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Internet or television?

Charles Herington is president and CEO of AOL Latin America. The following article is adapted from remarks he made at a seminar on development and the Internet held during the Bank’s annual meeting in Santiago, Chile, last March.

In recent years, Latin America has become the region posting the highest growth in interactive services in the world. In fact, from a strictly commercial point of view, it is an ideal market for achieving strong and continuous growth.

Consider some of the region’s characteristics. It is home to 500 million people who speak mainly Spanish or Portuguese. Of this number, approximately 150 million are middle and upper class consumers. Although there are vast differences from one country to the next, in general the region’s telecommunications systems are developing in favorable regulatory environments. Despite temporary fluctuations in national economies, conditions tend to be improving in the key markets.

These conditions allow us to make some optimistic projections. By the end of 2003, the number of Internet users in Latin America will have tripled to 42 million, for a 67 percent annual growth rate. The region’s Internet penetration rate is expected to reach 8 percent of the population by then. While this will be a significant increase over current levels, Internet penetration in Latin America will still be well below the level in the United States, where one half of the population already has Internet access.

Nevertheless, it is safe to say that a growing percentage of Latin Americans are using the Internet. It is no longer a technology exclusively for experts. In 1996, Argentina had 4,500 Internet users. Now there are more than 2 million.

Today the challenge is to make people’s Internet experience simple, easy and effective. It is not the technology that matters, but rather the consumer. In order to truly become a mass medium, we must focus on consumer needs. Technology is only a tool for satisfying these needs.

Like disposable diapers and microwave ovens before it, the Internet is changing from being a mere convenience to a necessity of modern life. One recent survey asked: if you were shipwrecked on a desert island, what would you prefer–a telephone, a television set or a computer with Internet access? Most people chose the Internet connection. Other surveys have found that more than half of the respondents have rearranged furniture in their homes to make room for a computer. Three out of four think that their e-mail address is better known than their telephone number. Almost four out of every five take time that they used to spend watching television to surf the web.

Beyond its obvious commercial and social applications, the Internet is going to have a very positive impact on Latin American society. In addition to reducing distances, it will have a significant influence on education and on other areas such as telemedicine.

We think that information access is going to be the key to bridging Latin America’s economic gap. But for the Internet to achieve its potential, we have to assume some very important responsibilities. The first is to ensure that no one imposes regulations or obstacles of any other kind on Internet use, so that this industry can continue to grow. And second, we must remember that the Internet is a very powerful tool, and seek ways in which it can benefit society as a whole.

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