South American Governments Pledge Billions of Dollars to Expand Broadband Access

Source: Dow Jones BUENOS AIRES — South American governments plan to spend billions of dollars in the next few years to bring high-speed internet access to under-served communities …

Source: Dow Jones

BUENOS AIRES — South American governments plan to spend billions of dollars in the next few years to bring high-speed internet access to under-served communities in order to narrow the so-called digital divide between rich and poor.

Argentina has slated $2 billion to develop a government-run broadband network, while Brazil has resuscitated state telecom company Telebras (TBH, TELB4.BR) to bring connectivity to remote regions. Meanwhile, tiny Uruguay is offering a free, if somewhat slow, broadband connection to anyone with a phone line.

“We don’t want to market this as: how easy, how fast, how fun. We want to transmit values,” Carolina Cosse, the president of Uruguay’s state phone company, Antel, said Monday at a conference in Buenos Aires.

In Uruguay, Antel provides all fixed-line phone services and is a major player in mobile telephony, where it competes with private companies.

But the challenges are far greater in the case of Brazil’s Amazon region and Argentina’s Patagonia, where connecting isolated communities spread across vast territories pose a challenge to policy makers.

In Brazil, the number of internet users is growing rapidly, jumping 20% over the last year to reach 40.5 million in a country of about 194 million inhabitants, according to technology consultants Comscore.

The Brazilian government supports carriers who see a business case in providing Internet access to under-served communities, while relying on Telebras to bring connectivity to areas that are shunned by private investors, Telebras research and development director Paulo Kapp said.

Telebras plans to use the infrastructure of state-run companies, Eletrobras (EBR, ELET6.BR) and Petrobras (PBR, PETR4.BR), as well as private companies to have a 30,000-kilometer broadband network up and running by 2014, Kapp said.

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The network expansion is part of a government plan to offer broadband services to low-income consumers at a rate of about 30 Brazilian reals ($18) per month.

The company expects to receive BRL1 billion this year from the government as part of that program.

Meanwhile, Argentina plans to spend $2 billion during the next three years to connect the country with a fiber-optic network to provide broadband and digital television to more homes.

The government plans to triple the country’s existing Internet infrastructure by laying 26,000 kilometers of new cable, connecting residents from the southern tip of Tierra del Fuego to the far north of the country.

The program could reach 50,000 kilometers of new cable if the provinces match the kilometers built by the federal government, said Pablo Tognetti, the president of Argentina’s state-run satellite operator Arsat.

Arsat has been charged with developing the network, which will involve both public and private investment. Later, Arsat will lease its network to telecommunications providers.

The government network will complement existing networks, with a focus on communities that today lack internet connectivity, Tognetti said.

 

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