Chile Taking Aim at Digital Divide

While a relatively small portion of Chile’s population livesbelow the poverty line, “the costs of buying a computer or renting atelephone line remain unreachable for a large segment of the population,”according to research firm eMarketer.

Though Chile has a “largely unrestricted” economy, a relatively highper-capital gross domestic product and a well-developed telecommunicationsinfrastructure, income distribution in the country is among “the most skewedin Latin America,” wrote eMarketer Latin America analyst Noah Elkin.

Wiring the Population

Among steps the government is taking to close the divide are investment in community “telecenters” to provide Internet access; a plan to connect all ofChile’s secondary schools — and half of all schools — to the Net by 2005, and extending credit to small businesses for computers, Internet connections and training.

“The government is both capitalizing on and facilitating the growth ofChile’s digital economy,” said Elkin.

Capital City is Hub

Unlike Brazil and Mexico, which have several big population centers, mostChileans live in or near one city, namely Santiago. “This means that the technologyinfrastructure in the country is as unevenly distributed as its wealth,”Elkin said.

Citing government statistics, Elkin said 57 percent of Chile’s fixed-linetelephones and 58 percent of its mobile phones are concentrated in thecapital city. Santiago also accounts for 80 percent of the nation’sbusiness-to-consumer (B2C) e-commerce revenue.

Region Poised for Growth

EMarketer expects big things from Latin American e-commerce. In June, thefirm issued a report predicting the region will account for US$15 billion ofonline sales by 2003.

While the high cost of Internet access is a barrier to growth, the firm saidthe age of the region’s population — much younger than that of the U.S.,Japan or Europe — means people there are more likely to use the Web to shop.

Brazil Leads the Way

Brazil leads Latin America in e-commerce growth,accounting for about half the region’s online business, according to reports. Yet Chile was also mentioned in a report last month from the YankeeGroup as one of several countries leading a shift among businesses to buy goods andservices online.

Other researchers also see growth in the region. Last month, the Boston Consulting Group predicted Latin American e-commerce will rise to $580 million bythe end of this year.

Brazil is the largest online market in the region,accounting for $300 million in revenue and more than half the region’se-commerce market. Mexico and Argentina, however, are catching up, the firmsaid.

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