CAF underlines growth, but sees disparities in ICT expansion in Latin America

Friday, November 18, 2011

ICT technologies have spread significantly in Latin America over the past decades, especially concerning mobile telephony, but major gaps between the region and developed countries in terms of broadband can hurt investments, according to a study released by Latin American development bank CAF.

The study, "La infraestructura: clave para aprovechar las oportunidades de desarrollo" (Infrastructure: Key to taking advantage of development opportunities), which reviews the region's challenges in terms of infrastructure, reinforces that Latin American countries' existing gaps pose an obstacle to the development.

According to the study, national and provincial capitals and major urban centers in Latin America show a high level of telecoms network development, while small towns and rural areas are still lacking in coverage.

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Regarding broadband penetration, the study adds the high cost to adopt the technology is a major barrier.

With 99% of mobile phone penetration only 20 years after the arrival of the technology to the region, the survey underlines that Latin America is at a level similar to that of more developed regions.

The case is not the same on the fixed telephony side, though. Penetration increased to 18.4% of the population in 2010, compared to 6.3% in 1990. The study also found that the level of investment in fixed telephony reached US$224mn between 1990 and 2007.

"This process was based on public policies focused on the privatization of fixed-line operators, in promoting the development of mobile telephony, and enhancing competitive structures to provide these services," according to CAF.

The multilateral bank also noted that PC penetration is approaching 17% of the population, and that internet is now available to 36% of the population, putting the region in an intermediate stage of internet development and personal computer use.

Meanwhile, the study found that broadband development in Latin America is still lagging, reaching only 6.8% of the population, compared to 24-30% in developed countries.

According to CAF, faster adoption rates in developed countries will likely hurt the competitiveness of Latin American economies.


In a similar light, preliminary results of Brazil's 2010 census - just released by the country's statistics and geography institute IBGE - show how the country has grown in ICT while also highlighting the disparities among its regions.

The survey revealed that Brazil's northern region had the highest percentage of growth in internet access, up 16.5% in comparison with 2009.

However, the current internet penetration rate in the northern region, of 15.4%, is still very low compared to the southeast (30.7%, up 12.1% from 2009), south (35.5%, up 8.4%) and center-west (31.4%, up 11.3%). Countrywide average internet penetration was at 30.7%.

The census also revealed that the percentage of households with a computer in Brazil grew from 34.7% in 2009 to 38.3% in 2010, and that the rate of homes with a fixed or mobile telephone surged to 87.9%, against 84.3% in 2009.

When considering mobile phones alone, 83.2% of households in Brazil have at least one.