|Latin America 2005
|Public Internet booths in Peru: from the corporate market to the community market
|Edwin San Roman
|Chairman of the Board and President
|OSIPTEL and REGULATEL
Edwin San Román is the Chairman of the Board of Directors of the Organismo Supervisor de Inversión Privada en Telecomunicaciones (OSIPTEL) – Supervisory Agency of Private Investments in Telecommunications in Peru. He is also the President of REGULATEL, the Latin America Telecom Regulators Forum established to encourage the cooperation and coordination of efforts among its members and promote the development of telecommunications in this region of the world. Dr San Román is a professor at the Graduate School of the Department of Electronic Engineering at the Universidad Nacional Mayor de San Marcos, professor at the Graduate School of the Master Program for Public Services Regulation at the Pontificia Universidad Católica del Perú and professor at the Electronic Engineering Faculty of the Universidad Ricardo Palma (2005-I). Edwin San Román earned a PhD in Electrical Engineering from the Royal Institute of Technology at Stockholm, Sweden, and his degree in Electrical Engineering from the Universidad Nacional de Ingeniería at Lima, Peru. He has taken several specialisation and training courses in Sweden, Germany, Japan, Canada and France.
Ten years ago, Peru installed its first Internet booth to democratise public access to information. Today, more than 80 per cent of Peru’s population has access to the Internet through the booths and community centres. The project now provides direct employment for 60,000 people – more jobs than traditional telephony. There were no public subsidies. Small business owners invested close to US$100 million. A similar farmers’ association’s project has drawn visitors from around the world to learn from their experience.
Ten years ago, the Red Científica Peruana, the Peruvian Scientific Network, installed the first public booth in Peru with access to the Internet as part of its project to ‘democratise’ access to world information. It never expected that, ten years later, this system would enable more than 80 per cent of Peruvians who have access to the Internet, to do so through those community centres. Neither did it expect that they would provide direct employment for more than 60,000 people – many more jobs than provided by traditional telecommunications companies in Peru. The small business owners who established the booths have invested an estimated US$100 million. The price for user access is now only one per cent of what it was ten years ago, from US$3 an hour in 1994 to only US$0.03 cents in 2005 due to the competition generated by free market laws. The most remarkable aspect is that they did not rely upon public subsidies. Telecommunications in Peru have evolved considerably during the past years due to an open market, adequate regulations and the entry of important operators into the country. More Peruvians, in the main cities, as well as in the provinces, now have access to phone services and the Internet. Those in socio-economic strata A and B, as well as the corporate sector, enjoy services comparable to those of any developed country. Despite this growth, the low-income population does not yet have sufficient telecommunications services. The explosive growth in the number of people who access the Internet through public booths is a phenomenon, that is unique to Peru. An expansion of private community access, without external help, has not taken place in any other Latin American country or in any other continent. This boom in public booths has meant a lot to Peru. It has expanded public access to new Information and Communications Technologies (ICT), since they can be accessed by people of any socio-economic level. The booths are a platform that offer great potential and capacity to provide programmes related to development and the fight against poverty. This sui generis development in Peru was the result of a huge, seven year long, promotional program of the Red Científica Peruana. Access to the Information Society was the group’s main objective. It analysed the reality of telecommunications infrastructure in Peru, the costs of terminal equipment and computers and the income of the general population. It concluded that the only way to provide widespread Internet availability was to promote community access. At first, operating and service supplier companies regarded this business model sceptically. It clashed with the business models they used in every place they operated. They gave priority to residential dial up access, which, in countries without a fixed rate, they could bill for every second or minute of connection. At the end of the 90s, operating companies discovered that promoting the development of community services is a good business that widens their markets and gives society access to information. Studies of income and willingness to pay concluded that only 6 per cent of the population could afford dial up access, 12 per cent of households could afford access using XDSL or wireless technologies, but 60 per cent of Peruvian households could afford access through community centres. The booths have, in practice, become learning and training centres where young and, now, even older people go to learn how to use the Internet and discover its huge potential. They become intensive users and later on, if financially feasible, they acquire their own private home service. The Peruvian experience can serve as a model for telecommunications service providers whose business models focus only on the corporate and home sectors and do not consider the huge possibilities of community sector oriented business. In developing countries, although most low-income people cannot afford residential service they still need to communicate. By giving them access to services they can pay for only as when and needed, we can significantly expand the market. Peru’s experience with public Internet access proves this business model works. Public booths are not only a developmental alternative. They have stimulated parallel industries such as computer assembly and software development, as well as other services that generate employment and development opportunities for Peru. The booths can also provide Internet based national and international long-distance calling at greatly reduced prices. Nowadays, Internet telephony, Skype, for instance, has become especially popular in countries with low family income and high migration, as a way to keep in touch with relatives and friends. In Peru, as in other countries, given the recent improvements in quality, some public booths already offer long distance Internet-based voice services, or Voice over Internet Protocol (VoIP). What else can we expect? What new applications and developments will the Internet bring in the coming years? We cannot answer that yet, but until something better arrives, public booths are the best way to bring massive Internet access to low-income populations in urban and rural areas. Public booths for rural communities? The number of public Internet booths has grown not only in Lima, the capital, but also in many rural areas. Such is the case of the booths promoted by FITEL, the Telecommunications Investment Fund administered by OSIPTEL. FITEL’s main objective, as a matter of social interest priority, is to finance telecommunications projects in rural and impoverished urban areas that lack Internet access. In the village of Challhuahuacho, located in the Cuzco region (or departamento) of the Peruvian Andes, a private telecommunications company, with financial support from FITEL, installed a public satellite telephone and an Internet access booth – both are heavily used by the local population. This booth was installed in 2003 and local villagers call it the Telecentro. The Challhuahuacho´s Telecentro also has a public library with a small collection of literature donated by benefactors. The library has about 20 video cartoons used to stimulate small discussion groups for children on a variety of subjects. The discussions help to develop the children’s analytical skills and values. The library’s books are also lent to neighbouring villages. The librarian walks for more than three hours with books under his arms to reach the furthest communities. When he arrives, children sit around him as he reads short stories and histories. He reads in Quechua, the language of the Incas, in order to encourage their interest in reading. This is an example of how access to information in rural and poor areas promotes the integration of communities and improves local living conditions. Cajamarca, with 1,3 milion people, is the third most populated region in the country. It has a preponderantly rural population (75.3 per cent – the national average is 29.9 per cent). It is also one of the five poorest regions. The arrival of telephone services in several of its district capitals has stimulated significant progress during the past years. One of the most successful projects is the INFODES project that implements Infocentros or public Internet access booths. The project receives financial support from the FITEL fund. INFODES, led by ITDG, the Intermediate Technology Development Group, was initiated to implement a rural information system. ITDG planned and developed an experimental rural telephony project with FITEL’s support. INFODES implemented six information centres that provide Internet and telephone services. Within 30 months, the system must become self-supporting. It is interesting to see how a local information and communications market is gradually built. It starts by training local businessmen to use the ICT infrastructure (Internet, radio, telephony, library, etc) and by exploring new ways to help the local population. A project similar to the one in Cajamarca has been implemented by a group of farmers from the Huaral-Chancay valley. The local farmers association led the implementation of twelve rural Telecentros throughout the valley. The results, after only six months, are quite encouraging. Most of the Telecentros are being used by the local population, especially by younger people. The farmers have become famous for their project. They now receive visitors from other Peruvian valleys, international experts from the World Bank and African authorities all interested in learning from the Huaral experience. Based on these results, FITEL is implementing another broadband project that will give the people of 3,010 rural communities throughout the country access to the Internet and to telephone services. This project will cost about US$15 million, but it will benefit some 2.5 million people.