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Information technology booming in Chile
For a country like Chile, being in the farthest southwestern corner of Latin America and whose natural borders have encapsulated it, openness to the world has been the key to survival. Through free trade and privatization the country began setting the standards for its immersion into today’s globalization. For instance, Chile was one of the first countries to enter the privatization and deregulation processes of its telecommunications. In recent years, Chile’s telecommunication sector has seen significant investments in its 100percent digital lines, in high-frequency wireless communication and in the multi-carrier system that has filled the country’s long-distance arena with tons of competitors.
According to Paul Fontaine, Telefonica CTC Chile’s corporate development vice president, "the market in Chile is very competitive. Given this, we are investing $400 million during this year on infrastructure, including basic phone lines, mobile, long-distance. We want Chile to maintain its vanguard position in communications. Today we have one of the best networks, if not the best, in Latin America. We want a massive penetration of Internet so that Chile can become a leader in amplified telecommunications not only of voice but also data. Telefonica CTC Chile is the leading telecom company in the country with a market share of 85 percent in fixed phone lines, 40 percent in long distance and a bit more than half of the mobile phone industry.
During 1999, the mobile telephone industry grew 135 percent. Practically 86 percent of the infrastructure of mobile networks area was provided by Ericsson, whose major clients are Telefonica CTC Chile, BellSouth, Entel PCS and SmartCom, which was recently acquired by Endesa Spain and its affiliate in Chile. One of the reasons mobiles have rampantly penetrated Chile has been the "calling party pays" system. "The pre-payment of mobile services has pushed this product, accounting for a 75 percent growth. Since we began providing mobile service two years ago, Entel PCS has nearly one million clients, which is 35 percent of the market," explained Richard Buchi, general manager of Entel, which during the last two years has invested $700 million in mobile telephones and Internet. With respect to Internet service, Entel has the largest Internet service provider in Chile, with 200 thousand clients (800 thousand users) or 50 percent of the market.
Chile’s competitive information technology sector has been growing dramatically with the presence of many international firms dedicated to providing the ISP platforms, adapting the technology to the needs of each individual client and providing the solutions for the questions presented by the emerging business practices.
"Sun Microsystems is the No. 1 provider of products, technology and service for enabling the new economy. Eighty percent of the ISPs in Chile run over Sun servers and technology. To arrive at the new economy of the Internet, we work with distributors like Adexus SA and also with Oracle on systems technology," said Juan Carlos Macuada, regional director, Sun Microsystems Andes Region.
According to Carlos Busso, president and CEO of Adexus, "there are various challenges that we are facing. One is financing new projects; Chile’s financial sector is very conservative, and there is no venture capital. The way to grow is through new clients, which is an operational growth which is more expensive and difficult… Another is the need to develop national companies – 90 percent of the businesses in this field are foreign. There is a huge growth pushed by the Internet and we are providing ISPs with technology and solutions so that they have the possibility to grow." Adexus is Chile’s No. 1 system integrator, whose major areas of business are e-commerce, finance, telecommunications, government and education. Among some of the projects in this company’s portfolio are the electronic stock market and the development of the first pilot in the world of wireless application protocol technology that will provide advanced mobile applications with access to Internet content.
"Another element of the Internet trends is its sociological impact," added Fernando Prieto, general manager of Oracle. "When you have advances like the ones happening in the United States and Canada, the gap that is being produced between them and small countries like ours is very strong. Our challenge is to use the velocity and agility that being smaller provides to position ourselves. Chile is in that process. There are cultural changes that have to be implemented, such as the importance of learning English. Practically 90 percent of the information on the Web is in English." He is also the president of the Chilean Association of Information Technology Companies (ACTI), which helps the business community with respect to the different aspects of electronic business.
Compaq’s general manager, Hernan Orellana envisioned that "the Internet phenomenon is not a technological revolution, but instead a communication revolution. Therefore, its impact in society is not a consequence of the technology, but rather technology is the facilitator that will enable this revolution in people’s way of communicating. This is going to be a fundamental change that has to do with breaking away from the paradigms and establishing new forms of relationships with people. Instead of having geographical frontiers, countries will produce cultural ones."
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Table of Contents New president focuses on future while reconciling the past |
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Nowadays, the possibilities present within virtual globalization, or that which is beyond the constrictions of geography and demography, make the world seem smaller. The physical world as we know it is being transformed by an alternate manner of living - communicating, doing business, studying and socializing - conceived as the new economy. Being able to connect to Washington, D.C. through computer from one of the farthest points in the southern cone is evidence of the limitlessness provided by having the right infrastructure and the necessary tools. The fact is that Alaska is seconds away from Tierra del Fuego. Boundaries are becoming optical illusions and the infinity presented by the World Wide Web is becoming more and more the reality.
As for the government’s involvement in the sector, the recently appointed sub-secretary of Telecommunications Christian Nicolai explained: "We believe that we have a great advantage in that we have a very developed telecommunications platform, covering the whole country and with connections to the world through fiber optics and ISP webs. Our mission is to create the space where the private sector can develop the digital economy." Also, Nicolai defines as their greatest challenge the need to "detach from the traditional paradigms and understand that it is not about new technology but rather the technology that is already here. Whoever does not incorporate it to services, production of goods, distribution channels and as the device for payments and other transactions will stay outside the new economy." An important initiative by the government through the sub-secretary’s office is the Department of Universal Access.