Broadband is Key to the Virtuous
Circle of Development

Having access to and using the Internet, particularly broadband, are essential for the development of modern societies and economies, given they condition a country’s competitiveness and social inclusion.

Closing the digital gap in broadband is urgent. As the importance of this technology in society increases, new forms of social exclusion deepen. Lack of access to this tool in Latin America and the Caribbean creates other gaps in production, innovation, education and health, among other areas. This situation is even more concerning when considering that industrialized nations have been rapidly incorporating these new technologies.

Available data shows significant differences between regions. In 2008 broadband penetration in countries of the Organization for Economic Cooperation and Development (OECD) reached 26% of the population, while in Latin America and the Caribbean it was only 5%.

In 2009 the price of every 100 Kbps (speed of the Internet connection) in the region was US$5.8, while it was US$1.3 in the OECD (excluding Mexico). Per capita GDP in OECD countries in 2008 was over US$40,000, but in Latin America and the Caribbean it reached only US$6,000.

Lack of access to broadband in Latin America and the Caribbean often has nothing to do with preferences, interests or generational variables, but rather with socio-economic limitations to consuming information and communications technology (ICT) services and acquiring the capabilities to use them. This makes it increasingly difficult to incorporate the poorest segment of the population.

Broadband should not be conceived as just another telecommunications technology or service. It is a fundamental element of a new environment that facilitates developing structural complementarities as part of a dynamic that impacts all social and productive sectors in a virtuous circle of development based on the principles proper of networks: efficiency, inclusion and cooperation.

Due to the impact of broadband on economic and social development, many governments in industrialized countries have implemented national plans to incentivate its expansion as part of their reactivation policies in light of the global economic crisis.

On the contrary, although there are plans and initiatives in Latin America and the Caribbean to foment the development of broadband, they can’t be called “policies”, because they are not part of a comprehensive strategy that also includes networks and infrastructure, capabilities, contents and applications.

In addition, given that the market does not suffice to massify access to broadband, it is essential for governments to intervene with policies to universalize the service.

These policies should focus on building the necessary infrastructure and ensuring conditions to increase access, particularly to more vulnerable groups. They should also make sure the bandwidth for each user is sufficiently broad for them to use the applications without difficulties.

Monthly cost of wired broadband of 1 MBPS in relation to monthly per capita GDP
(Percentages)

Source: ECLAC, based on data from Omar de León, “Outlook for telecommunications technologies and their implications in markets and regulatory frameworks in Latin American and Caribbean countries”, Project Document 271, Santiago, Chile, 2009.

*by Information Society Programme, Production, Productivity and Management Division