In the dark, Maracaibo was stripped.
Between the blackouts and the energy rationing of 2017 and 2018, Venezuela’s second-largest city was disconnected, piece by piece, by small-time crooks that only cared about the coax’s copper. By the end of 2018, most of the city had little to no internet connection or cable TV. “The dismantling of (the state-owned telecoms company) CANTV was incredible,” explains Alberto Marín, a journalist specialized in telecommunications. “They took [all the coaxial cables] and sold them for pennies.”
And then, the big bad wolf showed up. The month-long blackout of March, 2019, exposed the mobile carriers’ weaknesses, unable to cope with the data demand in Venezuela and, especially, in Zulia, the state with the highest data consumption per inhabitant. “Zulians were upset. Maracuchos needed to connect,” explains Iván Bello, commercial director of telecom company AirTek. Right after the blackout, Maracaibo began its transformation into the internet capital of Venezuela, with connection speeds unheard of in Caracas, and a price war that could make Adam Smith blush.
From wISP to Fiber
Internet providers in Zulia began offering wireless internet (wISP) as a response to the frequent blackouts in the state. Wireless connection means two antennas, with a battery backup, sending data packages over radiofrequency; unlike internet delivered via coaxial cable (HFC), as long as the users can provide electricity to routers and computers (with a UPS, for example), the connection remains stable, even if the electrical grid has no power.
Slowly, wireless internet blossomed in Maracaibo, although it was expensive. Companies like Fulldata and AirTek began to build a strong consumer base, limited due to installation costs (up to $500; the Venezuelan minimum wage is way below that) and technology. AirTek offered a 5 Mbps connection for $27 in 2019, while the same packages were up to $100 in Caracas. These wISPs were a solution, but not the answer.
Right after the blackout, Maracaibo began its transformation into the internet capital of Venezuela, with connection speeds unheard of in Caracas.
In late 2019, two unrelated events happened that would be the key to the transformation of the internet landscape in Maracaibo for 2020. First, Fulldata began exploring fiber optics options and Maracaibo, being a city with no significant geographical accidents inland, was ideal for over-the-air fiber deployment. Second, “three decimated cable companies” (Multivisión, Corporación Matrix, and AirTek Solutions) merged to offer high-speed internet for the whole city in 2020. The fiber wars were about to begin.
This Means (Price) War
Right when the COVID-19 pandemic hit Venezuela, AirTek began its fiber optics deployment in Northern Maracaibo. The lockdown put the wireless network on the brink of collapse, mainly due to Netflix: “In one month, our network used 163 TB of data on Netflix alone,” explains Bello. This only accelerated the fiber optics project. A month later, Fulldata was in full swing in the Eastern part of the city. Both companies had plans to expand to the entire metropolitan area and prices of fiber-to-the-home (FTTH) internet plans were much lower than the wireless. Antennas began to disappear. Everybody wanted in on FTTH.
Suddenly, prices began to drop even further. “It was a price massacre,” says Alberto Villasmil, director at Fulldata. “We wanted the clients. The other companies (AirTek and Maracaibo Net) wanted the clients. We put on our skates and rolled with it.”
Social media platforms were on fire with targeted ads that were, literally, the bomb.
Nowadays, AirTeK offers a 50Mbps plan for $25 a month that can be rolled up to 600Mbps for $69. “Maracuchos liked their movies to play smoothly at high quality. That is what we deliver, that experience,” describes Bello. With more than 20,000 customers, they claim leadership of the local market, with plans to quickly expand to the west of the city and San Francisco del Zulia, in the south.
In January, Fulldata answered the challenge, bulking its basic plan (from 60Mbps to 80Mbps) and lowering the price from $30 to $25. The company also offers an 800Mbps plan for $75 and is focused on a rarity for any market in Venezuela: customer service. “The Venezuelan client, in general, needs attention. They’re willing to pay more if you give them great customer service. We cut our repair time to four to six hours, and our clients are happy,” adds Villasmil.
As Good As It Gets?
“Everybody with fiber is happy,” remarks Marín. “Maracaibo is the genesis of the high-speed internet in Venezuela because we have the companies, the consumer, and an important software development sector who’s still in business.”
Maracaibo is the genesis of the high-speed internet in Venezuela because we have the companies, the consumer, and an important software development sector who’s still in business.
Zulia’s capital has two of the most important computer engineering schools in the country and was considered the Silicon Valley of Venezuela due to the number of software companies with headquarters in its capital. But is this real life?
According to the latest Venezuelan Observatory of Public Services (OVSP) survey, yes, just for an elite.
In the last quarter of 2020, only 7.1% of Maracuchos switched internet service providers, but 80% said they now have a better service. Maracaibo is also the overall survey leader in service quality (41.1%).
There are some struggles. Routers using high-speed connections are last generation, usually expensive and not the ones people have at home. Also, $25 doesn’t sound like a lot for such a good connection, but it can be a lot in a country where the minimum wage stands under $1 a month. Migration kicks in, too: “Migrants pay these bills because they want their families to be connected so that they can see each other on video chats and WhatsApp calls,” explains Marín.
Maracaibo’s internet bubble is so good that it has moved the needle of the broadband connection average for Venezuela in services like Speedtest. In March of 2019, the country was second-to-last in Ookla’s world rankings (3.67 Mbps on average); by December, it was out of the bottom 20 and, for the first time ever into double-digit speeds (11.87 Mbps). “One 800 Mbps connection in Maracaibo can even out 400 CANTV ABA connections to the Ookla’s average,” comments Fran Monroy, longtime Venezuelan telecommunications journalist.
“These are people who decided to take the risk and invest in digital infrastructure,” says Luis Carlos Díaz, president of the Venezuelan chapter of The Internet Society. “And they did it by understanding their local market, to their success. Maracaibo is now a giant lab that tells the rest of the country that this good internet is possible.”
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