Regulatory frameworks: the key to meeting connectivity challenges

Digital World Blog

Between September 25th and 29th I will be attending ITU Telecom World 2017 in Busan (South Korea), and speaking at the session on “When connectivity is not enough: driving meaningful digital inclusion”. This is a great opportunity to discuss the design of a sustainable digital agenda for the development of the digital economy in Latin America. Learning from the experience of countries like South Korea, and learning from the experiences of the global tech industry attending the event, could be part of the effort to move the digital needle in the Latin-American and Caribbean (LAC) Region.

The digital revolution is transforming our societies at an unstoppable pace. From finance to education, health and government, virtually every sector or activity is being changed thanks to technology. The discussion on digital infrastructure, digital skills and digital business is therefore very relevant not only due to the expected impact in terms of macroeconomic indicators such as GDP, productivity, and employment, but also because of the social impact to improve people’s quality of life. This is the reason why the Inter-American Development Bank, along with the Government of Korea, is also organizing the third ministerial meeting[1]. A meeting with the ultimate goal of bringing together leaders from the LAC region to discuss the challenges and opportunities that technology brings to the digital economy.

Nowadays, the LAC Region – home to 600 million people – is facing significant challenges in terms of digital infrastructure, access and use of ICT across the different sectors of the economy. For instance, according to the International Telecommunication Union, fixed broadband penetration is only 10% in LAC while the average for OECD countries is 28%. Similarly, whereas 30% of the population is connected to mobile broadband in the LAC Region, the average in the OECD is above 72%. But as we know, the digital economy is more than just connectivity, it is also pretty much about having the required quality to enjoy the benefits of having internet access. In this regard, it is important to highlight that average broadband speeds in LAC are 6 times slower than in Korea and 4 times slower than OECD countries. And last but not least, the affordability of services is a major driver for the population in the base of the pyramid to have internet access – indeed, LAC citizens dedicate 10% of their monthly income for both fixed and mobile broadband compared to 2% for mobile broadband and 3% for fixed broadband in the OECD countries.

The gaps in terms of digital infrastructure – the basis of the digital economy – in LAC is evident. It will take much to bridge it, but, in my view, countries should start with updating telecom regulatory frameworks. In the majority of countries, laws and regulations for telecoms belong to the late 1990s or early 2000s. Outdated legal frameworks cannot provide the right incentives and stimulate investments in the market which is among the most dynamic in the entire economy.

ITU Telecom World 2017 and the IDB Ministerial meeting will be an opportunity to discuss regulatory aspects which contribute to achieving the dual objective of maximizing private investment without neglecting the most disadvantaged or remote areas. In this direction, debate on the efficiency in the allocation of resources (e.g. radio spectrum policies) and in the use of available infrastructures (infrastructure sharing) combined with the effective use of universal service and access funds for promoting the development of infrastructure in less-favored areas will be a key part of the discussion we expect to bring to the table with the final aim of identifying specific recommendations based on best practices and success stories among the different participating countries in both events.

It is time to become sustainable, it is time to move farther, it is the time to go digital…

[1] Every two years the IDB hosts a ministerial meeting with the Ministers and President of Regulators from the 26 IDB member countries.


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