Building a digital miracle for all
Despite the enormous strides that Latin America and the Caribbean has made in its digitization process, there are still 280 million people with no internet access, either because lack of coverage or because the costs of the service are unaffordable. In addition to the resulting gaps in access to information and knowledge, 45% of the population has no access to digital connectivity services, such as medical diagnostics, access to education platforms, government and banking services, among others.
In terms of network capacity and quality, challenges remain important. Only 4 out of 10 households have a fixed broadband connection and individual mobile internet access is under 50%. The access gap is also evident in low-income households, rural areas and some urban areas where significant asymmetries in coverage and affordability of digital services persist.
The reason behind this situation is partly the absence of correct incentives to increase investment in telecommunications infrastructure to the levels showed by developed countries. OECD economies, for example, allocate 57% more funds to the expansion of communications networks in per capita terms than the average Latin American and Caribbean country. The absence of modern policies for the digital age and investment mechanisms suitable for network deployment to low-income areas, coupled with limited digital innovation capabilities and public-private coordination problems, may be slowing down the accelerated development of our region’s digital ecosystem and, perhaps the worst outcome, widening social gaps in populations excluded from the digital world.
Therefore, at CAF we have joined forces with Telefónica, Facebook and IDB Invest to create the new company “Internet for All” (IpT) that aims to connect more than 6 million people from more than 30,000 rural locations in Peru. Closing the digital divide is critical to driving Latin America’s economic and social development. Innovative initiatives such as IpT help build a digital miracle, because it will not only increase network coverage and speed, but will also enable digital services in education, healthcare and financial inclusion, which will improve the quality of life of the rural population. Internet para Todos allows us to join forces to reduce the digital divide that deepens the socioeconomic inequality between communities with and without internet. We will start working in rural areas of Peru and our goal is to be able to expand the program in the medium term to all Latin America.
Increasing investment in the sector is a priority, beyond historical trends, to deploy broadband networks capable of delivering services at a faster speed and to achieve near-complete coverage of fourth-generation networks, not to mention challenges involved in the incipient deployment of 5G networks in our region. CAF is a natural partner of governments and the private sector in this effort, as it provides funding resources, technical assistance and knowledge generation that will lead us to this goal.
In this new scenario, CAF’s Digital Agenda has been contributing with different initiatives to the expansion of the digital ecosystem in Latin America and the Caribbean, with actions ranging from the expansion of broadband connectivity, to the modernization of regulatory and institutional schemes to support digital development and productive transformation of the region. In the area of infrastructure, for example, projects have been developed for the deployment and improvement of telecommunications, backbone network and access network infrastructure, international connectivity and efficient network use, connection of the country’s strategic points or the installation of in-country exchange nodes (IXPs), content distribution networks (CDNs) and infrastructure critical to internet development.
The challenges in the new digital agenda for Latin America and the Caribbean are based on the ubiquity of the internet, technological convergence, high-speed networks, the digital economy, digital governance and big data analytics, among others, without neglecting unresolved needs in the access and use of ICTs.
Therefore, CAF has promoted actions aimed at deepening the digitization of economic sectors based on mature and emerging technologies (IoT, cloud, big data, analytics, M2M, cybersecurity, etc.) to improve their productivity, along with important contributions in the establishment of a Digital Regional Market based on policy harmonization and coordination for better regional access to digital goods and services traded over internet platforms.
We are promoting an important initiative to develop the industrial internet in Latin America and accelerate industry 4.0 processes in the region. For example, at CAF we have provided funds for the digitization of two production chains related to agribusiness and logistics; we are also advancing important initiatives to improve the development of physical infrastructures such as transport and energy based on digital technologies.
Supporting the development of the digital economy by developing public policies that promote connectivity, accessibility, security and trust, user rights and free competition in the provision of digital services is a pending task in many regulatory and regulatory schemes.
All these challenges will also be part of the discussion at the upcoming Latin American Telecommunications Congress that we are organizing together with the Government of Argentina, Asiet, GSMA and ITU. The seventh edition of this event takes place at a time of great prominence and expectation of digital transformation in Latin American societies and around the world.
New markets have opened up, new players have emerged and new conflicts are necessarily emerging, and thus, new rules must be adopted to maintain a dynamic and productive balance. But above all, it is imperative to rethink the design and use of universalization funds, and to come up with new mechanisms that leverage investment in remote areas and where deployment and access costs still make connectivity unaffordable to low-income households. A clear example of innovation or a possible miracle in this regard is Internet for All, IpT, which will allow us to offer mobile internet services to people in Latin America living in rural areas, far from the benefits of the digital world.
