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The Four Barriers to Latin America's Mobile Internet Boom

The Four Barriers to Latin America's Mobile Internet Boom

Posted by PanamericanWorld on February 25, 2016

If 90 percent of Latin America is covered by mobile broadband, why is more than half the population not online? Here are the four major barriers new research has found keeping the Latin American economy from bursting on the mobile Internet scene.

Lack of skills for the digital age is a factor keeping the Latin American economy from exploding onto the mobile Internet scene, according to research recently released by the global mobile industry association GSMA, but there are other barriers that can be more easily surmounted through increased cooperation between mobile operators and local governments.

The GSMA study looked at reasons why the 634 million people in Latin America and the Caribbean region -- who were covered by mobile broadband networks, but not yet connected -- were being left out of the modern mobile Internet age.

Big Gap Between Coverage and Connectedness

The 2015 consumer survey "Digital inclusion in Latin America and the Caribbean," commissioned by GSMA's Connected Society and produced by GSMA Intelligence, found that the technical 'digital divide,' or the geographical gaps in mobile data coverage in the region, was relatively small.

Only about 10 percent of the population, or about 64 million people, lived outside of a 3G or 4G network's footprint. But a full 57 percent (363 million) of the population were not connected, including 100 million people in the largest market, Brazil. That's nearly half of the region that could have mobile connectivity to the Internet, but choose not to (or cannot) connect.

So where does the gap between coverage and inclusion come from? Here are the four barriers GSMA found keeping the lid on Latin America's mobile Internet boom (for now).

Lack of Digital Skills

This first barrier is a common problem in the digital divide, no matter the geography. The Internet is still relatively new; the mobile Internet even more so.

Basic literacy rates for Latin America are higher than the global average, GSMA found, but the gap in digital literacy is persistent. Prioritizing digital education would likely help, as would the natural build-up of digital literacy when connections are more readily available, which leads to the other three barriers.

Affordability

This is a big reason for lack of connectivity despite a wealth of coverage, especially in Brazil. For the bottom 40 percent of the economy, on average, maintaining a mobile Internet connection takes 17 percent of income.

Compare that to the 2 percent of income mobile Internet costs on average for the top 20 percent of the population, and you get the idea of how significant a barrier affordability is in Latin America. Add consumer taxes like the 30 percent levied by Brazil and Argentina, and the total overall cost of connectivity becomes nea impossible for most to cover.

Network Coverage

Despite the large (90 percent) footprint of the mobile Internet in the region, 1 in 10 living in Latin America or the Caribbean have no option for connectivity. Those gaps tend to exist in rural, forested or mountainous regions, or for smaller islands, where the GSMA only sees public-private partnerships as a viable option for extending coverage.

No Locally Relevant Content

It's been said before: the globally connected Internet is not really that global, culturally speaking. GSMA's research points to a limited supply of content available in local languages or with any local relevance to the connected: web traffic data analysis, for example, found that less than 30 percent of Internet content accessed by Latin America and the Caribbean was in the relevant local language.

The content that was accessed, such as websites or apps, were mostly entertainment-related, which the GSMA believes might lead to a misperception in the region that the Internet is mostly another form of entertainment media rather than the economic engine that well-connected cultures in more developed regions see it as.

In fact, the lack of content that's relevant to the daily economic lives of Latin Americans is seen by the research as the most important factor for a lack of connectivity -- more than affordability or coverage -- in most of the region's markets.

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