HOW COMPETITIVE IS THE LATIN AMERICAN COMMUNICATIONS INDUSTRY?

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1 HOW COMPETITIVE IS THE LATIN AMERICAN COMMUNICATIONS INDUSTRY? Martha Rodríguez Director Center for Strategy and Competitiveness April 14, 2008 TABLE OF CONTENTS

2 TABLE OF CONTENTS Network Readiness Index vs. GDP per capita The percentage of investment ITC technology in GDP Latin American countries is important.

3 Network Readiness Index vs. GDP per capita Latin American However, Chile, India, with Malaysia few exceptions and other countries countries are has below been what exceptional would be expected infrastructure for their level and use of ICT development performance. in terms of preparation for the Information Society E Readiness vs. GDP per capita There is sufficient investment in ICT, but we are below the level that we should be in all ICT indicators, so one possible explanation is that the level of education is under the suitable level

4 PISA (Mathematics) vs. GDP per cápita The majority of countries (including Chile) have a lower level of mathematics education in theirs schools than it would be expected for their level of development PISA (Mathematics) vs. NRI Score

5 Use of ICT Indicators Top 10 Countries Use of ICT Indicators Top 10 Latin American Countries

6 Filipinas Singapur Malasia Use of ICT indicators Exports digital contents 58,75 58,41 73,60 Taiwán Irlanda 34,47 42,97 México 21,34 Brasil Argentina Colombia Venezuela Chile 11,96 8,67 6,50 4,09 3,39 Source: World Bank World Development indicators (2005] Information and communication technology expenditure (% GDP per capita) Source: World Bank World Development indicators

7 Information and communication technology expenditure (% GDP per capita) Source: World Bank World Development indicators Telecommunications Revenue (% GDP) Source: World Bank World Development indicators

8 TABLE OF CONTENTS Prices without taxes Broadband technologies Download spreed Dollars Service Argentina Brasil Chile Colombia Perú Argentina Brasil Chile* ADSL Mínimum speed Maximum speed Cable Modem 256kbps 128kbp s 200kbp s 225kbps 200kb ps Colombia* ** Perú $ 18,9 $ 25,9 $ 33,6 $ 23,7 $ 27,0 5Mbps 10Mbps 4Mbps 2Mbps 2Mbps $ 46,9 $ 202,8 $ 70,6 $ 100,4 $ 1.032,2 Minimum speed 128kbps** 200kbp s 300kbp s 300kbps 128kb ps $ 13,0 $ 27,4 $ 35,9 $ 28,3 $ 36,9 Maximum speed 6Mbps 8Mbps 10Mbp s 350kbps 2Mbps $ 160,7 $ 106,5 $ 63,9 $ 26,5 $ 430,1 Big Mac Price without taxex (one unit) $ 3,1 $ 3,5 $ 3,2 $ 2,5 $ 2,5 Exchange rate (31/08/2007) $ 3,2 $ 2,0 $ 524,5 $ $ 3,2 * Don t include discounts for Triplay services ** Special plans 64kbps *** Lower income Source: IDC

9 Prices without taxes Broadband technologies Download Speed Dollars Service Polonia República Checa Rusia Colombia Polonia República Checa Rusia Colombia, (don t include sales) ADSL Minimum speed kbps $ 31,21 $ 17,64 $ 14,64 $ 23,73 Maximum speed Mbps $ 63,04 $ 53,00 $ 38,99 $ 100,38 Cable Modem Minimum speed kbps $ 23,47 $ 21,00 $ 16,00 $ 28,29 Maximum speed kbps $ 78,86 $ 74,17 $ 80,00 $ 26,46 Big Mac Price without taxes (one unit) $ 2,51 $ 2,51 $ 2,03 $ 2,53 Source: IDC Use of ICT indicators % households with Bolivia Brasil Costa Rica Ecuador El Salvador México Panamá Perú Uruguay Venezuela Electricity 68,3% 97,1% 99,1% 95,6% ND 88,1% 77,0% Radio 67,1% 88,0% 86,3% 72,8% 88,3% 80,4% 83,7% 94,4% 82,8% Television 63,2% 91,3% 92,8% 87,1% 93,2% 82,7% 69,0% 90,7% 91,5% Fixed telephone line 18,8% 48,1% 65,6% 35,5% 40,6% 48,3% 40,1% 27,9% 69,9% 34,5% Movil Cellular Phone 39,2% 59,2% 49,8% 63,8% 34,8% 47,0% 64,2% 28,1% 48,9% 25,7% Computers 12,1% 18,5% 27,0% 17,9% 7,4% 20,5% 15,6% 10,1% 24,3% 10,3% Internet Access 3,5% 13,6% 10,2% 2,5% 2,2% 10,1% 8,1% 4,7% 13,7% 2,5% Access Internet, by access type Banda estrecha 79,7% 58,8% Broadbrand 20,1% 41,2% Source: OSILAC

10 TABLE OF CONTENTS Conclusions These results suggest that Latin America needs more systematic ICT policies covering all aspects related to the environment in order to improve their preparation for the knowledge society. If countries don t implement these policies they risk lagging behind and the so-called digital divide will increase. In the case of Colombia, the effort must be even greater than in Chile, which has already high position at the international level. Countries that have the greatest preparation for the knowledge society tend to see this effort reflected in lower rates and better quality of communications services. Prices in Latin American countries of telecommunications services differ widely between countries. Peru and Brazil have high rates in broadband Internet. Also compared to other emerging countries this service is costly in the region and its quality is lower in terms of bandwidth

11 Conclusions In terms of the penetration of telecommunications services, there are still countries with strong deficiencies in almost all services such as Bolivia, while others have moved to levels of developed countries. The telecommunications service is most widespread is the television and radio, followed by the mobile and fixed phone. Internet penetration remains low by international standards. All of this reinforces the hypothesis of the need to conduct more systematic ICT policies to better prepare the region for the digital age