News Release

Growth Rate of Fixed Broadband Connections in Chile Decreases in 2008

Education in ICT, Access to Affordable High-Speed Connections and Devices Are Critical to Accelerate Broadband Penetration in Low- and Medium-Income Groups
Feb 10, 2009

SANTIAGO, Chile, February 10, 2009 - Chile added 138,000 fixed broadband connections during 2008, a 10.5 percent increase year over year, but a significant decrease from the sustained growth of approximately 300,000 new connections over the two previous years (corresponding to growth of 28 percent and 45 percent in 2007 and 2006, respectively). As of December 2008, Chile had reached 1,461,799 fixed broadband connections. These figures were released today by Cisco as part of the Broadband Barometer, a study sponsored by Cisco and conducted by IDC.

The main reason for this decrease in the growth rate is the saturation of broadband connections in the higher socio-economic segment of the population, according to the study. For the low-and medium-income groups of the population, a number of issues, including access to devices, PC penetration, price and education are factors in the challenge of increasing access to broadband connectivity.

Guillermo Moya, Cisco Country Manager, Chile

With 8.8 percent of its population connected, Chile continues to lead Latin American countries in broadband penetration, but the number is still far behind those of developed countries.

This is why the key objective of the Chilean government's Estrategia Digital (Digital Strategy) is to double the number of broadband connections in the next three years, reduce the cost of access to the Internet, and provide coverage to 90 percent of the rural population, in addition to other initiatives undertaken in cooperation with the private sector. Did we include Andres' input here?

"The country's broadband growth is slowing down and we need to take action," said Guillermo Moya, general manager of Cisco Chile. "The country's broadband use is likely to grow exponentially if low- and medium-income groups can gain access to affordable high-speed connections and devices. Competition among Internet service providers, greater access to computers, and an improvement in the average download speed to 4 megabits per second are critical to meeting the government's digital-development goals."

The executive secretary of the Estrategia Digital, Ernesto Evans, highlighted the importance of reaching a formula allowing access to families and entrepreneurs for whom currently available connection plans are unaffordable: "Just as the government made a historical investment in rural connectivity, we are also studying how the Fondo de Desarrollo de las Telecomunicaciones (Telecommunications Development Fund) could be used in lower-income urban zones. However, this matter is not solely the state's responsibility. IP network operators should focus on low- and medium-income-level markets and generate attractive offers."

Other findings from the IDC study include:

  • In terms of speed, 60 percent of the connections register a download speed above 1 megabit per second. Though these higher speeds are an improvement, they are still far from being optimum for the development of Web 2.0 tools like video and collaboration applications.
  • Prepaid broadband has already achieved 1.8 percent penetration with 16,610 new connections since it was launched in mid-2008. Government and analysts expected that this more affordable connection would reach lower-income segments of the population.