Why haven't we seen a Latin American killer app yet?

With every new generation of telecommunication networks, experts on the matter share their enthusiasm and make predictions of what the immediate future could bring. I do strongly believe that similar to 4G, when 5G is deployed the world will witness some killer apps. The killer app is a service or platform that does not exist yet, but that will leverage on all the advantages of 5G and become practically indispensable for mobile users.

Besides the key question of what it will look like, it is important for societies to ask themselves where this killer app will come from. The possibilities are very broad: our latest Mobility Report estimates that about 65% of the world’s population will have 5G coverage by 2025. As 3G and 4G proved, mobile connectivity allows a multitude of business opportunities and solutions to emerge from practically every corner of the globe. However, only a few, turn into hugely successful apps. Will 5G democratize innovation ecosystems in the rest of the world? It might, but only if every country is eager to catch up with technology.

We can understand this better by observing two of the largest companies globally. Facebook is currently the 6th most valuable worldwide according to Forbes, with $70.3 billion in brand value and $49.7 billion in revenue in 2019. Mark Zuckerberg founded the social media company in early 2004, two years after the 3G commercial network was launched in the United States. This technology meant a significant improvement for users over what its predecessor, 2G technology offered. 3G provided the ability to download documents, images, and videos within a few minutes, thanks to its internet speed of up to 3Mbps. However, It is not until 4G networks have been deployed paired with the uptick in smartphone sales starting in 2007 that Facebook’s popularity exploded: from 50 million users by the end of that year to 1 billion in September 2012. Nowadays, 96% of Facebook’s 2.5 billion monthly active users access the social network through a mobile device.

Another example is what happened with Uber. The company was created in San Francisco, CA, in 2009, practically simultaneously with the commercial launch of 4G in the U.S. It leveraged on this technology’s capabilities: a minimum speed of 10Mbps and a maximum of 400Mbps became critical for the ride-sharing service. With 4G, riders became able to connect with drivers much faster, and to see their pick-up and drop-off destinations almost in real time. Despite its own financial struggles -Uber is not yet profitable-, the company registered over 7 billion trips in 2019 and has disrupted the global transportation industry. It would be difficult to imagine a world today without Uber and its competitors.

Why weren’t Uber or Facebook born from the minds of entrepreneurs in other regions, like Latin America? The differences in economic development, investment ecosystems and political stability between Latin America and the United States do not paint the whole picture. In fact, Latin American entrepreneurs have created widely successful companies based on mobile connectivity, like Rappi in Colombia, Cornershop in Mexico and MercadoLibre in Argentina. More will probably be created: the region has over 454 million internet users, and venture capitalists are pouring money into regional startups: VC investment reached $4.6B in 2019, according to the Latin America Venture Capital Association. Despite the potential of Latin America, what might be keeping these killer apps from emerging first in the region is due to a simpler reason: the latest generation of telecommunication technologies was not deployed as quickly as in other places. Colombia began to roll out its 3G network in 2009, just when Uber was being created. When Facebook surpassed its 1.4 billion users mark in 2015, 4G networks launched in Mexico. While 51% of the mobile users in Latin America currently have 4G coverage, the rate in the US is 92%. It is not a complete coincidence that the United States is the birthplace of over 65,000 mobile-based startups and LATAM has only produced over 1,300, according to Startup Monitor. How can LATAM entrepreneurs be competitive in the global market if they do not have early access to the latest technology?

It is important to hand the latest technological tools and platforms to entrepreneurs and developers everywhere -especially in regions that are more vulnerable due to the current global health and economic crisis. The good news is that every technology takes less time than its predecessor to be widely adopted. 4G took 4 years to be adopted by the first billion users. How long will 5G take?

Latin America should aim to be within this first wave of adoption, as 5G networks could potentially bring a 5% increase in the region’s GDP by 2030, according to Ericsson’s most recent Mobile report. And technically, the region is ready: since 2015, we have been deploying our Ericsson 5G-Ready radio system, which will allow a fast and cost-effective migration from 4G to 5G.

As the globe is increasingly switching to 5G, Latin America cannot lag behind. We cannot yet imagine how this technology will change our lives, the same way as we couldn’t have predicted in 2009 how 4G would. What we can do is level the field, team up with our partner customers and unleash the potential of 5G and let our innovators use it -everywhere.