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Digital infrastructure investment, connectivity
Investment, coverage and quality of digital infrastructures in Latin America
Panel A: CAF digital infrastructure index by region. OECD
80
60
40
20
0
2004 OCDE 2005 2006
Western Europe 2007 2008 2009
Africa 2010 2011 2012 2013 2014
2015 North America 2016 2017 2018
2019 World Latin America and the Caribbean Asia and Pacific
Panel B: Comparison of LAC vs. OECD by area
80
60
40
20 55,7
29,0 50,1
13,7 73,8
58,4 43,1
15,0
0 INDEX Investment Coverage Quality of service
Note: The digital infrastructure index is calculated on three components: investment, coverage and quality of service. The investment includes telecommunications capital expenditures per capita (USD smoothed over 5 years) according to ITU, and investment in big data, data centers, the cloud, the IoT; coverage includes fixed and mobile networks, and quality includes network speed and development of critical infrastructure such as IXPs and secure servers. Source: Ecosystem and Digital Economy Observatory (2020).
For CAF, “digital infrastructures must have sufficient capacity to reach the entire population at affordable prices, with sufficient capacity and quality. The percentage of households connected to fiber optics in Latin America and the Caribbean in 2019 was estimated at 12.4%, well below the average for Spain (54.3%) or the OECD (34.0%).”
According to the report “Technological Revolution and Social Inclusion” presented by the United Nations and ECLAC, the challenge is to reach 31% of the population that is excluded from information and knowledge services. To which they propose that: “the policies to be developed in this area include the development of universal broadband, with a prospective focus on ultrafast broadband (accesses of more than 30 Mbps)”.
Notes: The digital infrastructure index is calculated on three components: investment, coverage and quality of service.
The primary objective for the commission is to provide greater coverage, capacity and quality by improving backbone, access and international connectivity infrastructures. Funding for the deployment of these infrastructures can be provided in various ways, depending on their specific nature: multilateral financing of public initiative projects;
Indices of investment in advanced digital technologies
147,3
50,1% 13,7%
Investment in digital infrastructure (index) 35,1
5,6% 3,6% 5,6% 1,9% 4,4% 1,4% 2,8% 1,0%
Investment in telecommunications (USD per capita at current prices, average 5 years) Investment in big data (index) Cloud investment (index) Investing in the cloud (Index) investment in idC (index)
Source: CAF (forthcoming) with data from Huawei - Oxford Economics, UTI (2021) and GSMA Intelligence.
provision of public funds, either through subsidies or financing, or through public-private partnerships (PPPs); and promotion of private investment.
It is therefore critical to promote the development of connectivity at various levels, since countries must improve national, interregional and international connectivity infrastructure, as well as expand access networks to provide greater capillarity to telecommunications services.
Economic sources emphasize the need to promote the adaptation of regulations to prioritize ICT infrastructure in urban planning, so that it has the same priority as other infrastructure (sanitation, water and energy).
ECLAC estimates that in Latin America, Internet of Things connections for individuals will represent 56% of connections by 2025, while IoT connections will triple by that year. Emerging digital services that may be adopted by economic sectors are demanding in terms of speed and latency (for solutions based on real-time connections between devices, IoT or drones, the latency factor is critical).
The deployment of 5G networks is expected to ensure high quality for solutions based on this type of technology, allowing latencies of 10 milliseconds.
