Latin America and the Caribbean have some catching up to do in the provision of broadband internet services, according to a score sheet compiled by the Inter-American Development Bank.
Broadband penetration is expected to grow quickly, at a compound annual growth rate of 11.9 per cent in the five years to 2015 across the region, but for now it compares poorly to OECD countries.
The IDB’s ranking based on four criteria – public policy, strategic regulation, infrastructure and applications and knowledge – gave the region’s 26 countries an average 4.37 out of a maximum 8 points, calculated from 37 separate indicators compiled by researchers. By comparison, OECD countries scored an average 6.14.
Chile came top of the class with a score of 5.57, followed by Barbados at 5.47 and Brazil with 5.32. All three can find some reason for cheer after ranking higher than European emerging markets such as Slovakia (5.13) and Poland (4.99).
But dragging down the average were countries whose entry into the digital age has been frustratingly slow. Poverty-ridden Haiti had the lowest mark (1.71), followed by Belize (3.11) and Surinam (3.12), while Bolivia (3.16 overall) did particularly poorly on its infrastructure (a score of just 1.92).
Overall, broadband penetration in Latin America was 8.4 per cent at the end of 2012, according to a report by telecoms research group BuddeCom last year, slightly below the global average of 9.2 per cent.
This isn’t just an irritation for Netflix subscribers or the region’s hordes of social network users. A dearth of reliable and speedy internet connections risks putting economies at a competitive disadvantage. A recent survey by the IDB suggested that a 10 per cent increase in penetration carries with it a 3.2 per cent rise in gross domestic product, and a 2.6 per cent lift in productivity.
For now, a huge hurdle is affordability: broadband in Latin America and the Caribbean is nearly eight times more expensive than the average in OECD countries, though less dear than in the US and Canada. It also tends to be much slower. Forty-three per cent of the Latin American population living in areas served by fixed broadband do not acquire the service, according to a study last year by mobile operator body GSMA, boosting the thesis that roll-out is most likely to come through mobile offerings and dongles. More than half the region’s inhabitants – around 330m – now own mobile phones, underscoring the potential for growth in this area of the retail telecoms sector.
Several countries have measures afoot to tackle the broadband gap. A national plan in Peru aims to boost penetration from 4 per cent in 2011 to 9 per cent by 2016; and Uruguay’s Antel is rolling out a network to take super-fast fibre direct to 720,000 households. Most ambitious of all, the Union of South American Nations has conceived an idea for a 10,000 km-long fibre optic broadband ring running through its member states as a way of reducing costs and increasing the velocity of data flows – though this is likely to be a few years off.
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