Better ICT infrastructure promotes digital transformation in Latin America

Telecommunications public organizations and private entities from all Latin America met from August 18 to 21 in the Telecommunications Regional Conference CRT 2014 to debate about the development needs of the sector in the region, and its boost to economic growth. 

CAF, Development Bank of Latin America, held a seminar which highlighted how telecommunications take the necessary knowledge to improve life conditions to the most remote regions, and recommended  the creation of a new comprehenisve framework for the development of information and telecommunications technologies (ICT) based on connectivity, strengthening of the legal frameworks in the different countries, advance of the digital economy, strengthening of the skills of the population, and innovation, among others.    

Juan Antonio Sosa, CAF's Corporate Vice-President of Infrastructure, pointed out that "the imbalances in the penetration of ICT services leave an important space to continue increasing investments and the volume of resources allocated to broadband and the sector in general". 

Sosa highlighted the need of greater investments to maintain a sustained growth that helps achieve the development levels of other regions around the world. He explained that even though broadband is expanding quickly in Latin America and the Caribbean, there is still a deficit in infrastructure that limits access to these services to low income families. 

During the 2006-2012 period, the telecommunications sector in Latin America invested approximately USD 159.57 bllion, with a compound annual growth of 9 percent. With their actions, Brazil and Mexico are two of the countries which have achieved advances in the most representative cities.

Latin America, including the Caribbean region, is located at a medium level in terms of Internet use. Toward the end of 2012, there were 256 million Internet users, which is equivalent to a 44.7% penetration. The number has been increasing at a fast pace in the past decade, according to the study "Expansión de infraestructura regional para la interconexión de tráfico de internet en Latinoamérica" (Expansion of regional infrastructure for the interconnection of Internet traffic in Latin America), published by CAF.

The study points out that Internet has become a tool for economic and social development. As a consequence, Internet traffic has grown and it is expected that it will continue growing at high rates in coming years (42 percent annually), and is being accommodated by the national and international transportation networks. However, research reveals that it is not enough to expand the transportation networks, as it is also necessary to have a framework as traffic interconnection infrastructure that can make the use of the networks more efficient, thus reducing traffic costs and increasing the exchange of regional traffic. 

Currently, the region incurs in costs of USD 2 billion for international traffic, which could be reduced by 33 percent with a better expansion of Internet Exchange points (IXP). Finally, the efficiency and growth possibilities of Internet depend on the amount of interconnections it has: more interconnections lead to lower costs, better quality, and greater availability to transport information. 

In addition, Sosa indicated that the Institution promotes the generation of knowledge, financing and investment operations, and coverage of broadband to improve the education, health, government, and competitiveness indicators in the region.  

CAF promotes an agenda aimed at developing investments in the ICT sector with the purpose of supporting digital inclusion, expanding access and use of broadband, and developing high speed communications networks.