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  HOME | Latin America (Click here for more)

Beatrice Rangel: Will Latin America Miss the Broadband Development Target?

By Beatrice E. Rangel

The Broadband Commission, an initiative spearheaded by the International Telecommunications Union (ITU), on September 22nd called upon the UN General Assembly to “urge all delegates to the ITU Plenipotentiary Conference 2014 to show their support for the global roll-out of broadband infrastructure and broadband-enabled applications and services to grow the digital economy and empower societies across the globe." According to the Commission, this is essential to correct growth induced inequalities; to match job creation with the market entrants endowment of skill and knowledge sets and to promote entrepreneurship.

"Digital inclusion is of paramount importance to ensure that no one, and no society, is left behind,” says the Commission.

As the commodities boom sobers up and economic growth slows down in the region, one would think leaders would be giving serious thought to digital inclusion as a means to integrate Latin America into the ever growing digital economy. Indications of the profound impact of broadband penetration upon growth and development abound. Research studies conducted by the United Nations Development Program; the Economic Commission for Latin America and the Caribbean, the IDB and the World Bank reach the same conclusion: broadband penetration promotes development. Other infrastructure investments promote growth.

And as the world progresses, Latin America seems to be in an excellent position to implement a broadband-based development strategy given that its geographical proximity and vibrant trading links with the US have fostered investments in broadband infrastructure that are above average when compared to parts of Asia and Africa.
A broadband based development strategy however can only become a reality when countries and even more so CITIZENS within countries engage in the 8th development goal -- building partnerships for development.

Digital Inclusion, contrary to universal primary education, needs not deal with difficult teachers unions that care more about paychecks and leadership power than the quality of education. Contrary to reducing child mortality -- which demands the existence of health care programs that start at pregnancy and access to appropriate food and family protection -- digital inclusion only demands coordination among public policy makers, ITC providers and schools and families.

The state only needs to create a framework of incentives for service providers to tackle the dilemma of creating economically sound and low cost services that allow low income families to connect. The service providers for their part need to continue to develop innovations that reduce costs and enhance access to sparsely populated regions and low income families.

Spain's Telefonica in the 1990s led telecommunications development in Latin America through the establishment of prepaid services. And because prepaid services have lower average revenue per user (ARPU), Telefonica had to become more efficient and effective in its businesses. As a result the carrier became the reigning player in the region as telecommunications skyrocketed in Latin America.

Finally, parents and public school leaders need to do a much much better job in terms of fostering the development of digital skills among children and teenagers.

The first step in the direction of creating a broadband promoting development platform has to be taken by policy makers who need to spearhead the passage of convergent regulations that place broadband development at the core of all Public services. According to the ITU, the greatest inroads in this long term and invisible task have surprisingly been made in the Americas.

And while the US presence in the hemisphere puts pressure in favor of regional achievement, individual countries like Brazil, Chile. Colombia, Costa Rica, Uruguay and Peru are making truly impressive inroads into the creation of convergent regulations. Most recently Mexico has enacted a Telecom reform which greatly fosters broadband penetration.
This progress can be partially attributable to brisk trade exchanges with the US but also to innovation. Brightstar, a Florida-based company created by an enlightened entrepreneur from Bolivia, was almost single-handedly responsible for creating access to mobile communications to what Wall street would dub as “sub-prime Latin Americans.” By means of transforming what essentially was digital trash -- used mobile phones -- into usable phones, Brightstar reduced the price of phones by about 60%. At that price level many Latin Americans could buy a mobile phone. And as consumers move up the mobile phone food-chain, Sky, a brand developed by a Venezuelan entrepreneur, is now manufacturing and distributing powerful smartphones targetted specifically at the Latin market in the $40-$75 dollar range to further this trend.

Should the march towards convergent regulations coupled with the availability of low cost devices smartphones and tablets, Latin America could see economic strutures give way to integrated economic systems where value-creating activities develop from digital tasks. This could mark the start of a development stage where the Latin American countries master the art of riding the wave of history instead of lagging behind it.

Also by Beatrice Rangel in her Latin America from 35,000 Feet series

Beatrice Rangel: Kissinger’s World Order and Latin America

Beatrice Rangel: The Third Attempt -- Will Modernity Prevail in Latin America?

Rangel: While US is Away, Latin America Rethinks Development Paths

Rangel: In the Midst of Riots, a Star is Born in Brazil

Rangel: In Mexico Cinderella Gets to the Ball while Colombia Gets a Chance at Peace

Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.

For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.

You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.

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