5G Internet for everyone
5G Internet for everyone
Business Model Description
Deploy 5G network infrastructure and equipment for telecommunications operators to meet the growing demand for fast and accessible internet.
Expected Impact
Investment in telecommunications infrastructure will reduce the digital divide of the Dominican population.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
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Country & Regions
- Cibao Norte
- Cibao Sur
- Cibao Nordeste
- Cibao Noroeste
- Valdesia
- El Valle
- Enriquillo
- Yuma
- Higuamo
- Ozama
Sector Classification
Technology and Communications
Development Need
The digital divide persists in the DR. 91.7% of Households have access to an ICT device/service (2). However, only 56% of households have a fixed Internet connection (3). This limits their productive development and opportunities for access to quality services because they are on the margins of technological development, with this gap being more significant in rural areas (4).
Policy Priority
The National Development Strategy establishes its specific objective 3.3.5 to achieve universal access and productive use of ICTs (5). Likewise, it established its roadmap towards digital transformation embodied in the Digital Agenda 2030 (6).
Gender Inequalities and Marginalization Issues
Only 39.0% of women were employed in the ICT sector in 2018, representing a high gap in access to specialized work considering that this is a high-income sector (7). By 2021, the enrollment of women in the ICT knowledge area represented 21.6% in contrast to 78.4% of men enrolled in higher education (8).
Investment Opportunities Introduction
This sector represents an attractive, high-growth market with great investment potential. In 2022, the communications sector grew 4.6% in its contribution to GDP (9). In addition, the flow of foreign direct investment to the telecommunications sector in 2022 totaled USD 191.9 million (10).
Key bottlenecks Introduction
High infrastructure costs represent one of the main bottlenecks in projects related to telecommunications services. Regulatory issues such as licensing and spectrum allocation may limit investment projects in this sector (11).
Telecommunications
Development Need
The Dominican Republic needs an estimated fixed and mobile CAPEX investment totaling USD 872,671,618.37 million to generate 315 thousand jobs and close the digital gap that exists in comparison with OECD member states. According to the Broadband Development Index, this country ranked 52nd out of 65 in 2020 (12).
Policy Priority
The Digital Agenda 2030 prioritizes the objective of connecting Dominicans to affordable broadband internet in its Connectivity and Access pillar to close the digital divide and develop an inclusive digital economy (13). This is supported by other policies, such as establishing the national broadband plan and infrastructure (14) (15).
Gender Inequalities and Marginalization Issues
Women in vulnerable situations and areas with low levels of access and connectivity may contribute to higher levels of inequality. On average, women are less likely to have access to a cell phone. The latter being an essential tool for combating inequality (16).
Investment opportunities introduction
Between 2010-2017, public investment in telecommunications infrastructure averaged 0.001% of GDP (14). In 2021, telecommunications investments increased by 66.0%, with a calculated dollar estimate of USD 372.16 million (17).
Key bottlenecks introduction
The incorporation and regulatory compliance processes could slow down the implementation of the investment (11).
Telecommunication Services
Pipeline Opportunity
5G Internet for everyone
Deploy 5G network infrastructure and equipment for telecommunications operators to meet the growing demand for fast and accessible internet.
Business Case
Market Size and Environment
US $146 million in investments (9)
In 2022, foreign direct investment in telecommunications represented an estimated USD 191.9 million (10). Specifically, investment projects aimed at expanding 5G networks represented a total of USD 146 million, where 5.36% of the population has access to 5G signal coverage (17).
Indicative Return
15% - 20%
A study conducted in Indonesia on the development of 5G infrastructure found that returns on investment vary according to the place where they are established. For example, in Jakarta the IRR was 209.8% and in Bandung 18% in less than 4 years (18).
One of the barriers to implementing 5G technology projects is the need for more information to analyze investment returns and their value (20). The revenues obtained, for example, from B2B modules in IoT modules can represent a total of USD 10 billion globally (21).
Investment Timeframe
Medium Term (5–10 years)
In the case of projects related to the acquisition of concessions for the use of the spectrum in the Dominican Republic, it is up to 20 years (22)
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Market - High Level of Competition
Business - Business Model Unproven
Impact Case
Sustainable Development Need
Only 46.1% of households in the Dominican Republic have access to fixed Internet (17).
The broadband lines with fiber optic access per 100 inhabitants is 1.3% (12).
Gender & Marginalisation
According to ENHOGAR 2021, considering the population residing in rural areas, 26.8% indicated that they used a computer, and only 75% used the Internet (27).
Expected Development Outcome
Increase the percentage of households with access to fixed internet in the Dominican Republic.
Increase the number of broadband lines with fiber optic access per 100 habitants.
Gender & Marginalisation
Reduce the digital divide in the Dominican Republic by increasing the percentage of the rural and semi urban population with access to telecommunications services such as internet and telephone.
Primary SDGs addressed
9.c.1 Proportion of population covered by a mobile network, by technology
The population covered by at least one mobile network 35 for 2018 was 99.15% (28).
Increase the number of residents connected to broadband internet, the population's capabilities in digital technologies and to digital technologies and leave an integrated digital ecosystem (29).
17.8.1 Proportion of individuals using the Internet
The percentage of the population aged 10 years and older that used the Internet in the three months prior to the survey is 84.4% (2).
Increase the percentage of people using the Internet, from 74.82 to 90.69 (29)
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
Risk of increased anticompetitive practices in the telecommunications sector (11)
Regulatory sector may not be at the forefront of new business models in the use of 5G technologies (24)
Investments may only benefit urban areas if they are not oriented towards places with less access
Gender inequality and/or marginalization risk: Increase the number of cases of cybercrime or cybercrime cases towards vulnerable population.
Impact Risks
Dependence on 5G networks from a small group of suppliers (31).
Increasing number of demand for 5G connectivity and little spectrum space to offer more access
Lack of information and evidence of technology use and expansion
4G mobile devices still dominate the market, representing 74% of all subscriptions in Latin America, resulting in a slow adoption of 5G (32)
Gender inequality and/or marginalization risk
Impact Classification
What
Increased accessibility to telecommunication services.
Risk
Failure to develop the project could lead to an increase in the digital divide and inequality in the Dominican Republic.
Contribution
Expansion of 5G connectivity.
Impact Thesis
Investment in telecommunications infrastructure will reduce the digital divide of the Dominican population.
Enabling Environment
Policy Environment
National Development Strategy 2030 creates the primary conditions that favor the synergy between public and private actions for achieving the Nation's Long-Term Vision and the Strategy's Objectives and Goals (5).
The Digital Agenda 2030 established as a national priority to expand the national fiber optic network (6).
Presidential Decree 539-20 establishes as a national priority to define a National Broadband Plan to guarantee universal access to last generation internet and the productive use of ICT (14)
The objective of the National Frequency Allocation Plan, also known as PNAF, is to optimize and rationalize the use of the radio electric spectrum in order to timely and adequately satisfy frequency needs (34)
Financial Environment
Financial incentives: Foreign investors, whether natural or legal persons, have the right to remit abroad, in freely convertible currencies, without the need for prior authorization (39)
Other incentives: Residence Permits for Investment Program, through an agreement with the General Directorate of Migration, having as a prerequisite the Certificate of Registration of Foreign Direct Investment (39)
Regulatory Environment
Law No. 47-20 on Public-Private Partnerships that establishes the regulatory framework that regulates the initiation, selection, adjudication, contracting, execution, monitoring and termination of public-private partnerships throughout the national territory (35)
Law No. 344-43 on Expropriations, which grants the Executive the power to authorize the expropriation of property for duly justified reasons of public utility or social interest (36)
Law No. 153-98 – General telecommunications that created the Dominican Institute for Telecommunications to regulate the telecommunication sector (37)
Decree 629-07 creating the dominican electric transmission company (38)
Marketplace Participants
Private Sector
Telecommunications companies
Government
The Dominican Institute of Telecommunications (INDOTEL), Dominican Electric Transmission Company - ETED and Governmental Office for Information Technology and communications - OGTIC, DGAPP, DGCC and others.
Multilaterals
Interamerican Development Bank, International Telecommunications Union, World Bank, UNDP and others.
Non-Profit
Public-Private Partnership
Target Locations
Cibao Norte
Cibao Sur
Cibao Nordeste
Cibao Noroeste
Valdesia
El Valle
Enriquillo
Yuma
Higuamo
Ozama
References
- (1) Indotel, 2022. Desempeño de las telecomunicaciones 2021. https://indotel.gob.do/wp-content/uploads/2022/12/informe-desempeno-de-las-telecomunicaciones-2021.pdf
- (2) ONE, 2023. National Multi-Purpose Household Survey 2022. https://www.one.gob.do/publicaciones/2022/encuesta-nacional-de-hogares-de-propositos-multiples-enhogar-2022-informe-basico/?altTemplate=publicacionOnline
- (3) Srinivasan, S. et al., 2022. Internet access and use in Latin America and the Caribbean. Results of the LAC High Frequency Telephone Surveys 2021. https://www.undp.org/sites/g/files/zskgke326/files/2022-09/undp-brlac-Digital-ES.pdf
- (4) IBD, 2021. DR-L1147: Program to Improve Connectivity for Digital Transformation in the Dominican Republic. https://www.iadb.org/en/project/DR-L1147
- (5) Law 1-12 National Development Strategy 2030. https://mepyd.gob.do/estrategia-nacional-de-desarrollo-2030/
- (6) Agenda Digital 2030 – República Dominicana. https://agendadigital.gob.do/documentos/
- (7) ONE, 2020. Survey of Human Resources Demand in Information and Communication Technology and University Business Cooperation in the Dominican Republic 2019.https://www.one.gob.do/publicaciones/2020/encuesta-demanda-de-recursos-humanos-en-la-tecnologia-de-la-informacion-y-la-comunicacion-y-cooperacion-empresarial-universitaria-en-la-republica-dominicana-2019/
- (8) MESCYT, 2022. Higher Education Data 2021. https://mescyt.gob.do/transparencia/wp-content/uploads/2022/10/DATOS-DE-EDUCACION-SUPERIOR-2021-MATRICULASEGRESADOSDOCENTES-E-INVESTIGADORES.pdf
- (9) Banco Central, 2023. Dominican Economic Report 2022. https://cdn.bancentral.gov.do/documents/publicaciones-economicas/informe-de-la-economia-dominicana/documents/infeco2022-12.pdf
- (10) ProDominicana, 2023. Report on foreign direct investment performance in the Dominican Republic year 2022. https://datamarket.prodominicana.gob.do/Documentos/2022%20-%20Comportamiento%20de%20la%20Inversi%C3%B3n%20Extranjera%20Directa%20en%20Rep.%20Dom..pdf
- (11) World Bank, 2021. Dominican Republic Leveraging Competition in the Telecom Sector to Accelerate Economic Growth. https://documents1.worldbank.org/curated/en/203161623989071011/pdf/Dominican-Republic-Leveraging-Competition-in-the-Telecom-Sector-to-Accelerate-Economic-Growth.pdf
- (12) BID, 2021. Broadband Development Index Annual Report: IDBA 2020: Digital Divide in Latin America and the Caribbean. http://dx.doi.org/10.18235/0003337
- (13) Agenda Digital 2030 – Connectivity and Access Pillar. https://agendadigital.gob.do/ejes/conectividad-y-acceso/
- (14) Decree No. 539-20 which orders the preparation of a National Broadband Plan (PNBA). https://presidencia.gob.do/decretos/539-20
- (15) MEPYD, 2020. National Infrastructure Plan 2020-2030 https://mepyd.gob.do/wp-content/uploads/drive/DIGEDES/Publicaciones/Plan%20Nacional%20de%20Infraestructura.pdf
- (16) Rotondi, V., et al, 2020. Gender digital inequality in Latin America and the Caribbean. https://repositorio.iica.int/handle/11324/12489
- (17) INDOTEL, 2022. Annual Telecommunications Performance Report 2021. https://transparencia.indotel.gob.do/wp-content/uploads/2022/12/informe-desempeno-de-las-telecomunicaciones-2021.pdf
- (18) Aprilianto, Y., Asrol, M., & Gunawan, F. E., 2021. Economic Feasibility Analysis in Developing 5G Infrastructure and Locations in Indonesia. https://www.temjournal.com/content/101/TEMJournalFebruary2021_121_132.pdf
- (19) Banda, L., 2022. 5G Business Models for Mobile Network Operators—A Survey. https://ieeexplore.ieee.org/abstract/document/9881490
- (20) Cambridge Econometrics, 2021. Realizing the Benefits of 5G. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1147979/realising_the_benefits_of_5G.pdf
- (21) Mckinsey & Company, 2020. The 5G era: new horizons for advance electronics and industrial companies. https://www.mckinsey.com/~/media/mckinsey/industries/advanced%20electronics/our%20insights/the%205g%20era%20new%20horizons%20for%20advanced%20electronics%20and%20industrial%20companies/the-5g-era-new-horizons-for-advanced-electronics-and-industrial-companies.pdf
- (22) INDOTEL, 2023. Concession to Provide Public Telecommunication Services. https://indotel.gob.do/todos-los-servicios/concesion-para-prestar-servicios-publicos-de-telecomunicaciones/
- (23) Parra, R. Altice launches its 5G network in two cities in the Dominican Republic. https://dplnews.com/altice-lanza-su-red-5g-en-dos-ciudades-de-republica-dominicana/
- (24) The European Commission, 2021. Accelerating the 5G transition in Europe: How to boost investments in transformative 5G solutions. https://www.eib.org/attachments/thematic/accelerating_the_5g_transition_in_europe_en.pdf
- (25) Intec, 2022. Dominican Republic third Latin American country to implement 5G technology. https://www.intec.edu.do/en/notas-de-prensa/item/republica-dominicana-tercer-pais-latinoamericano-en-implementar-tecnologia-5g
- (26) Castells, P., et al, 2023. 5G in Latin America Unleashing the potential. https://www.gsma.com/latinamerica/wp-content/uploads/2023/07/290623-5G-in-Latam-ENG-1.pdf
- (26) Speedtest, 2023. Ookla 5G Map. https://www.speedtest.net/ookla-5g-map
- (27) ONE, 2022. General Report ENHOGAR 2021. https://www.one.gob.do/publicaciones/2022/informe-general-enhogar-2021/?altTemplate=publicacionOnline
- (28) Comisión ODS. http://ods.gob.do/Indicador/Index/121?fromMenu=True
- (29) National Multiannual Public Sector Plan 2021–2024. https://mepyd.gob.do/publicaciones/plan-nacional-plurianual-del-sector-publico-2021-2024
- (30) World Bank, 2022. Rural Population (% of total population) – Dominican Republic. https://datos.bancomundial.org/indicator/SP.RUR.TOTL.ZS?locations=DO
- (31) Nevers, D. 2023. 5G Implementation in the Dominican Republic. https://www.linkedin.com/pulse/5g-implementation-dominican-republic-dean-nevers
- (32) Nis Cooperation Group, 2019. EU Coordinated risk assessment of the cybersecurity of 5G networks. https://digital-strategy.ec.europa.eu/en/news/eu-wide-coordinated-risk-assessment-5g-networks-security
- (33) Bnamericas, 2023. Latin America will have 330 million 5G subscriptions by 2028. https://www.bnamericas.com/en/news/latin-america-will-have-330-million-5g-subscriptions-by-2028#:~:text=There%20are%20currently%20around%207,59%20million%20added%20during%202022.
- (34) National Frequency Allocation Plan. https://transparencia.indotel.gob.do/wp-content/uploads/2022/10/pnaf.pdf
- (35) Law 47-20 on Public-Private Partnerships. https://dgapp.gob.do/wp-content/uploads/2020/09/LEY-47-20.pdf
- (36) Law No. 344-43 on Expropriations. https://drlawyer.com/espanol/leyes/ley-344-de-1943-que-establece-un-procedimiento-especial-para-las-expropiaciones-intentadas-por-el-estado-el-distrito-de-santo-domingo-o-las-comunes/
- (37) Law No. 153-98 – General telecommunications. https://transparencia.indotel.gob.do/wp-content/uploads/2022/10/ley-no-153-98-ingles-1.pdf
- (38) Decree 629-07 creating the dominican electric transmission company. https://eted.gov.do/index.php/marco-legal/file/87-decreto-629-07-que-crea-la-empresa-de-trasmision-electrica-dominicana-de-fecha-19-de-noviembre-2007.html
- (39) Law No. 16-95 on Foreign Investment. https://prodominicana.gob.do/wp/wp-content/themes/ceird/ceirdpdf/Ley-16-95-sobre-Inversion-Extranjera.pdf