Internet Infrastructure

Colombia has joined with its South American neighbors to promote the "Sistema Andino Internet" or Andean Internet System. This project is being promoted and coordinated by la Asociacion de Empresas de Telecomunicaciones de la Comunidad Andina, or the Association of Telecommunication Companies of the Andean Community.

This Internet project seeks to create an Internet backbone from Venezuela in the North through to Bolivia in the South.  (Please see diagram below.)  Each country would have its own Puntos de Acceso a la Red, or Network Access Points (NAP's), along with service connections for Internet Service Providers.  (17)

The creation of this backbone would also allow for better international access and a faster connection both to and from Colombia and the rest of the world.

(18)

Current State of the Internet in Colombia and Latin America

Colombia has approximately 25,000 users with Internet access. (19)   In the Latin American countries, however, Internet usage is still concentrated in Brazil and Mexico where Internet access had a head start.  While Colombia is ahead of its near neighbors in telecommunications access, it remains behind most other Latin American countries in domain availability.

The number of Internet users in Latin America is increasing at a rate of 100% per month, with over one million users overall in the region.  While Brazil, Mexico, and Chile have the largest established networks, Colombia and Panama have the fastest growing networks.  Both telecom competition through privatization/deregulation and investment in Latin America have combined to directly increase Internet growth through increasing accessibility and lowering costs.

At this time, primary Internet users in Latin America are universities, followed by banks, car dealers, and computer and consulting service companies.   Overall, business and government account for an estimated 40% of Internet usage while personal use accounts for approximately 60% of all Internet users.

Some facts to be noted in the above table:

In the nodes category, Colombia's total equates to approximately 10% of its neighbors Argentina, Venezuela, and even tiny Ecuador.

It follows that Colombia's nodes per 1,000 persons then is extremely small at .0008.

Also, in the number of WWW servers category, Colombia is severely overshadowed with only 8 WWW servers to Venezuela's 783, and Ecuador's 699.

It is also important to compare Colombia to the final row that contains the totals for Latin America and the Caribbean.  Colombia has less than 1% of the total nodes, WWW servers, and total domains used in Latin America and the Caribbean.

With the portal capabilities, MSN plans to offer local versions of MSN services such as MSN Hotmail, MSN Web Search, and MSN Messenger Service.  The portals will be rolled out on a market-by-market basis with the sites containing local content in 13 languages to a projected number of 120 million users, or more than 90% of the estimated online world population. (21)

While MSN is trying to catch up to other companies offering portals and international sites such as Yahoo! and Lycos, including Colombia and other Latin American countries has many implications.  First, the Latin American market is seen as viable and profitable.  Second, offering language specific sites with local content encourages local use of the product, thereby increasing Internet usage.  Finally, through offering a Latin American block of portals, Colombia and its neighbors have the ability to increase information sharing which will later result in increased business opportunities.

Current Obstacles

Internet providers in Colombia, Argentina, Brazil, Chile, Mexico, and Venezuela will spend up to USD $6.3 million each on technology in 1998, equating to more than USD $390 million.  These ISPs are telecom service providers and cable operators that handle 40% of the accounts in Latin America, or 1.2 million Internet users.   Typically these ISP's have two links to the Internet backbone with approximately one third using MCI for that international backbone connection.

However, the largest inhibitor to Internet growth in Latin America is still basic telephony costs.  An average, Latin America users do not spend more than 22 hours per month on the Internet.  (22) This low average is due to the fact that Latin American web users must pay for ISP connectivity and then per-minute usage fees to the local telephone company.

This per-minute usage fee has allowed for regional cable Internet access layers to step into the market as a low cost alternative to the usual analog dial-up service.  Since these cable companies offer higher bandwidth as well as no per-minute charges and therefore lower prices, cable Internet interest is growing in Latin America.  Further, cable operators in the region predict that cable access will represent the largest percentage growth among all access types, accounting for a jump of 504% over the year. 

Listed below is a comparison of Internet access plans offered in Colombia with their costs.  As seen below, there is a basic monthly charge as well as an additional per minute or hourly usage charge beyond that.  Other Colombian ISP's include: Telecom de Colombia , Internet de Colombia, Latino Net, Openway, and Compuserve.

It is evident from the above table that even basic service with limited access can become costly for avid Internet users.  Until the extra per minute or hour usage charges are obliviated, Internet access will not increase at the same level as other areas of the world.

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