Observacom
Análisis - Perú

Broadband in Peru: where are we heading to?

“The actions taken have been limited to mainly developing just one side of the issue: the supply of services. Demand for services is related to the skills of the population, and while isolated public and private initiatives do exist, it would be extremely important to have a substantial plan to promote digital literacy.”

 

Carlos Valdez Velásquez-López*/ Peru, June 2015

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Since 2014 an important broadband telecommunications infrastructure project is being implemented in Peru: known as the Fiber Optic National Backbone (RDNFO), a concession for this project was awarded to the Azteca Telecommunications Company. Through this initiative, 180 provincial capitals of Peru will be integrated into a fiber optic network, following which all of the country’s districts will also be integrated. In the case of the latter, regional projects have already begun, with concessions for Ayacucho, Apurímac and Huancavelica awarded to the Gilat To Home (GTH) company, and that for Lambayeque awarded to Telefónica. Clearly this is a project that every Peruvian should support, as it will definitely contribute to the country’s socio-economic development, driving progress and generally improving people’s well-being.

However, it is also important to remember that while Peru needs the broadband infrastructure, given that without it is not possible to provide applications for telemedicine, tele-education, e-government, e-commerce, etc., this is only one side of the coin, as its availability will also contribute to the improvement of services offered. Although another equally important aspect is the demand for broadband services.[1] It should be noted that the traditional notion of the term broadband has been associated with technical issues such as network capacity and the speed of downloading information on the Internet. For the International Telecommunication Union (ITU), broadband should be considered as a part of a country’s basic infrastructure, alongside energy, transport and water. For the World Bank, the concept of broadband has evolved from originally being considered a technical issue of the networks, to becoming an environment that includes the intervention of networks, the services they can provide, their applications, and lastly the users. That is to say, the present concept involves both the supply as well as demand, and therefore, strategies to develop broadband should consider both aspects. However, there is also a direct relationship between use of Information and Communication Technologies (ICTs) and the demand for broadband services. And although the intensive use of ICTs is conditional on the existence of a broadband infrastructure, they also depend on how capable people are in order to use them, and at individual level, as well as business and government level. Therefore, it is important to know the level of use in terms of capability at each of these levels, in order to develop proposals for improvements that lead to greater use of ICTs and consequently increased demand for broadband services. The graph below is based on figures released by the World Economic Forum (WEF 2015), corresponding to the components of usage and readiness of the ICTs, the first of which is broken down into the pillars: individual, business and government. The capability component depends on the ICT infrastructure of a country, as well as the infrastructure that is important for the development of ICTs, while also being a function of the affordability of mobile and internet services, ultimately depending on the ability of the population to effectively employ ICTs through education about their use. The usage component assesses the level of adoption of ICTs by the main stakeholders in society, i.e., individuals, businesses and government. Given that the level of use depends on ability, in Figure 1 a graph is presented which shows that at the level of individuals, countries greater capabilities also have a higher degree of ICT usage.

Thus countries that use more ICTs (Finland, Sweden and Singapore) are in turn the countries with the highest level of individual ability. In contrast, in the region of South America, Chile (placed 37th) and Uruguay (38th) have a distinct advantage, followed by Colombia (59th) and Brazil (60th), with Argentina further down the scale (76th), and Peru ranked at 91 out of the 143 countries evaluated. This reveals a worrying trend that is not new and should merit the attention of the highest authorities of the government, because it would seem clear taking into account current policies[2] and projects such as the RDNFO, that the actions taken have been limited to mainly developing just one side of the issue: the supply of services. Demand for services is related to the skills of the population, and while isolated public and private initiatives do exist, it would be extremely important to have a substantial plan to promote digital literacy, as has been carried out in countries such as Colombia with its Digital Citizens Program. International experience has shown that the adoption of comprehensive policies for broadband and ICTs are closely linked to awareness and leadership at the highest levels of government (from the President down), as has happened in the countries of the aforementioned region, which has even resulted in the reform of State institutions in order to transversely insert ICTs throughout their structure, leading in the case of Colombia to the creation of a Ministry of ICTs (MINTIC). Meanwhile, Peru has a Ministry of Transport and Communications (MTC), with a very large agenda focused on transport infrastructure, which of course is also very important for the country. However, for the same reason other elements of this Ministry should be separated and developed with a more modern outlook, something that has led other countries to move far ahead in terms of competitiveness (according to the World Economic Forum). Otherwise, it is worrying to think that we in Peru could have in the coming years a white elephant on our hands in terms of the RDFNO, with low levels of demand for the broadband services that could be offered via this network.

*Doctor in Engineering

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[1] According to statistics issued by MTC for the second quarter of 2014, the penetration of fixed-line Internet stood at 5.52% while that for mobile broadband was 36.6%, http://www.mtc.gob.pe/comunicaciones/regulacion_internacional/estadistica_catastro/documentos/Información%20Estadística%20II-T-2014.pdf

[2] Broadband Law No. 29904

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