Nicaragua has the Panama Canal. But a second canal, which a Chinese billionaire in 2013 said he planned to build there, is nowhere to be found. And when it comes to communications infrastructure, the country’s situation is abysmal.
A new report from MarketResearchReports.biz says “Nicaragua continues to exhibit one the lowest fixed line penetration rates in the region, substantially below the Latin American average.” Broadband penetration there was 4.4 percent at the end of 2016 – vs. 12.4 percent for Latin America. That’s due in large part to the lack of fixed telecom infrastructure investment over the years, according to the research group.
“The Nicaraguan telecom sector has experienced very few advances in terms of regulation over the past decade,” adds MarketResearchReports.biz. “And this is currently limiting growth opportunities in the market. The country needs to implement a new regulatory framework that replaces the outdated telecom law from 1995 and reflects the changes that the market has undergone in the past 20 years. This will help promote competition and investment in new infrastructure, which can help lift penetration levels.”
That said, and as MarketResearchReports.biz notes in its study, things could improve on this front due to new national broadband initiatives.
A year ago this month Nicaragua and the World Bank agreed to collaborate to increase broadband access and develop information and communications technologies in the country. The $20.1 million effort is to be funded by the World Bank’s International Development Association, via The Caribbean Regional Communications Infrastructure Program.
The public-private effort aims to use that money to bring broadband to 48 locations, including businesses, health care centers, and schools and universities. If that happens, it will serve nearly 180,000 people. And it will provide them not only with broadband for business and personal use, but will also aid in disaster prevention efforts. That’s important because, as The World Bank notes, Nicaragua is highly vulnerable to natural disasters.
As for right now, as BuddComm in a June 2017 report says, “Nicaragua’s telecoms market has mirrored the [country’s] poor economic achievements, with fixed-line teledensity and mobile penetration also the lowest in Central America. The broadband market remains nascent, with population penetration at about 2 percent in early 2017. Most internet users are concentrated in the largest cities because the rural and marginal areas lack access to the most basic telecom infrastructure. A number of internet cafés provide public access to internet and email services, but these are also restricted to the larger population centres.”
América Móvil’s Claro (News - Alert), BuddComm says, is Nicaragua’s leading communications service provider in terms of broadband, fixed line, mobile, and pay TV services. Telefónica’s Movistar, meanwhile, is Claro’s sole competition in the fixed line and mobile markets. Others in the Nicaraguan communications market include IWB Holding, Rostejnologuii (a Russian state corporation), newcomer Xinwei Nicaragua (which markets its services under CooTel), and Yota Mobile.
Speaking of Xinwei, that’s Wang Jing’s company. He’s the Chinese billionaire who in 2013 got the Nicaraguan government to agree to let him build a $50 billion canal. Plans for the new canal describe a project three times the size of the Panama Canal.
Interestingly, several shipping experts said there’s no need for a second canal. So there has been speculation over the true motives of this effort.
Foreign Policy reported that the new canal, if built, would be “deep enough to allow Chinese submarines to secretly cross over to the Atlantic Ocrean from the Pacific.” And others reported that Wang Jing’s effort was about more than just a giant canal. It was – and perhaps still is – part of a larger plan by the Chinese billionaire to build a center of free trade zones, ports, and roads. That, various sources have noted, would enable him and other Chinese companies to take advantage of cheaper production and access to South America, Mexico, and the U.S.
Wang Jing broke ground for the giant canal project in 2015, according to The New York Times. But, as the Times last year reported, Nicaragua’s President Daniel Ortega hasn’t mentioned the canal publicly for months, and “there are no visible signs of progress.” In fact, the publication said, cows are grazing in the field in which the billionaire kicked off the project.
Apparently, there hasn’t been much, if any, forward momentum on the new canal since then. The Miami Herald last month published a story with the headline “Four years later, Nicaragua’s $40 billion interoceanic canal remains a pipe dream.”
This piece tells the story of how in June of 2013 Nicaragua’s congress, at the suggestion of Ortega, approved a special law “basically turning over the country’s national sovereignty for 50 years…to a then mysterious Chinese businessman named Wang Jing.” That law was passed without debate in a matter of days, it said. The story also noted that in late 2015 Wang lost a lot of his fortune when Xinwei took a beating in China’s stock market, which could help account for the delay on this project.
“This whole story looks like a script for a comic movie, but it’s a sad reflection of a poverty-stricken country that is run like a family fiefdom by Ortega and his wife,” wrote Andres Oppenheimer in the July 5, 2017, Miami Herald article. “As Chamorro told me, the bottom line is that there is no canal, and growing fears of a massive corruption scheme.”
“There are fears that Wang could now use his 50-year concession to sell the rights to ports, airports and tourism complexes, with zero benefit for the Nicaraguan people,” Oppenheimer continued. “It would be a textbook case of how authoritarian regimes often become the most incompetent, and the most corrupt.”