The Challenges and Transformative Potential of DePIN in LATAM Telecom

The following is a guest post from Sofia Bobrik, CEO and Co-founder at TechWaves PR.

Latin America faces significant challenges in its telecom market, including indebted operators, decreasing revenues, unaffordable tariffs, and low service quality. The region’s telecom industry needs substantial transformation for financial sustainability.

Decentralized Physical Infrastructure Networks (DePINs) offer a solution to these challenges, enabling scalable, reliable, and affordable telecom services across LATAM.

A Struggling Telecom Market

Despite internet penetration climbing from 46% in 2013 to 81% in 2023, LATAM’s telecom industry lacks competitiveness compared to regions like Europe and North America. Coverage gaps affect 7% of the population, particularly in remote locations, while 28% of people do not use existing services despite having access.

In Argentina, 4% of the population faces coverage gaps, and 23% suffers from usage gaps. In Brazil, 66% have mobile broadband, with 12% and 23% experiencing connectivity and usage challenges, respectively.

These gaps stem from the lack of affordable telecom services, driven by infrastructural issues, high capital expenditures, and heavy taxation. In Argentina, up to 44.5% of broadband costs are due to taxes, and prices often exceed the UN’s recommended 2% of household income.

DePIN’s Transformative Effects for LATAM Telecom

DePIN utilizes blockchain technology to decentralize telecom infrastructure, with the sector’s market projected to grow from $2.2 trillion to $3.5 trillion by 2028.

This approach allows individuals and small businesses to operate hotspots and routers, receiving payments in native tokens for their contributions, thus creating a decentralized infrastructure.

DePIN can help debt-laden telecom providers as it requires no additional operational or capital expenses to offload network traffic. Collaboration rather than competition can help telcos enhance coverage while cutting costs. This structure allows DePINs to address coverage and usage gaps effectively, bringing more people online in underserved regions.

By combining established infrastructures with decentralized systems, DePINs can improve service quality while reducing outage frequency. Its resilient nature also mitigates risks commonly associated with conventional telecom systems.

A real-world example is OpenRoaming, which enables seamless Wi-Fi via decentralized identity management; Uplink enhances this by offering decentralized connectivity solutions to underserved areas, helping telecoms minimize expenses.

The Challenges and Future of Latin American DePIN Adoption

Different regulatory policies across LATAM complicate operations for telcos and DePINs. Collaboration with governments is essential for creating conducive frameworks for growth.

A major hurdle is transitioning telcos from the Web2 to Web3 framework, which requires clear onboarding processes.

DePIN holds significant potential in Latin America, promising to reshape the telecom landscape into a competitive and accessible market with the right incentives and regulations.