The Smart City Market Remains Immature in South America

Before South America can initiate legitimate “smart city” projects, municipalities in the region must first work to close the digital divide that segregates its population. According to a panel of satellite executives active in South America, local governments are only just beginning to explore the potential of the Internet of Things (IOT), and will require better connectivity to roll out smart city applications that improve their citizens’ quality of life.

Mauricio Segovia, Chief Executive Officer (CEO) of Axesat, said that the topic of smart cities is still somewhat premature when it comes to Latin America. “I don’t believe there are any cities that have developed a formal plan of becoming a smart city in the region. What you see is issues related to IOT projects in certain areas of the government, but the reality is this is a matter that is just beginning,” he said.

“The maturity of smart cities in Latin America is not as in other parts of the world,” added Marzio Laurenti, CEO of Telespazio Brasil. “We have not yet identified smart cities as a potential target for our satellites.”

Telesat Brasil General Manager Mauro Wajnberg defined the mission of smart cities as “[optimizing] city functions and [providing] economic growth while improving quality of life for citizens.” He, too, said that it will take time for a true smart city in South America to emerge, but noted that there are some municipalities that “are trying to find ways to be smarter.”

That said, the executives agreed that if and when such projects begin to materialize, satellite will have an important role to play, particularly because the smart city concept relies on “diffusion of connectivity,” Laurenti said. IOT, and likely 5G, will function as the core technologies enabling smart city applications — which is an opportunity satellite companies can take advantage of.

However, as Bart Van Utterbeeck, vice president, South America at Newtec, pointed out, the difference in broadband access between large, coastal metropolitan areas and the interior regions of South America is vast, and a significant constraint. “People in those cities [need] access to 3G or 4G, and 5G in the future. If you don’t have those services there’s no way a certain municipality can launch an application in which the community can participate,” he said.

Bridging this gap will require a mixture of telecommunications technologies, including satellite, fiber and mobile networks. To that point, the panelists echoed comments made during Tuesday’s general opening session, during which major global satellite operators emphasized the importance of converging satellite and other wireless technologies.

“We see the mobile backhaul market as being an important market for South America already for some time. That’s an important way to bring connectivity to the interior of South America,” said Van Utterbeeck. “To bridge the digital divide, it’s really about bringing down the cost of megabits for the user.”

It seems satellite companies operating in the region intend to maintain the status quo when it comes to the supply chain. Telesat, for example, which is launching a constellation into Low Earth Orbit (LEO), prefers to leave interacting with the end user to the established service providers. “We don’t have that expertise,” Wajnberg said. “I wouldn’t dare try to do this type of service better than them. Telesat will remain a wholesale provider and will rely on the service providers to fulfill the needs of the end customers.”

One way in which South America differs from other regions is that a higher ratio of its population lives in urban areas, Wajnberg said. As a result, smart cities there will face a distinct set of challenges in terms of “violence, security, safety and pollution.” Solving some of these issues may require applications unique to the region, he said.

The panelists agreed that no matter what projects are implemented, ensuring such solutions are sustainable over the long term is paramount. “We’ve seen many projects where a new government will come in, spend money and give connectivity to the city — but when the party in power leaves office, the small city cannot pay the bill. And of course, we like to get paid,” said Red 52 General Manager Sergio Murillo. VS