1. Universal Service in Latin America: Recent evolution and future challenges Claudio Feijóo González 1 José Luis Gómez Barroso 2 Arturo Robles Rovalo 1 1 Grupo de Tecnologías de la Información y las Comunicaciones (GTIC) Dpto. SSR. E.T.S.I.Telecomunicación. Universidad Politécnica de Madrid (Spain) {arobles ; cfeijoo} @gtic.ssr.upm.es 2 Dpto. Economía Aplicada e Hª Económica Universidad Nacional de Educación a Distancia (UNED), Madrid (Spain) jlgomez@cee.uned.es

2. Latin America Liberalization  80’s – 90’s Telecommunication industry liberalization and reform  Increase telephone network & acquiring real and sustainable competition  Governments interest – all population access to basic telecommunication services  specific tools and concepts

3. Universal Concept Universal Access concept:  Community Access oriented: existence of means by which everybody can access to the service “telephone sets within a reachable distance to every body”  US precursor Universal Service concept:  Individual Access oriented “one phone-set per home”  Individual connection to the public communications network

4. Telephone Network Evolution BRAZIL 1995 – Constitutional amendment allowed private investment 1997 – General Telecommunications Law and Universalisation General Plan Goals 1999 – highest growth after Telebras auction 2000 – entrance of mirror companies after “exclusivity” period 2001 – Anticipated goal achievement (2003 objective) 2002 – slow down in fixed line growth 2004 – Fixed teledensity 25% Mobile teledensity 28% Mobile teledensity 28% Source: own elaboration with data from ITU and ANATEL

5. Telephone Network Evolution CHILE 1978 – pioneer country in liberalization and reform processes 1982 – Telecommunications General Law 1990 – important growth after entire incumbent privatization 1994 – fall reaction: introducing new local operators & Telecom. development Fund (FDT) creation 1995 – 99 positive network expansion 2000 – 04 network deployment has slowed down 2004 – Fixed teledensity 21,7% Mobile teledensity 42,6% Mobile teledensity 42,6% Source: own elaboration with data from ITU and SUBTEL

6. Telephone Network Evolution MEXICO 1989 – 1992 government sold Telmex 1990 – highest growth 1990 – 94 Telmex “exclusivity” period 1997 – fall reaction: local service competiton and COFETEL creation 2000 – 06 Transport Sectorial Program 2004 – Fixed teledensity 16 % Mobile teledensity 28,6 % Mobile teledensity 28,6 % Source: own elaboration with data from ITU and COFETEL

7. Telephone Network Evolution PERU 1991 – Telecommunications Law allowed private investments 1991 – 94 Creation of OSIPTEL 1995 – highest growth after government operator privatization 1995 – 1998 “exclusivity period” ends 1999 – network deployment slowed down 2001 – new local service operator and FITEL fund activation. 2004 – Fixed teledensity 6,9 % Mobile teledensity 11,5 % Mobile teledensity 11,5 % Source: own elaboration with data from ITU and OSIPTEL

8. Latin America US Programs Universal Service Programs basic elements Source: own elaboration with data from COFETEL, SUBTEL, ANATEL y OSIPTEL

9. Latin America US Programs Different programs created for the telephone network expansion agree in their basic principles:  liberalization and sector reform, incumbent monopoly privatisation,  introduction of the competition in fixed and mobile markets  operators’ financial contributions to encourage the Universal Service objectives.  the law define the Universal Service obligations and a specific development program exists. Source: own elaboration with data from COFETEL, SUBTEL, ANATEL y OSIPTEL

10. Results Liberalization–Privatization–Regulation triangle  short term network increase Liberalization–Privatization–Regulation triangle  short term network increase Positive network growth Positive network growth Brazil and Chile obtained the best results: Incentives based programs Brazil and Chile obtained the best results: Incentives based programs Effectiveness of US programs has been held back by non fulfillment commitments: Mexico and Peru Effectiveness of US programs has been held back by non fulfillment commitments: Mexico and Peru

11. Results Fixed teledensity has recently slow down Fixed teledensity has recently slow down Recent US programs subordination to a more general Information Society Programs Recent US programs subordination to a more general Information Society Programs Penetration was still low Penetration was still low Superiority in grow of the mobile sector: fix-mobile substitution phenomena Superiority in grow of the mobile sector: fix-mobile substitution phenomena

12. Conclusions  Current US designed programs: Increase all population basic service offer without considering their specific needs  Conventional US concept “a telephone set per home” linked with fixed service (technologically dependent)

13. Conclusions  A wide review of the US current practices and technologies adopted, keeping in mind:  conventional US objectives  non-voice services (include in the US definition)  present and future users requirements (broadband, mobility)  US future evolution  Public Policies and Support  Take advantage of the current demand and the autonomous market impulse

14. Universal Service in Latin America: Recent evolution and future challenges Claudio Feijóo González 1 José Luis Gómez Barroso 2 Arturo Robles Rovalo 1 1 Grupo de Tecnologías de la Información y las Comunicaciones (GTIC) Dpto. SSR. E.T.S.I.Telecomunicación. Universidad Politécnica de Madrid (Spain) {arobles ; cfeijoo} @gtic.ssr.upm.es 2 Dpto. Economía Aplicada e Hª Económica Universidad Nacional de Educación a Distancia (UNED), Madrid (Spain) jlgomez@cee.uned.es