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Networked Access

Network Access

Chile has a population of 16,601,707 (July 2009 est.) There are 877,817 internet hosts, 8,369,036 Internet users as of Dec/08, 50.4% penetration, per IWS; and 1,461,799 broadband Internet connections in Chile as of December 2008. This is a 4.1% increase from June 2008. The number of home broadband connections is 1,233,802 (84.4% of all broadband connections). The nationwide broadband penetration rate is 8.8 per 100 inhabitants.

Internet Growth and Population Statistics:

Note: GNI is Gross National Income per capita, and corresponds to
World Bank data for the years 2000 - 2007 in US dollars.

Information Infrastructure (Stage 3)

During the last decade the computer and telecommunication industries have experienced significant growth in the Chilean economy, positioning the country at the leading edge in the Latin American context. Actually, the penetration level is 5.04 computers for every one hundred inhabitants, a very large figure compared to Argentina , which has the second highest rate of penetration (1.34 per one hundred inhabitants), and well above the regional average of 1.22.

In general, Chile enjoys some of the best telecommunications infrastructure in South America . The World Economic Forum ranked Chile 31st in the world in its most recent survey of ‘degree of preparation to participate in and benefit from information and communications technology’; the highest ranking in the Latin America region. However, the report concluded that Chile ’s e-development was held back by some familiar failings including an inefficient government bureaucracy and over-regulation.

Internet Av ailability (Stage 3)

In Chile , large portion of the population has a PC, access to the Internet and increasingly broadband is becoming available to the larger population. This has allowed the adoption of and reliance upon technology to spread. Most of people who connect to the Internet do so through an Internet access provider, and a small percentage through an on-line commercial service. However, in Chile there are very few on-line services and the services they provide are very limited. In Chile users do not have access to well-known companies such as America Online and others.

Internet Affordability (Stage 3)

With respect to the source of Internet access, the majority of the upper middle class have access to the Internet from home. On the other hand, the majority of people of the middle class with average income have access to the Internet from work; and in the lower middle class stratum, most of the people have access from an educational institution. Although some people have access to the Internet from home, tend to connect from the place of work or study. For the same reason more than 60% of users do not pay themselves for the connection: their employers, universities or schools pay for the connections. Approximately 20% of users pay less than $40.00 for their connection, and another 20% pay between $40.00 and $100.00. Get roughly the same bandwidth you pay about $30/mo in Northern America or Europe you'll have to pay $80 in Chile .

VTR, Chile 's largest cable company, offers several "always on" plans through cable modem (as of November 10, 2008):

• Flat-rate plans:

• 2 Mbit/s (downstream)/512 kbit/s (upstream), US$40.91/month

• 4 Mbit/s/512 kbit/s, US$45.76/month

• 8 Mbit/s/512 kbit/s, US$55.47/month

• Other:

• 1 Mbit/s/512 kbit/s (1 GB monthly download cap; reverts to 200 kbit/s/100 kbit/s when limit is reached), US$19.24 (up to two 1 GB extensions may be purchased once a month, usable for 90 days)

• 15 Mbit/s/512 kbit/s (20 GB monthly download cap; reverts to 4 Mbit/s/512 kbit/s when limit is reached), US$71.64 (a 10 GB extension may be purchased once a month, usable for 90 days)

Note: Exchange rate used: 1 US dollar = 618.39 Chilean pesos (October 2008 average)

Telefónica Chile , Chile 's biggest phone company, offers several ADSL plans (as of November 10, 2008):

• Flat-rate plans (using a Ethernet and USB modems):

• 300/200 kbit/s, US$34.75/month (regions I-X), US$49.31/month (regions XI-XII)

• 600/300 kbit/s, US$80.84/month (regions XI-XII)

• 1 Mbit/s/550 kbit/s, US$39.60 (not available in regions XI-XII)

• 2 Mbit/s/550 kbit/s, US$44.45 (not available in regions XI-XII)

• 4 Mbit/s/550 kbit/s, US$49.31 (not available in regions XI-XII)

• 6 Mbit/s/550 kbit/s, US$54.16 (regions I-X)

Most plans above will see their download speed doubled or increased by December 2008. Prices will presumably stay unchanged.

• A pre-paid plan:

• 1 Mbit/s/550 kbit/s, US$32.34 (2 hour extension for US$0.81, 24 hour extension for US$1.62)

Note: Exchange rate used: 1 US dollar = 618.39 Chilean pesos (October 2008 average)

Entel, another major telecommunications company, offers several plans through ADSL:

• Flat-rate plans:

• 200/64 kbit/s, US$37.30

• 600/128 kbit/s, US$46.30

• 1 Mbit/s/256 kbit/s, US$57

• 2 Mbit/s/256 kbit/s, US$69.50

• Wireless radio-based connections:

• 512/128 kbit/s, US$50.90

Note: Exchange rate used: 1 US dollar = 559.77 Chilean pesos (2005 average)

Network Speed and Quality (Stage 3)

Internet connection speeds:

(*) Out of those Internet home users who know their Internet connection speed (70%).

Download speeds in the country (as of December 2008):

• ≤160 kbit/s: 0.8% of total connections

• >160 kbit/s and ≤256 kbit/s: 1.7%

• >256 kbit/s and ≤512 kbit/s: 9.3%

• >512 kbit/s and ≤1 Mbit/s: 24.8%

• >1 Mbit/s and ≤2 Mbit/s: 41.7%

• >2 Mbit/s: 21.7%

Hardware and Software (Stage 3)

Domestic IT production is limited in the context of hardware. Most of its hardware is imported. In 2002, the total size of the computer market in Chile was US $538,000,000 of which only $105,000,000 was produced locally of which it exported $60,000. Additionally, local production usually entails assembly of imported components. About 60% of its hardware imports originate from the US . In Q209, there were signs of the contraction in the market slowing down, but H109 PC shipments were still estimated to be down by a low single-digit factor year-on-year (y-o-y). The main driver of the decline was desktop sales, which were down by around 30% in H109 as businesses deferred replacement purchases. Notebook sales continued to grow even in the difficult first quarter of the year; however, most of the growth was driven by low-cost netbooks, meaning that PC revenues contracted by more than unit shipments.

Chile is stronger in the production of software. The local firm, Sonda, is the largest software exporter in Latin America . Recently, Intel bought a stake in the company. Chile ’s software market is projected to be worth US$338mn in 2010, with high single-figure growth compared with 2009. Software CAGR for 2010-2014 is projected at around 12%. The recession led some companies to review IT budgets or look to defer systems updates, but other companies viewed software investments as a means of achieving greater efficiencies in difficult times. Piracy was estimated to account for 68% of software in 2008, up 1% on the 2007 level, despite a sustained government campaign to reduce this.

The government is making an effort at selling Chile as an outsourcing destination. This year it ranked 9th in the A.T. Kearney Offshore Location Attractiveness Index. Brazil ranked slightly higher, but the two nations were the only Latin American countries within the top ten of the index. Some influencing factors were the government's insistent pursuit of offshore opportunities, its developed infrastructure and low operating costs.

Service and Support (Stage 3)

As of late 2007, Chile has one cable ISP and half a dozen ADSL providers. Service is available in most places but given the country's geography, coverage may vary, especially in remote and rural areas. Fiber or ADSL2 service is almost nonexistent.

Providers have a choice of USB or Ethernet modems. If you have a modicum of technical knowledge it is best to have your own wired or wireless Ethernet modem/router, especially if you're using another OS than Windows XP. Most ISPs don't support Macs or Linux, if you own your modem it will make your life easier. By default you will get a dynamic IP address (via DHCP) though some sell fixed IP service too. Some providers offer so-called dual play or triple play bundles with broadband internet and/or phone service and/or TV.

Cable, an alternative infrastructure for broadband, has also developed slowly in Chile . It is not exceed 20% penetration according to the most recent information. Boardband through the wired infrastructure will reach a limit and once again the region will find itself a situation where the demand for broadband access is greater than what is available. This is in part of the reason why the wireless infrastructure grew so high so quickly and there is thus an opportunity for wireless providers to upgrade those wireless networks to provide fast speed data access.

Wireless Communicati on

In Latin America wireless connections exceed wired lines. The figure below shows that in each of these countries the wireless infrastructure dominates. In the case of Chile wire lines are almost tripled by wireless. In addition to the wired infrastructure limitations, there are also equipment limitations. The mobile phone is the most prevalent communication equipment in the region.

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