First Victory for 5G in Latin America as Chile Reverses 6 GHz Decision

In September, Chilean telecoms regulator SUBTEL repealed its allocation of the entire 6 Gigahertz (GHz) band for unlicensed use, making Chile the first nation in the world to reverse course on 6 GHz. While this may appear to be a remarkable turnaround for the country that was the first in Latin America to release the 6 GHz band, the move is not surprising considering the region’s limited adoption of Wi-Fi 6E and strong pressure to allocate additional spectrum to 5G. The question now becomes whether Chile is a canary in the coal mine for 6 GHz in Latin America, or an outlier that may one day be forced to back-pedal on its decision.

In November 2020, Chile was lauded as a trailblazer as it became not only the first Latin American country to issue a decision on the 6 GHz spectrum, but also the third country in the world, behind the United States and South Korea, to release the entire 5925 – 7125 Megahertz (MHz) spread of the band for unlicensed use. The country’s early-mover status in the region is perhaps not surprising, as the country’s 2020 Gross Domestic Product (GDP) per capita of US$13,231 placed it just behind Uruguay as the most affluent South American nation, and it has a developed broadband market, with VTR (parent company Liberty Global) and Telefónica as the main providers. Moreover, Chile’s allocation of the entire 6 GHz spectrum, and not just the lower 5925 – 6425 MHz as was the case in Europe, can be explained as a policy of pursuing spectrum alignment with the Americas’ behemoth, the United States. The year 2021 saw South American neighbors Brazil, Colombia, and Peru also chose to harmonize with the United States, as did many nations in the broader Latin American region, including Costa Rica, Guatemala, and Honduras. Mexico is dragging its feet, although it is expected to ultimately align with its northern neighbor, the United States, while Argentina is bucking the regional trend by only considering the lower 6 GHz spectrum. Argentina aside, until this month, it seemed that Wi-Fi was winning the 6 GHz battle in Latin America.

Yet, in mid-September, almost 2 years since its pivotal initial 6 GHz decision, Chilean regulator SUBTEL announced its decision to reverse course and restrict unlicensed 6 GHz access down to just the lower portion. Two core factors drove Chile to revise its 6 GHz decision: the national 5G strategy and the progress of Wi-Fi 6E since November 2020. Regarding the former, Chile implemented an ambitious national 5G strategy called “Brecha Digital Cero” (Zero Digital Divide), which in 2022 alone had provisioned for large 5G infrastructure investments to connect 366 prioritized locations, 199 hospitals, 16 regional capitals, 56 provincial capitals, and 358 rural localities. Keen to stimulate 5G, Chile was also the first country in Latin America to complete a 5G spectrum auction, raising US$372.2 million through the sale of 1800 MHz in the 700 MHz, 3.5 GHz, and 26 GHz frequencies in March 2021. Yet, SUBTEL was not content with stopping there, and decided to periodically review spectrum usage to identify underexploited portions that could be reverted to 5G, with the goal of not only expanding capacity, but also spurring further 5G vendor competition, increasing consumer choice and driving down costs. To this end, SUBTEL recently reassessed 3.5 GHz, and is now in the planning stages of auctioning off an additional 200 MHz of the band for 5G. But when it came to the 6 GHz band, the lack of Wi-Fi 6E penetration into the country resulted in the regulator concluding that the 6 GHz spectrum was severely underutilized; therefore, it chose to reduce the amount available for unlicensed uses. The move earned praise from mobile operator organizations, such as the Global System for Mobile Communications (GSMA), which has advocated for more of the 6 GHz spectrum to be reserved for mobile and backhaul services, and will also likely have a far-reaching impact on the region.

Aside from the Chilean announcement, other 6 GHz news in September has been positive for Wi-Fi. On September 2, the Japanese Ministry of Internal Affairs and Communications (MIC) partially revised the Regulations for the Enforcement of the Radio Law Ordinance 59, in the process introducing the lower portion of the 6 GHz spectrum (5925 – 6425 MHz) for unlicensed use, alongside the 5.2 GHz band for Wireless Local Area Networks (WLANs) in automobiles. This was followed by leading Japanese vendors reaffirming their commitment to launching Wi-Fi 6E devices in 4Q 2022 and early 2023, including NEC Platforms’ new tri-band Wi-Fi 6E access points, the Aterm WX11000T12, which supports 12-stream communication, and the 8-stream Aterm WX7800T8. The swift launch of 6 GHz-enabled infrastructure in Japan will spur uptake of devices supporting the new standard, and help to quickly grow the 6E installed base. This contrasts with the situation in Chile, where almost two years after the spectrum was allocated, virtually no devices were using the 6 GHz spectrum. While vendors have reported higher than anticipated demand for Wi-Fi 6E in the United States and Europe, they have also noted only limited interest from Latin American markets. And whereas Japan is introducing Wi-Fi 6E into an environment in desperate need of additional capacity, higher throughputs, and reduced latency speeds, the same demands do not exist in Latin America, where many countries have still not transitioned to Wi-Fi 5, let alone Wi-Fi 6. Therefore, Chile’s 6 GHz early-mover status might have actually worked to Wi-Fi’s disadvantage, as the almost 2 years of inactivity served as proof for SUBTEL that the spectrum has been unutilized. As mentioned above, Argentina is only considering the lower portion of the 6 GHz band, and if Brazil were to follow Chile’s lead and also reduce its unlicensed 6 GHz spectrum access (as it is currently considering), then the southern region of South America would have a strong block of nations that are only supporting the lower portion of 6 GHz for unlicensed use. This may be significant enough to tip the scales and incentivize other Latin American nations not currently seeing significant levels of 6 GHz Wi-Fi usage to follow Chile’s lead.

Despite the reversal of course by Chile, other Latin American nations should be cautious in following Chile’s approach. While 6 GHz may appear dormant at present, this is set to rapidly change with the arrival of Wi-Fi 7 in 2023, which will accelerate the proliferation and adoption of 6 GHz-enabled devices (ABI Research forecasts that 17% of all smartphone shipments will be 6 GHz compatible in 2023, increasing to almost 50% in 2026). 6 GHz will be fundamental to this next Wi-Fi generation, but without access, users will be saddled with highly congested legacy bands and unable to benefit from Wi-Fi 7’s impressive range of new features. Moreover, restricting unlicensed access to 6 GHz will not only put the region out of step with the United States, but also potentially Europe which, alongside the United Kingdom, is currently considering sharing access to the upper portion of 6 GHz between 5G and Wi-Fi. Retaining spectrum harmonization is key to harnessing economies of scale, so losing alignment could exert a significant detrimental effect on the economy. Speaking of the economy, to spur growth, regulators should look to make networks as accessible and affordable as possible, and Wi-Fi is key here. Enterprises are familiar with Wi-Fi as a technology, and it is available at a much lower price point than competing technologies, such as cellular—a factor that is particularly pertinent to cost-sensitive businesses when economic conditions are precarious. Limiting 6 GHz unlicensed access will ultimately deprive businesses of access to low-cost, high-speed networks, as Wi-Fi capacity and performance will be handicapped. As for the hardware itself, virtually all Wi-Fi and 5G equipment vendors are foreign to Latin America, meaning that network investments will, for the most part, not be going to local companies. With this in mind, Latin American nations should seek to take advantage of the recent trend of manufacturing decentralization away from Asia. Spectrum alignment with the United States will mean that Wi-Fi access point Stock Keeping Units (SKUs) produced for the Latin American market will be operable in North America, and vice versa. Thus, Latin American nations could look to position themselves as final assemblers of Wi-Fi equipment heading for North America, which can also be sold locally.

Finally, it is important to not read too much into SUBTEL’s 6 GHz revision. On September 21, less than a week after the Chilean move, Dominican Republic telecoms regulator INDOTEL announced that it would be releasing the entire 6 GHz spectrum for Wi-Fi, proving that there is still momentum behind releasing the full 1200 MHz in Latin America.