March 23, 2001

The digital divide is widening in Latin America in terms of access to both basic telephone services as well as to the more sophisticated services such as those provided over the worldwide Internet, according to Dataquest Inc.

There are a number of indicators that show just how extensive this digital divide is in Latin America. Table 1 (CLICK on More Images) demonstrates that both the teledensity and the broadband connections for the major countries in the region trail the United States by a large margin. In the United States, 80 people out of a hundred have phone connections, while Chile, which leads Latin America, has only 25 people out of 100 with phone connections. Consumer broadband connections are only beginning to be added and not in every country. This gap is widening over time.

Gartner Dataquest defines the digital divide as the gap between technologically advanced cultures and those that have been left behind. It encompasses the degree of teledensity, the state of networks and the access to technology by the lowest socioeconomic levels of society within a given country or intraregionally.

"Governments within Latin America need to put in place incentives for carriers to serve unserved and underserved areas as well as to upgrade existing networks. It is time to decouple regulatory services from local dial tone," said Ron Cowles, principal analyst for Gartner Dataquest's worldwide Telecommunications and Networking group. "We feel the appropriate measure is to frame the future as a competitive expanding information service economy, and then define public policy constructs to get there.

"It must be based on innovative new network constructs that are encouraged at local, city, county, state and national levels, and are surrounded by an economic framework that motivates the service providers to seize the opportunities inherent in this model. Incentives can and should be used to put in place new and more powerful networks, not only in areas attractive to competitors but also in underserved areas."

"The lack of broadband connectivity has created a sort of chicken or egg situation," said Marta Kindya, senior industry analyst for Gartner Dataquest's worldwide Telecommunications and Networking group. "Because there is a lack of advanced network infrastructure in most areas of Latin America, there is a lack of e-commerce - particularly for residence consumers. Brazil led all countries in the region with 53,000 consumers with broadband access in 2000. In comparison, the United States had a broadband consumer base of more than 6 million in 2000."

Latin America needs to move toward the "infocosm," a term we use to define the connected world of people, and an increasing array of services and devices for individuals and businesses, large and small. It describes a surging new economy based partly on the merging of IT and telecommunications.

"A well-founded universal service policy must be expanded to include not only public telephones, but also Internet access via public infocosm centers where there is access to a computer somewhere within the reach of consumers. The latter could be construed as universal Internet access for everyone," said David Rendall, group vice president for Gartner Consulting. "A well-founded universal service policy cannot discriminate among suppliers and technologies, and must be allowed to evolve. This concept must include broadband connectivity, which is fundamentally necessary to enable e-commerce."

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