Broadband in Argentina sees steady growth

18 Sep 2007 | 15:45 BST

By Fernando Cassia in Argentina

Cheap modem maker Huawei rejoices

HEAD COUNTERS at Argentina's National Statistics Institute have released their quarterly report on Internet usage in the country, which shows a steady growth in broadband adoption.

The public statistics body began researching the Internet usage trends back in 2002 and started publishing quarterly reports in 2004. Five years ago, the total number of internet connections was near one and a half million, at 1,468,073. In 2007, that number nearly doubled to a total of 2.7 million users.

It's interesting to note that the growth of broadband came not only from those moving from dial-up to ADSL and cable, but also from new users who apparently went straight to broadband. The number of 'subscription free' - also known as pay-as-you-go dial-up connections - remained largely unchanged in the last five years at around 700,000. The system works down here very much like in Blighty - think Velnet and others. You pay a local call rate and the ISP gets a piece of the action, but there's no monthly bill.

It should be noted that the 2.7 million figure is is the number of connections, not users. In this country, as elsewhere, the number of users is estimated as much higher, as there is a lot of people who access the Interweb from their workplace, from schools, public libraries, and also the ever-growing presence of Internet cafes. In the latter case, what shows as a "single connection" can be serving between 10 and 20 users.

Looking at the data, it's quite impressive to see how the number of broadband customers grew from 763,000 in December 2002 to over two million by mid-2007, with a spectacular 38 per cent year-on-year growth rate in residential broadband subscribers in the last year, and a 20 per cent year-on-year increase in the total number of connections.

The reports include a separate chapter on non-residential connections, that is, businesses and organisations. In that segment, the growth rate was at 21.5 per cent with the total number of connections reaching the quarter-of-a-million mark - 253,590 to be precise. Eighty per cent of connections go through through the top ISPs - those with over 50,000 customers, and 16 per cent use medium size ISPs with over 5,000 customers, and the remaining four per cent is distributed to tiddly providers with 5,000 customers or less.

Who will benefit, besides the incumbents and the ISPs, from this expansion of broadband usage? Chinese kit provider Huawei, we suspect. A friend pointed out a clever observation: when you contract an ADSL link nowadays with one of the two private, local-loop monopolies - Telecom in the northern half of the country and Telefonica in the Southern half - chances are you will get a cheap-as-chips Huawei MT882 Ethernet or MT810 USB ADSL modem. Long gone are the days where the telcos would provide a rock-solid - and more expensive - Cisco 67x. In that sense. the two incumbents' ISP brands - Telefonica's Speedy and Telecom's Arnet - seem to have embraced the inexpensive modem/routers from China.

Back to the numbers, the report ends with a mention of ISP e-mail accounts, which went from 4.1 million last year to 4.5million by mid-2007 - an eight per cent increase. All these reports - both on e-mail accounts and internet connections - are based on data provided by the ISPs, and the statistics agency makes it clear that e-mail statistics may be under-reported because some free e-mail providers do not provide data to them.

While all this info about growth is nice, and while the quarterly stats are good, one has to wonder how good things could get if the government decided to implement local loop unbundling, which is still pending and is the elephant in the room. I, for one, think it's highly ironic to see a densely-populated city like Buenos Aires full of point-to-point antennas to bypass the incumbents' local-loop monopoly, when fibre ( FttP) should be the ideal solution instead of polluting the airwaves.

To put these numbers in context, Argentina's population - whose last census was done in 2001 - was calculated at 38.5 million by mid-2005. It should also be noted that this growth in broadband usage is surely associated with the economic scenario, where the country has been enjoying five consecutive years of growth - 8.4 per cent average year-on-year GDP growth - with fiscal and trade surpluses in the last five years, diversifying exports - tourism alone now rackets more than cereal and meat exports combined- and a reduction of unemployment from 21.5 per cent in 2002 to 8.5 per cent.

During this period of time, the country has been receiving plenty of IT investment from the likes of Motorola, Intel, Google, Indian powerhouse TCS, EDS, and others, which see it as an attractive destination for offshoring and to establish regional headquarters for the so-called Southern Cone region. µ

L'INQs
.AR internet access stats - September 2007 report (PDF, Spanish)
PDF reports 2002-2007 (Spanish)
Stats Agency - English page
Argentina: doing things their own way
Cordoba: Silicon Valley South
Argentina's Silicon Valley thrives
Argentina: more near-shore than offshore
Argentina scores with WiMAX
Telefonica and TelMex step on the gas pedal in Latin America
Telefonica, Telecom Italia tie up rattles Brazil
South Asia slow to hop on broadband bandwagon
Local Loop Unbundling hailed as solution

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