Mobile network ecosystem

Due to the decrease in GDP, the extended poverty in Venezuela and the millions of people leaving the country, the number of mobile lines fell by 11.2 percent in 2017, continuing the decreasing tendency started in 2014, whereas fixed-line subscribers dropped by 22 percent (BuddeComm, 2018). These figures have continued dropping, and by 2019 only 60.57% of population used mobile lines and there existed only 17.07 lines of fixed telephone for every 100 inhabitants (Conatel, 2019).

Long Term Evolution (LTE) was developed in Venezuela only in 2017 after long delays due the impossibility to purchase equipment from foreign suppliers and the poor condition of infrastructures. The state-owned company CANTV and its filial Movilnet, have spread this technology and fibre cabling, increasing the number of people for whom these services are available (BuddeComm, 2017). However, the lack of resources both of companies and users has made these efforts insufficient, and most Venezuelans report problems in their connectivity, while others cannot afford spending money in telecommunications or mobile devices. According to the figures of Conatel, in the second quarter of 2019 this service was available for 18.47 percent of mobile phone users, but IPYS stated that only 8 of the 23 states (34.7 percent) in Venezuela can access 4G services. As an average, the speed of Internet connection in the country is 1.8 Mbps (IPYS, 2019), the second slowest of the Latin-American and Caribbean region after Paraguay. This helps explaining why cybercafés, even though they do not hold a dominant position as they did in the past, are still used by 14 percent of Venezuelans to access Internet (Tendencias Digitales, 2018).

This is partly explained because the infrastructure is old and underdeveloped. One reason for that is the lack of investments of the companies, with much more urgent debts and in a very weak position after years of decreasing their revenue. Another reason is the impossibility to access international supplies, services and currencies, what makes international investments and contracts harder. The lack of international currency affects also international phone calls and the access to international TV channels (Lucas, 2016).

Despite the rising interest in these services, Urribarrí and Díaz (2018) expect penetration rate of mobile connectivity to be around 51 percent in 2020. The prices of telecommunication services, that Conatel had forbidden to rise until November 2016, have been going up since, including the ones of the state-owned CANTV, who rose almost a 400 percent their prices in November 2017 (El Nacional, 2017) and over 15,000 percent in August 2018, according to Últimas Noticias: this has made it difficult for many people to pay for these services, but it has not helped telecom companies, mainly private ones, to cope with revenue shrinkages. Something similar happens with mobile devices, whose price are hard to estimate in the Venezuelan scenario of hyperinflation, but they are, like many other technological devices, very hard to afford for most of the population. The main problem with these prices is the comparison with the wages in Venezuela; for example, a standard connection in a house could be around one third of the minimum wage and many people cannot afford it. However, these prices are extremely low in comparison with other countries, and according to the real exchange that price translated into US dollars would be minimum.

The investment of the state in this field, via its own companies, has helped spreading Internet and mobile communication through the country, making it available for most people. All this makes telecommunications more or less equally distributed along Venezuelan geography. There are, however, differences, as some rural areas still show the slowest Internet speeds of the country and mountains zones have very limited access to telecommunications. LTE services are available almost exclusively in cities.