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Americas Washington DC
Introduction
Introduction
The objective of the presentation is to: Explore the social impact of broadband, and especially the rise of video enabled devices emphasise the social benefits which video enabled devices and their usage for social networking may create
mention the challenges which obstruct the proliferation of video enabled devices
Suggest possible relevant actions which may enable the reaping of the benefits stemming from the use of video enabled devices for social networking
Executive summary
Executive summary
In the last decade, Latin America (including the Caribbean, hereafter LAC) has caught up to the developed world in the penetration of mobile services (mostly prepaid, with simple cheap devices) In the developed world, video enabled social networking has taken off Geographic distribution of mobile phone subscriptions
100%
90%
80%
Video enabled applications (real time, live) can greatly facilitate family interactions to improve health care, education, and other activities valued by societies, especially societies in developing countries This opportunity is particularly strong in LAC, because of the diaspora in the US, and the simple tendency to use US experience to bootstrap improvements back into the home countries There are many barriers in LAC countries, barriers well beyond the scope of the telecom regulators to fix a holistic approach across agencies is needed IDB can be a tremendous catalyst for this on a great many fronts
20%
10% 0%
Population split
Europe Asia Latin America Africa
the rise of the iPad and other tablets, plus YouTube, Skype and many other services
70%
US & Canada
2011 (pop.)
2006
2000
2001
2002
2003
2004
2005
2007
2008
2009
2010
2011
1.6% 1.4%
financial services
education Healthcare IDB estimates for LAC only are much higher: 3.2% GDP increase after 10% broadband increase (March 2012: Bridging Gaps, Building Opportunity)
Broadband
Mobile
Internet
Fixed
Broadband in LAC
OECD Venezuela
Uruguay
Paraguay Ecuador Bolivia Suriname Peru
Guyana
Chile Colombia Brazil Argentina 0% 10% 20% 30% Penetration Fixed line 40% 50%
Internet
Broadband in LAC
LAC is connected at very low speeds and at high prices, which are not affordable to many
Average price per MB Average broadband plan price Average broadband speed offered
10
Telecoms indicators suggest growth and improvement in Latin America, however, it is still behind the developed world
Latin America has experienced a surge in PC penetration
PC penetration
PC population penetration
120% 100% 80%
PC penetration in Latin America has grown from 5% in 2001 to 18% in 2011 and is expected to reach 34% by 2020
60% 40%
20% 0% 2000 2005 2010 2015 2020
PC penetration in Latin America has grown at CAGR of 13% between 2001-2011, while in North America 5% Latin America has also experienced growth in Internet penetration Internet penetration in Latin America has grown from 6% in 2001 to 39% in 2011 and is expected to reach 53% by 2020
Internet penetration
Internet penetration in Latin America has grown at CAGR of 21% between 2001-2011, while in North America 5%
Mobile penetration in Latin America is relatively high, above 120%
80%
60%
40% 20% 0% 2000 2005 Asia Pacific Latin America North America 2010 2015 2020 Eastern Europe Middle East and Africa Western Europe
Broadband in LAC
11
The deficiency of broadband is compounded by the lack of resources in many LAC countries
GDP per capita in OECD countries GDP per capita in IDB countries
100 90 80 70
100 90 80 70
60
50 40 30 20 10 0
60
50 40 30 20 10 0
Source: EIU
AR BZ BO BR CL CO CR DO EC SV GT GY HN HU JM MX NI PA PY PE SR TT UY VE
12
The rise of social networking has transformed both the developed and the developing world
The advent of social networking has contributed to a wide range of transformations, with direct effect on: human relationships communication and interaction access any time, any place ability to organise and incite social and political change promotion of education and news targeted marketing and advertisement Social networking has had an impact on both the developed and the developing world, despite the lack of robust landline broadband services in many parts of the latter US: Facebooks role in the elections Middle East: political shifts China: censure Brazil: 3rd top Twitter nation Social networking: connecting the world
13
Unlike simple mobile voice communication, video-enabled devices facilitate high quality real-time interactivity
Majority of long-distance communication is still insufficiently interactive: voice-based (usually via mobile or fixed networks) written (electronic or via a mobile network e.g. SMS) The demand for greater interactivity has been evidenced by the growth of applications such as Skype in Q4 2010, Skype had about 145 million connected users 42% of the calls made were video calls Unlike simple mobile voice communication, video-enabled devices can enable high quality real-time interactivity when executed over good quality uncongested network, video calls may act almost as a substitute of in person communication in the US, far over-represented among early adopters of tablets are grandparents Real-time interactivity via video call
14
Prices for video enabled devices are still prohibitively high for citizens of developing countries, however, future price decrease may stimulate uptake
Current prices for video enabled devices are prohibitively high for citizens of developing countries compared to their income an iPad 3 with 32GB costs USD1011 in Brazil, where the GDP per capita at PPP is estimated at USD11 900 in contrast, in the US which has a GDP per capita at PPP of about USD48 350, an iPad 3 with 32GB costs USD729 The high production costs of video enabled devices deter the mass adoption of these devices however, the anticipated decrease in prices is likely to lead to an increase in uptake Future affordability of smart phones and tablets is likely to be especially important in countries below the top 40 in GDP per capita This is the tip and maybe half of the icebergcountry by country there are also services taxes and other economic barriers; spectrum issues abound; international connectivity limitations will have to be solved; intellectual property issues are also likely to be encountered Comparative pricing for iPhone 4S
Device iPhone 4S 16GB Operator Apple online store, BR Apple online store, MX Apple online store, US Price (USD) 986 Price (local) BRL1999
iPhone 4S - 16GB
754
MXN9699
iPhone 4S - 16GB
549
USD549
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Education
Healthcare
E.g. Patients Know Best, an online consultation record based on Skype, allows patient-doctor communication
Other uses
Ambulance and mobile medical personnel, police, social workers, first responders and front line inthe-field people
16
Video enabled social networking may be capable of stimulating positive change with a success rate greater than other projects like distance learning
Video enabled social networking may be capable of stimulating positive change in habits in the LAC region social networking is driven by users, not imposed LAC residents are enthusiastic adopters of social networking applications Emerging market citizens are willing to spend on telecoms middle class Brazilians are willing to spend 3% of income on telecoms Previous projects have had limited success due to lack of real-life interactivity MIT Media Lab USD100 Netbook distance learning Social networking may stimulate domino effect in human behaviour
Social Networking is the spoonful of sugar that helps the medicine go down
17
The experience of OATS (Older Adults Technology Services) in the US offers a compelling analogy as to why our thesis will work [1]
As nothing like what we have been suggesting has had the time to penetrate LAC, we looked for an analogy in the US a technology challenged group that would, upon being enabled, use technology as the means to many other ends. That led us to OATS OATS, founded in 2004, has taught over 5,000 elder Americans in Brooklyn how to use laptops, PCs, tablets and other tech devices for a wide variety of purposes 20-25% of their constituency is Latino We interviewed their founding Director, Thomas Kamber, a recognized authority in technology issues for older adults. Key findings of their experience include Tablets are potentially the best medium yet, because the live video is more impactful Tablets are especially useful for their Latino constituencykeyboards and mouses are a hindrance for the barely literate, and for the English challenged. The widely recognized intuitiveness of the iPad greatly eases the process of learning to use, and greatly encourages use and participation
For all constituencies, in the US the laptop/PC interfaces for health care interactions are catastrophically badauthentication gets in the way, and video can solve that
18
The experience of OATS (Older Adults Technology Services) in the US offers a compelling analogy as to why our thesis will work [2]
Kamber embraces the theory of the spoonful of sugar than helps the medicine go down A course on health care applications drew a modest response. Courses on how to use tablets/pcs for a range of fun and useful applications draws far betterHe said it was best to do travel, entertainment, social networking, and health care and educational topics all together For a specific five week course, OATS did a study of 66 seniors, before, during and after the course. The results are stunning:
When tracked, 71% of the seniors used their new found skills to do health care research
His opinion is that the LAC diaspora is especially ripe for video enabled social networking because the interfaces are so much easier to use, and the desire for social networking, especially within the extended family units, is so strong The video format is an equalizer Id be an optimist about use by Latinos
19
Latin America can tap on strong connections to the US to develop ICT usage benefits locally
There are one million or more foreign born in the US from Brazil and the Dominican Republic, while for Mexico, this figure is 10M The US communities can be surprising large compared to the home population: for every 7 Dominicans in the Dominican Republic, there is 1 Dominican in the US (for El Salvadorans the ratio is 4 back home to 1 in the US) Today the strength of the bonds between migrants and their home country can be measured in the level of remittances The World Bank estimates that USD325 billion will flow back to developing countries in 2010, of which USD58 billion will go to Latin America and the Caribbean alone In some countries, these remittances can add up to a significant impact in 2009, remittances contributed 19% of the GDP of Honduras, 17% for Guyana, and 16% for El Salvador Family calling patterns between the US and these countries of weekly and often nearly daily are common, especially in LAC countries Migrants can contribute far more to their home countries, both in their traditional family role as parent, spouse, or child, but also in many cases leveraging their professional roles as doctors, teachers, or lawyers
Broadband benefits
20
For the EU, Analysys Mason reviewed 100+ studies of the benefits of broadbandthe analysis goes far beyond what is presented today
Healthcare
eGovernment
Community
Wellbeing
Environment
21
The proliferation of video enabled social networking is constrained by the infrastructural challenges in Latin America
Broadband uptake is deterred by: poor or non-existent landline infrastructure high digging up/ replacement costs New mobile technologies such as LTE offer an alternative: higher throughput than 3G lower operating costs 2G mobile services (no broadband) are widely available, however, 3G (reasonable broadband, but not excellent) is rather limited. 4G (excellent broadband) is in distant future Overall, mobile broadband penetration in developing countries is much lower than in the developed world Comparison between developed and developing countries
140 120
100
80 60 40 20 0
2008
2005
2006
2007
2009
This chart says, without intervention, the pattern of mobile broadband growth will repeat the one of mobile subscribers growth, with a loss of benefits to LAC
Source: ITU
2010
22
Most countries have so far mostly concentrated on coverage and penetration Broadband stimulation targets
Coverage
Penetration
Usage
Intensity of usage
As regards to broadband take-up stimulation plans, developed countries have so far mostly concentrated their efforts on increasing penetration of ICT services and broadband network coverage, through a set of regulatory and policy implementation tools targeting access and market efficiency issues
Broadband benefits
23
Developing LAC countries should stimulate usage intensity to exploit broadband benefits
Broadband stimulation targets
Coverage
Penetration
Usage
Intensity of usage
While supporting coverage and penetration increases, developing countries should shift their efforts from the supply side to the demand side, by stimulating broadband usage, and highintensity usage in particular. These are the new conditions for access regulation to stimulate ICT growth and growth in the economy (consumer and enterprise)
24
The challenges facing LAC are easy to list but hard to solve. #1 is a lack of resources. Here are the next big six (which of course are related to #1):
Lack of backbone (or very high costs) Lack of final mile access (fixed and mobile) While not the focus of this presentation, Analysys Mason did a nine country study elsewhere in the developing world (all but one country had similar GDP/capita to most of LAC). Even with the comparatively benign geographies involved, mobile was consistently the only viable answer to reach 60% or more of the population High cost (and often limited) international connectivity High cost devices Lack of spectrum (see item two) Lack of IT literacy/capability in the general population
25
In LAC a holistic, multi-agency approach will be needed, with in country executive branch participation, if not leadership
The telecom regulator, while mostly sympathetic to the overall thesis, has no control over many of the barriers (e.g., tariffs, taxes, even international telecom capacity) let alone the ability to develop and promote heath care or educational programs e.g., the telecom regulator in Panama understands this In a situation where the benefits cut across many sectors, national executive leadership will be an important catalyst This is an opportunity for a catalyst, like the work of this conference, and the work of multinational bodies, and simple concerted effort in each country
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Contact details
John Krzywicki
Partner
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John.krzywicki@analysysmason.com
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