Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
The planning, authorization and subsequent implementation of broadband connectivity plans in Latin America will become increasingly important in upcoming years. Regional governments understand that the initial phase of telecom services diffusion has been accomplished: most citizens now have access to at least one telecom provider (usually a mobile operator) for telephony services. The new challenge is to provide high speed—beyond the 256 Kbps recommended by the Economic Commission for Latin America and the Caribbean (ECLAC)—to the population, particularly for those rural localities without at least one telecom provider offering services.
The financial investment required to accomplish this goal is enormous, especially in a region as heterogeneous in technology adoption and geographic landscape as Latin America. Conscious of the numerous obstacles faced by regulatory authorities, Signals Telecom Group decided to conduct a comprehensive comparative analysis of connectivity initiatives implemented in 19 Latin American markets.
Some of the key findings of this research show that the average Latin American investment for connectivity plans that last four years is $88 per capita. There are also some surprising facts in terms of what is included in the broadband connectivity plans already in place; for example, less than 40% of these initiatives include the promotion of local digital content development and completely ignore the importance of enabling remote services such as tele-health and tele-education.
To facilitate a better understanding of some of the challenges that need to be addressed to stimulate greater broadband growth and promote the adoption of information and communication technology, Signals Telecom Group presents some of the conclusions of its research on Latin American national connectivity plans:
- Lack of broadband definition: With very few exceptions, Latin American governments have not established an official definition of what should be considered a broadband connection. This is not a minor issue if one takes into account the role of mobile wireless technologies in the region’s telecom development. It is noteworthy that many regulators consider the ECLAC definition to be correct, even though it defines anything with 256 kilobits per second of download speed as a broadband connection. Apart from creating confusion, when accounting for mobile broadband technologies (EDGE can theoretically offer download speeds of 384 kbps), 256 kbps is not enough to support advanced applications that enable the dissemination of services like tele-medicine, tele-education and tele-work, contradicting the initial objectives of any broadband connectivity plan.
- Most regional connectivity plans focus on two main elements: infrastructure deployment and increasing the number of devices that enable people to access the Internet. Little emphasis is given to the provision and development of local content and applications. This is an issue of extreme importance in markets with numerous indigenous languages. The exclusion of these languages from the Internet increases the danger of their extinction.
- To reduce costs, it is necessary to build Internet exchange points (IXPs) for nationwide traffic and promote the use of local servers to host content. This will cheapen the cost of providing service by reducing interconnection costs with foreign networks since in many cases, local content is hosted on servers located in Europe and the United States.
- Not all governments are accompanying their efforts to promote connectivity with initiatives to stimulate demand. Some of the measures that encourage the adoption of broadband services include eliminating taxes for broadband service in households with low purchasing power and/or eliminating the tax on devices that can connect to the Internet.
- There is a lack of reliable statistical information to quantify the progress made by government broadband plans. In some cases, this problem is exacerbated by the lack of a specific schedule defining compliance dates of the various targets contained in the connectivity plan.
- Many broadband initiatives have yet to define the specific role played by the private sector to promote ICT. For example, governments do not specify the goal of a public-private partnership or how it is expected to work to accelerate the expansion of broadband coverage.
- Some governments are not modifying their regulations to adopt measures that will promote investment in broadband technologies. For example, several countries have yet to approve measures such as single license or new processes for granting radio spectrum concessions. In other cases, they grant telecom licenses without imposing minimum coverage and/or investment requirements from the carriers. In other words, these are missed opportunities to impose requirements that help overcome the deficiency that exists in rural areas, social meeting areas and buildings such as hospitals, schools and public buildings.
- Not all broadband connectivity plans include the provision of computers or other devices for public school students, and the governments implementing this measure do not seem to understand that the delivery of a device is just the first step that needs to be taken to allow low income individuals to benefit from ICT. There’s a need for greater awareness of the importance of training teachers in the use of ICT in schools as well as in establishing tele-centers in rural communities. Governments also need to understand that many of the items must be regularly replaced and machine software updated.
All the studies from this series will be released through the Signals Telecom News portal over the coming months.
Jose F. Otero is president of Signals Telecom Group. His Twitter is Jose_F_Otero and he can be contactedatinfo@signalstelecom.com.
