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17 January, 2013

Interview with Pablo Bello Arellano, Secretary General of AHCIET

As part of its strategy to reinforce cooperation at international level with other telecoms associations, ETNO signed a strategic  cooperation agreement  with the Latin American  Association of Research Centers and Telecommunication Enterprises, AHCIET. ETNO signed similar cooperation agreements earlier on with SAMENA (South Asia, Middle East and North African Telecoms Council) and with US Telecom. To mark the start of this cooperation, Pablo Bello, Secretary General of AHCIET, gave an interview to ETNO Digital.

The development of broadband is the engine for growth, economic development and social inclusion in Latin America

Pablo Bello Arellano Seceretary General of AHCIET

 1.          The Latin-American telecoms market’s growth rates are among the highest in the world and certainly Contrast with The situation in Europe. How would you explain this situation and how do you see it in the future evolving?

Pablo Bello: Undoubtedly there are macroeconomic factors and industry factors involved. Latin America is growing, the middle class is expanding, and with it, the demand for telecommunications services. At sectoral level, many countries of the region have consolidated an important dynamic of competition and investment that is allowing bridging the coverage gaps, quickly incorporating the latest technologies and achieving higher quality and lower prices in the provision of services.

In the last 10 years, tens of billions of dollars in investments have democratized access to increasingly advanced services. For example, early in the last decade, out of 100 people only 10 to 15, on average, had access to fixed telephony, while today, Latin America is reaching a mobil penetration rate of 100%, almost the same number of mobile phones as the number of persons. Clearly there are major challenges in the field of digital connectivity, especially in rural and low-income urban sectors, but progress in the last decade has been significant.

Additionally, operators and governments have played a key role in this growth. On the one hand are the authorities, who have become aware of the importance of ICT promoting public policies and leading Digital Agendas, based on Public Private Partnership, and on the other hand, telecommunication firms are investing and competing in the markets. We have significant challenges ahead, but we remain on track in the task of achieving full integration of Latin Americans in the Information Society.

2.          Fixed broadband access is growing in Latin America and significantly in some countries coverage levels are close to European ones. However, digital divide and between countries within national markets is still a reality. What is AHCIET view on how to address this challenge?

Pablo Bello: We are convinced that the development of broadband is the engine for growth, economic development and social inclusion in Latin America. We must work to encourage and facilitate the deployment of competitive network investments and strengthen the virtuous circle of competition, coverage, quality of service and pricing. This requires the existence of an environment of trust among all stakeholders and efficient public-private partnerships.

From a viewpoint of connectivity offering, we undoubtedly experience skewed realities, both between countries and within them. We believe that 4G wireless technologies and especially the use of the 700 MHz band will be critical to ensure that the entire region is served within the next five years of a competitive broadband offering of high quality. The rapid release of the radio-electrical spectrum is critical to achieving this objective, the infrastructure can be deployed in the territory with certain facilities and certainty, and governments avoid the temptation to collect taxes through extremely costly bidding and sectoral taxes.

The fundamental key is to keep betting on investment in competitive networks. The countries that have made progress in the region the most have done it so as a result of significant investment in infrastructure on the basis of a pro-competitive environment.

But we also require more effort to achieve the creation of a digital ecosystem, based on a high quality telecommunications infrastructure, to increase the perceived value of connectivity for the families and micro and small enterprises. In short, it deals with the alignment of public and private interests to consolidate a sustainable virtuous circle.

3.          TV and online content in Latin America is booming. Is this one of the reason behind the success of fixed and mobile broadband in Latin America?

 Pablo Bello: In Latin America, perhaps because of our cultural features, social networks are very successful. An important part of Latin Americans, especially young people, are active on Facebook and Twitter, and have increasingly been turning into platforms, not only  of communication but also  of coordination and even participation.

Studies have been conducted in the regions which indicate that the main reason for Internet subscription by Latin American families has to do with supporting the educational process of their children. Secondly, to access to perform procedures with public and private entities, and facilitate communication with family and friends.

To the extent that the available bandwidth for users is being increased, multimedia services are gaining in importance, first the photos and after the video. While there is a significant demand for access to quality content, such as music and movies, the existing supply is still low and of poor quality, which is an incentive to piracy. While there is a broader choice of more and better-quality multimedia content over the Internet will certainly become an important part of the value proposition for connectivity, at the same time that bandwidth capacity is increased at homes.

4.          Attempts Were made in some Latin American Countries to change liability of Internet service providers, Affecting Consumer Protection. What is AHCIET view?

 We believe that ISPs cannot assume control responsibilities that are not theirs, which would mean interfering with aspects of content, which would go against the principles of network neutrality.

5.          Several Countries often claim that the Internet Governance model needs to be changed, to give a voice to all parts of the world. What is AHCIET vision for the Internet Governance?

Pablo Bello: “What is not broken, don't fix." Internet works well globally. It is essential that the Internet remains an area of freedom, in which the contents are not controlled by governments, corporations or entities, beyond logic protection of minors and to combat unlawful issues that must be addressed globally. Internet requires flexibility and adaptation to technological change.

The current governance model could be definitely improved in order to avoid the dominance of one country over the other. However, I do not think that the solution is by giving more authority to governments to regulate the network and its contents.

It is definitely a sensitive and complex issue, involving not only governmental bodies but it also includes topics such as network security, networking, intellectual property rights, consumer protection, data or multilingualism in the Internet and the use and abuse of the Internet.

To AHCIET is important to  develop  high-level general principles aimed at creating a political and strategic environment that facilitates the development of ICT , as well as,  a sufficiently flexible environment suitable for investment and innovation, for the introduction technologies and revolutionary new services.

6.       Latin America is often looking at the EU telecoms legislation as a model for the legislation of its markets. How do you view the recent announcement by Vice President on a New Regulatory Approach?

Pablo Bello: The Latin American reality is very different from the European one. The traditional wired line penetration rate is less than 20% on average and will not grow more. Some countries have tried to imitate some European policies with little success, specifically for trying to do a copy & paste process of possibly valid instruments for other realities.

Latin America needs to invest in networks and competition. Not “to disaggregate networks", regular resales or other interventions that tend to discourage investment. I would say that in the past the influence of European regulators has not been positive for our region.

In that regard, we appreciate the renewed vision that Ms Kroes is giving to the European telecommunications policy, especially with regard to giving price signals that are consistent with the investment. In particular we welcome the new list of priorities announced on 18 December.

In this new approach we value highly the creation of a new and stable regulatory environment for broadband, and the adoption of new guidelines on the use of public funds for the deployment of broadband ISPs super-fast services.

We also believe that it is positive the acceleration of the deployment of digital services at justice, health, and cultural platforms, identification and electronic signatures, which will help to increase the value and demand for ICT services.

7.    Europe has set ambitious targets for high speed broadband deployment, does AHCIET push for similar targets?

  Pablo Bello: Latin America, unfortunately, has no single regional policy. Each country has its own reality, its own policies. From AHCIET we are working with many governments in promoting broadband plans that go in the direction of encouraging investment, infrastructure-based competition and the development of the digital ecosystem in the region.

We try to share good practices among countries in the region and support with studies the work of governments and sometimes express our views on what we believe are the downsides. It is essential for AHCIET to engage into a constructive and positive dialogue with all Governments to progress in bridging the digital gap. Our mission is to become strategic partners of governments to achieve shared goals.

Our work priorities are to facilitate the conditions for the deployment of infrastructure, regulatory frameworks that facilitate and promote convergence, that governments offer wider radio-electrical spectrum, and tax structures are appropriate to encourage the development of the sector, taking into account positive externalities occurring in the telecommunications scenario.

8.      What is the right mix to Encourage investment in high speed networks?

Pablo Bello: We believe it is necessary to create a conducive framework for firms to carry out their investments. In that sense, we believe it is necessary to combine a pro competition scenario, regulatory measures that encourage investment. A favorable regulatory framework in which investment and infrastructure prevail between competition and service competition. Another aspect that affects a lot in it, is fiscal policy, we believe that countries with reasonable tax schemes, not excessive ones, helps to encourage investment and as a result ensures achievement of higher speed levels. For example, the case of Chile is very significant: it is the country with the lowest level of corporate tax, which has undoubtedly helped it turn the country that leads the regional ranking of the per capita investment in telecommunications. As a result of these investments, Chile has achieved the highest broadband speed among the countries analyzed in the study.

For the development of this propitious framework, instances of public-private partnerships are very important and have a huge potential, particularly because of its converging public and private interests in the ICT sector.