Plug Me In

THE AUTHORITIES

The drafting and execution of ICT policies and regulation of telecommunications and ICTs falls to four state agencies. CONATEL, the sector watchdog, the National Television and Radio Broadcasting Council (CONARTEL), which regulates and authorizes radio and television broadcasting services, the National Secretariat of Telecommunications (SNT), which actions telecommunications policies, and the Telecommunications Superintendent’s Office (SUPERTEL), which has final say on telecommunications services and the use of the airwaves.

The pace of technological advance picked up in 2006 when CONATEL canvassed public and industry opinion on a national ICT strategy. As Global Information Society Watch put it, “CONATEL acknowledged the lack of a comprehensive state policy, and in doing so, it predefined a thematic agenda that sought to align efforts in the ICT sector with broad socioeconomic and developmental goals.” That was a wakeup call the current government, in power since 2007, has built on.

The government aims to ensure universalization by increasing teledensity, yet certain trends borne out by industry data—and familiar to many emerging markets—suggest there is still some way to go. The market penetration rate for mobile phones according to BuddeComm is high, at 113% (2014e); this is also due to less than universal landline (16% penetration) provision in the mountainous Andean nation.

YACHAY

René Ramí­rez Gallegos, National Secretary of Higher Education, Science, Technology and Innovation in a TBY interview spoke of, “increasing [education] expenditure budgets—from 1.1% to 2% of GDP,” since 2007. Ecuador has also upped its research, innovation, and technology budget from 0.2% to 0.72% of GDP. Meanwhile, the poster-boy for Ecuador’s scientific leap forward is the Yachay “City of Knowledge,” the word borrowed from the indigenous Kichwa language. With a land allocation of 44 square kilometers, the scheme has at its core a university, and is envisaged being a home for diverse incubator companies, and a lightning rod for innovation. “Yachay will be the innovation center of Ecuador; a city, a company, and a university representing the innovation system of the country,” Ramí­rez Gallegos explained. “It has to work also as a specialized cluster where people will live and generate innovation, knowledge, research, and future developments for Ecuador.” Meanwhile, Héctor Rodrí­guez, CEO of Yachay Public Company, describes the project as more of an industrial paradigm shift. “In the 1970s, we developed Petroecuador to create an oil-based economy, and in the 1980s we created Corporación Nacional de Telecomunicaciones (CNT) to develop the ICT sector. We have developed Yachay because technology and knowledge underpin the future.” In that sense, “Yachay University bridges the gap between basic and applied research and the end product.”

INTERNET

Broadband penetration is estimated at just 7.7%, although dial-up services have a rate of around 70% according to Jaime Guerrero Ruiz, Minister of Telecommunications and Information Society. He told TBY that, “We currently have the fastest internet in the region at 3.6 Mb/s,” adding that, “five years ago there was only 3,000 kilometers of optic fiber in the country, whereas today the figure has reached 35,000 kilometers.”

Internet service providers as of June 2013 numbered 327, and SENATEL data put the number of internet cafes as of February 2014 at 2,386. Meanwhile, total internet subscriber numbers had reached 4.69 million, of which 996,217 were fixed-line users and 3.69 million mobile users, while the teledensity ratio stood at 29.96%, almost double the 2011 figure of 14.58%.

And in a landmark development late 2014 is set to see the completion of the Pacific Caribbean Cable System (PCCS) submarine high-speed link. With existing links short on capacity, the new line, at 6,000 kilometers, and running from Jacksonville, Florida to Manta, Ecuador, will boost Ecuador’s internet capacity by an estimated 160 times.

TELEPHONY

There are seven fixed-line operators in Ecuador. State-owned CNT, in commanding the fixed-line market, by extension also rules the roost for ADSL delivery, the service becoming available to Ecuadoreans in 2009.

MOBILE

Ecuador’s telecommunications sector has grown rapidly since 2000, when the telecommunications market was liberalized. Central Bank of Ecuador (BCE) data puts overall sector growth at 22.7% from 2004 to 2005, which contrasts starkly with sector growth of 11.2% from 1999 to 2000 and just 0.1% in 1994. Yet the most outstanding statistic is that of mobile phone use, which rocketed 9,970.4% from December 1996 to December 2005. According to SUPERTEL, which monitors and regulates the national telecommunications and radio frequency spectrum, by November 2006 there were 8.19 million mobile phone users among a population of 13.52 million. Official data for 2012 reveals a higher print of 16.39 million total subscribers, of which the vast majority, at 13.62 million were pre-paid users, and just 2.77 million post-paid. Number portability in Ecuador was introduced in October of 2009, and readily taken up. National Telecommunications Secretariat (SENATEL) data puts the cumulative total of ported mobile phone numbers as of Oct 6, 2014 at 1.125 million users. In pursuit of greater sector accountability, as of July of 2014 according to SENATEL, Ecuadorean mobile operators are obliged to meet stipulated customer service quality parameters updated by CONATEL. These also encompass the aspects of cost and coverage. In 1Q2014, a $138.5 million fine levied by the Superintendency of Market Power Control on number one mobile provider Claro for anti-competitive practices was overturned.

NOT JUST CONSUMING

According to the Ecuador Times, the Florida-based company Yezz—present in 12 Latin American markets—in October 2014 introduced its first Android smartphone, the Andy 3.5, assembled in Ecuador. Costing less than $200 in the local market, the brand hopes to cash in on high mobile penetration and subsequent data sales. Its Development and Manufacturing Electronic Ecuadorian plant (DMEE) located in Carcelén, has a monthly capacity of 35,000 units, but ultimately aims at 70,000.

THE PLAYERS

Effectively a duopoly, Ecuador’s mobile sector is shared among América Móvil’s Conecel (trading as Claro), Telefónica’s Otecel (trading as Movistar), with CNT (previously Telecsa/Alegro) holding a slender market share. Late in 2013, the industry watchdog granted additional spectrum to CNT enabling the delivery of LTE services.

Reaching around 85% of the population according to BNAmericas, Conecel (Claro) offers both pre-paid and post-paid wireless services, as well as internet, paging, and data transmission. In 2012, Movistar gained some ground on market leader Claro, despite having less than half of the latter’s subscriber base. SUPERTEL data put Claro’s share modestly down from 70.0% to 69.0% for the year, while Movistar rose to 29.3% YoY from 28.4%. State-owned CNT retained its 1.7% market share at the end of 2012. For the year the mobile market registered subscriber growth of 7.7%.