Chile in the next four years, LightReading reported.
Huawei also announced a second cloud data center in Santiago late last year — a wise move all things considered.
Chile has also been playing a massive cable game of late.
Last April, Google’s 6,500 mile-long Curie cable, connecting California to Chile, landed in Valparaiso, delivering 72 Tbit/s of bandwidth. A branch of this four-fiber pair cable will now connect up to Panama.
And an 8,000-mile Transoceanic Cable will connect Chile with Asia via a fiber route to Auckland and Sydney, LightReading reported.
Meanwhile, China has made substantial inroads, gradually replacing the EU as a trade partner.
For Chile, Peru and Uruguay, China is now their countries’ biggest trade partner.
Certainly during the Trump years, Huawei’s founder, Ren Zhengfei, played a better regional game than the heavy-handed US Secretary of State and Trump’s designated “ugly American,” Mike Pompeo.
The US “treats Latin America as its backyard,” Ren told a newspaper in Brazil.
Huawei’s goal is “to help Latin America get out of this trap and maintain the sovereignty of each country,” he added.
Chile’s 5G contest is currently a game of three players. Last month, mobile operator WOM won a government tender to set up a 5G network, LightReading reported.
WOM, formerly Nextel Chile, passed into the hands of London private equity firm Novator Partners in 2015, owned by the richest person in Iceland, Thor Björgólfsson.
Novator also has stakes in Czech, Finnish, Polish and Greek telcos, and last year bought a majority stake in Colombia’s Avantel, now WOM Colombia.
Spain’s Movistar and Chile’s Entel round out the list of other players who have won licences to provide telecoms services using 5G spectrum.
Local analysts believe WOM is likely to select Huawei as an equipment provider for its 5G build-out, and while it has neither confirmed nor denied speculation, Gidi noted that all licence holders could “make their commercial decisions freely provided the [cybersecurity] technical standards are respected.”
Sources: LightReading.com, DevelopingTelecoms.com, Reuters