Internet Access in Argentina: Obstacles & Opportunities Mid-Quarter Status Report: LAS194/CS377C THE INFORMATION REVOLUTION IN LATIN AMERICA By: M. Beem & P. Chiaraviglio 14/04/2019 Argentina II

Assumptions Internet usage will continue to grow due to “Positive Feedback” phenomenon Relative to LA, Argentina has high per capita GDP and education levels. This makes it an Internet “prone” market Given 1 & 2 above, “broadband” access demand will grow 14/04/2019 Argentina II

Methodology Look into the drivers affecting Argentina II Project’s assumptons Demographic and Social Indicators Economic Indicators Government Regulations State of Infrastructure and Technology Case Studies Velocom Universidad de Buenos Aires Business Plan 14/04/2019 Argentina II

Demographics & Social Total Population: 37 Million (47 M by 2025) Growth rate: 1.16%/year (lowest in LA) Major Cities: Greater Buenos Aires (12 M), Cordoba (1.1 M), Rosario (1.1 M) Male/Female ratio: 0.98 Life Expectancy: Male: 72 yrs, Female: 75 yrs Age Distribution: 0-14yrs: 27%, 15-64yrs: 63%, over 65: 10% Literacy: 96.2% Schooling Rates: 6-12yrs: 98%, 13-17yrs: 70%, 18-22yrs: 28% Urban Population: 89% 14/04/2019 Argentina II

Demographics & Social Demography of Internet Usage: 2.5 Million (7.5 M 2003) Growth rate: ~75%/year 2/3 are male, but growth in female pop. is greater 2/3 are new users (2 yrs or less) 71% have attended university 76% access the Internet from home 26% of users have bought over the Internet In spite of economic recesion, Internet usage and related business has been on the rise 14/04/2019 Argentina II

Economic Breif History 1810 - 1930: Independence, founding of Republic, economic prosperity fueled by agro exports to Europe, large European immigration 1930-1990: State directed industrial autarky, welfare state (Peronism) alternating with military dictatorships, all contributing to economic deterioration and extreme hyperinflation (5000%) 1990-Present: Privatization, de-regulation, trade liberalization and integration (Mercosur), “Convertibility” Plan 14/04/2019 Argentina II

Economic Current Situation GDP in 2000: $ 300 billion ($ 367 in PPP terms) GDP per capita in 2000: $ 8000 ($ 10,000 in PPP)-- the largest in Latin America Growth Rate: -3% in 1999, projected 0% in 2000, but recovery expected in 2001: 2.5 - 3.5% growth prediction Interest Rates: Currently (Feb 2001), 8% Inflation: -0.5% Services: 61%, Industrial/Mfg: 32%, Agricultural: 6% Largest trading partner: Brazil Largest Foreign Investors: Spain, closely followed by the US 14/04/2019 Argentina II

Government Regulations History & Telecommunications Act of 2000 1988 Secr. de Comunicaciones grants a cellular license (Movicom) 1989 ENTel breaks up into North (Telecom) & South (Telefonica) 1990-1999 Ratio of lines/100 inhabitants goes from 11 to 20 1993 Two new license granted for cellular telephony (Miniphone & CTI) 1999 Long distance carrier “choice” given to customer November 2000 the Telcommunications Act is enstated with wider repercussions for customers and competitors 14/04/2019 Argentina II

Government Regulations Repercussions of the Telecommunications Act of 2000 Full de-regulation of local, domestic and international long distance 26 new operating licenses granted “Level” playing field for new companies Open Network interconnection policy Drop in Interconnection rates: 2.15 cents to 1.1 cents “Universal Service” contribution maintained at 1% Dramatic drop in domestic and international long distance tariffs (from ~$0.50 to $0.20/min) Increased use of the internet New broadband technologies being offered 14/04/2019 Argentina II

Government Regulations The Internet, Government Policy and Statistics The Internet is a Matter of National Interest SECOM must develop/promote usage through the argentin@internet.todos program Incorporate into defitinion of Universal Service Incorporate a price “architecture” to facilitate Internet usage 50% price reduction of Intl connections to ISPs (1997) 0610 Dedicated number, end user saves up to 50% dial-up costs Liberal possition in Internet Content and Access by users Based on US Supreme Court decision of Reno v. ACLU The Internet 2 Argentina Project Inspired on US Internet 2 high speed data network Objectives are educational, telemedicine and scientific & tech. research 14/04/2019 Argentina II

Access Technologies in the Argentine Context Hybrid Fiber Coax (FiberTel, Multicanal) Digital Subscriber Line (Telefonica, Telecom) Fixed Wireless (Velocom, Milicom) Fiber to the Curb, Fiber to the Home (Not offered yet) Other (Satellite: Impsat) 14/04/2019 Argentina II

Access Technologies in the Argentine Context Hybrid Fiber Coax ($ 99 - 50, speeds 512-128 Kbps) 14/04/2019 Argentina II

Access Technologies in the Argentine Context Fixed Wireless ($390-59 speeds 960 Kbps - 64 Kbps) 14/04/2019 Argentina II

Future Agenda Continue to collect data for the different drivers Finish case studies Formulate business plan or recommendations for broadband access in Argentina 14/04/2019 Argentina II