Is closing the digital divide by 2020 any closer to becoming a reality?

Last week, the 2nd Regional Telecommunications Congress (CRT) took place in Panama, giving government officials, private sector representatives, academics and others an opportunity to discuss strategies and policies to help reach the goal of closing the digital divide by 2020.

During last year's event, congress organizers – the Ibero-American association of research centers and telecommunication enterprises (Ahciet) – claimed that investment of US$44.4bn a year, or US$356bn in total, would need to be made in mobile and fixed networks to reach that goal.

The total has since risen to US$400bn. Following last year's congress BNamericas spoke to Ahciet secretary general Pablo Bello about the challenges ahead. Now, BNamericas speaks to Bello again about what has changed over the last year, the most important topics of discussion during the four days and whether he thinks closure of the gap is any closer to becoming a reality.

BNamericas: What is your overall evaluation of the second version of this event? Do you think we are anywhere closer to closing the digital divide?

Bello: The event was very well attended by a wide variety of government authorities, regulators, private sector representatives and academics who discussed how we can progress more quickly in the development of telecommunications. There is a shared vision that requires a lot of effort from all and which requires increasing investment.

The recurring question throughout the week is how can we achieve that. It was looked at from the angle of spectrum and technology. There were forums and discussions on advanced mobile technologies from the ITU and the GSMA and on transport networks from Ericsson and how they could create greater efficiency to reduce costs. We looked at IXPs (internet exchange points) and intra-regional connectivity. All of this was related to the theme of how to close the digital divide and increase investment.

BNamericas: What, for you, were the key takeaways?

Bello: For me, there were three important elements.

First of all, we need to create conditions of respect and trust that we're all rowing in the same direction.

In Latin America, there are many countries that have engaged in dialog against companies and the companies logically have gone on the defensive and blamed the governments. We have to avoid getting into a dichotomy of who is good or bad, of setting our citizens aside and pushing for tougher regulation and sanctions. That creates a climate of distrust and doesn't help us close the digital divide. We have to be able to make governments aware of the importance of creating a positive environment with less aggressive rhetoric where we can do things right.

Secondly Ahciet believes there is a potential contradiction in introducing public policies for the 50% of Latin Americans who have access to the internet and not for the 50% who don't.

If the priority is to close the digital divide we should be careful not to come up with regulations that make it hard to install antennas or that increase taxation or that impose requirements of very high service quality standards. We should also be careful not to introduce net neutrality laws that restrict the flexibility of operators to provide commercial offers that would be more accessible to segments of the population that are unable to pay for more advanced services.

Thirdly, while we all want to aim for service quality standards that are on a par with those of developed nations, we have to remember that the Arpu in Latin America is closer to that in Africa than it is to that in the developed world. If we want to generate US$400bn in investment we need to create conditions that allow the private sector to get a return on their investment and ensure that the cost of rolling out infrastructure is not excessively high.

You can do a lot when monthly Arpu is US$45, like in the US, or US$30, like in Western Europe. But in Latin America it is under US$10 and the rate is falling. So we have to be more creative in how we generate investment and modernize our networks and that is not helped by regulation and taxation that increases costs for investors.

It's not an easy issue to resolve and requires dialog and building a shared agenda between countries.

In that context Ahciet launched during the congress a center of studies that creates a space where we can contribute to the debate with high-level technical and economic studies and analysis that can help governments and regulators draw up public policies and take decisions based on sound data.

BNamericas: Compared to last year, do you think progress has been made in terms of some of the key issues that need to be addressed like spectrum and taxation?

Bello: I'd say that the focus of debate at the congress has become more sophisticated. In Latin America, we've taken both steps forward and steps backward in the last year. We've seen more spectrum auctions announced and more governments moving in the right direction, but at the same time we have cases of governments trying to squeeze the most revenue out of spectrum auctions or sending out messages that don't contribute to a harmonious development of the sector.

BNamericas: At last year's congress, the estimated amount needed to be invested to close the digital divide was US$356bn. Now it is US$400bn. Why the increase?

Bello: We've had a year in which certain investment projects were not realized so that means we have to increase our efforts to reach our goal. The study took into account 11 countries. But we're still talking about the same order of magnitude.