IT Landscape in Argentina

By late 2001 roughly two million people were surfing the Internet in Argentina, according to research from D'Alessio IROL. There are Internet users in approximately 1.2 million homes, where at least one member of the household is connected to the World Wide Web. With improved infrastructure enhancements and more satisfactory consumer pricing options, most Argentines today access the Internet from home than from their jobs. However, people who are in lower income brackets tend to access the Internet more so from the workplace. With multiple recessionary years lingering and the economic stability of the country currently uncertain, more people are expected to connect from a place from which they do not bare the cost burden / responsibility. Surprisingly, unlike many other developing Internet markets around the world, most Internet users in Argentina are not adolescents. In fact, approximately 82% are over 24 years old. Moreover, while seventy-one percent of Internet users in Argentina use the Internet to shop, only 15 % actually make a financial transaction online. In this regard, most good and services are purchased offline by traditional means. The main barrier to e-commerce in Argentina stems from how consumers pay for good and services, since credit card transactions carry higher percentage rates in Latin America, as well as a fear of providing such information through computer networks. (1)

During 2000 Internet subscription rates grew significantly in Argentina with Internet accounts increasing by 100%. Conversely, underlying these welcomed growth rates are problems residing in users per subscriptions and areas from which they were connecting. For example, by the end of 1998, 230,000 people had Internet accounts. However almost half of users were connected through academic institutions. The other group consisted of commercial subscribers, which represented just 120,000 accounts. Argentina's current population is just over 37 million with approximately one-third living in Buenos Aires. Therefore, these numbers are not very high. (2)

Now it is worthwhile to examine the sharing of Internet connectivity. Internet subscriptions in Argentina are often shared between multiple users, such as families or small businesses. Therefore, this means that the actual number of people with access to the Internet is higher than the number of subscribers. However, this estimate still remains lower than perceived growth rates estimated for 1999 / 2000 as well as those by industry experts / analysts who believed that the market in Argentina contained almost 1 million subscribers by 2000. (3) Therefore, whom does one believe?

An important ingredient to sponsoring Internet growth involves the availability of Argentine-rich content. In 1999, it was estimated that over 4,000 Argentine websites were available. The continued development of regionally focused content is critical as an ingredient to attract an audience. Otherwise, consumers must make trade-offs for access to the right information, which could deter some from entering this market. Although Argentina has a well educated population with many people having the ability to speak English, language barriers do exist. (4)

The Argentine government understands the power behind expanding the Internet and has enacted various decrees to show solidarity for this movement. In 1997, Decree 554/97 stated the following:

	"develop a strategic plan for expansion of the Internet in Argentina that achieves several public policy objectives, such as creation of Web sites for Argentine public libraries, promotion of access to the Internet by the educational system, and promotion of a national telemedicine network
	analyze incorporation of the Internet within an analysis of the definition of universal service
	analyze and propose alternative price policies in order to stimulate and diversify use of the Internet
	encourage use of the Internet to support activities related to education, culture, information, entertainment, and health" (5)

Since this declaration, several other decrees have been enacted to show continued support for the growth of the Internet. However, it is not the words, but actions of the government which should be commended. Since 1997 the government should be credited with the following initiatives.

	Reducing costs of connecting through Telintar (ISP pricing for international connections were reduced by 50%)
	Decreasing dial-up connection costs (established a special, dedicated number (0610) named "Call Internet," through which telephone calls between the end user and ISPs are dialed)
	Enhancing contractual relations between ISPs and Telcos (defined economic and technical relations between the ISPs and the Telcos)
	Providing greater public access to Internet through nonprofit services
	Beginning the Internet 2 Argentina project (development of high-speed data network)
	Creating The telemedicine project (understand how to utilize experimental Internet applications for telemedicine)
	Founding the argentin@internet.todos program (promote the development of telecom infrastructure, IT services, and universal access to the Internet to the entire country; Argentina built over 500 community technology centers with computers, fax machines, and Internet access across the region)
	Increasing the Internet's use in the educational system (6)

Graphical Depictions

The following three graphs provided by the Argentine Ministry of Communications will better relate the past and current Internet trends (7):

Internet Users (1999)

Dial-up: 170.000 users
Dedicated Access: 55.400 users
Academics: 28.000 users
Total: 253.400

Connectivity Segmentation (1999)

Increase in Computers Sold (2000)

Regional Comparisons

Latin American Internet Users, 1998-2003
1998	1999	2000	2001	2002	2003	1998-2003 CAGR
5,282,260	8,665,386	13,313,347	18,296,126	23,547,712	29,596,186	41%
Total adjusted user data accounts for overlap in use. If a user accesses the Internet from both home and work, the user is counted once. Source: IDC

To conclude, Empirica.com, has published information recorded by the Boston Consulting Group, which also demonstrates the increased adoption rate of the Internet by Argentine consumers. The following graph will provide of visual depiction of this growth.

(8)

Picture Sources: All pictures besides that of EBAY, YAHOO, and AMAZON, were provided by PBS Online (www.pbs.org)