ICT´s: THE GREAT OPPORTUNITY
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ICT´s: THE GREAT OPPORTUNITY Towards an economic and social growth sustainability in Latin America Miguel de la Rosa. Deputy General Director Institutional Strategy Latin America. Telefónica S.A. Diego Molano. Deputy General Director Corporate Affairs Latin America. Telefónica S.A. WSIS UIT-UNDP: “ WSIS ACTION LINE C6: FACILITATION PROCESS: ENABLING ENVIRONMENT DRIVING INNOVATION: BEST PRACTICES” Geneve, May 20, 2008 TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas Index 01 Latin America: Much more than a promise: A reality 02 Telefónica: Key Player in Latin America 03 ICT´s: The Great Opportunity TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 2 01 Latin America is going through an outstanding economic transformation … GDP per capita Growth. Base 100 Highest Highest GDP GDP per per capita capita growth growth since since the the 70´s 70´s TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 3 01 … with a dramatic social improvement…. Wealth Distribution Change in Latin America. 2002-2006 (GDP per capita ) -51 million people 216 165 +52 millon people 160 108 Less than 2000$ 123 101 2000$ - 5000$ 2002 2006 Note: 2006 constant US$ TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas +22 million people 4 More than 5000$ 01… based upon a stable macroecomic panorama… 01 … well perceived by the financial community…. a process in which the Information and Communication 01 …in Technologies have been, are and will be crucial for the economic growth .. Growth Competitiveness Index Exists a positive correlation between Economic Growth and ICT´s Penetration Latin America Countries 6,5 6 5,5 El Salvador 5 Colombia Panamá 4,5 Japón Chile Reino Unido Alemania Corea Irlanda Francia 3,5 Finlandia Suecia EE.UU. R2=0,93 Costa Rica 4 México Brasil Argentina China 3 2,5 2 2 2,5 3 3,5 4 4,5 Network Readiness Index 5 UNO incudes ICT´s access as part of the “Millennium Objectives” 5,5 6 “To “To ensure ensure that that the the benefits benefits of of new new technologies, technologies, especially especially information information and and communication communication technologies, technologies, in in conformity with conformity with recommendations recommendations contained contained in in the the ECOSOC ECOSOC 2000 2000 Ministerial Ministerial Declaration, Declaration, are are available to all” available to all” Fuente: The Global Information Technology Report 2006- 2007 & The Global Competitiveness Report 2006-2007. World Economic Forum 01 … as a result, Latin America has turned into the fastest growing telecom region in the world… (millions) CAGR 2002-07 Mobile Telephony acceses 30% Latin America 12% North America 98 361 153 270 Broad Band Acceses (thousands) CAGR 2002-07 1.414 68% Latin America 28% North America 19.134 21.252 74.314 Internet Users (millions) CAGR 2002-07 23% 6% Latin America North America 44 126 174 237 TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 2001 2007e Sources: ITU, IDATE, Internet Worldstats, Wireless Intelligence Index 01 Latin America: Much more than a promise: A reality 02 Telefónica: Key Player in Latin America 03 ICT´s: The Great Opportunity 9 02 Telefónica is one of the largest integrated telecom’s operators in the world… And, in Latin America… Market Cap Acceses Latam (Dic’07) 134,1 Mill. / 13 countries #4 Revenues 2007: 31 Bn US$ OIBDA 2007 11 Bn US$ CAPEX 2007 5 Bn US$ 02 Telefónica has been committed to Latin America for the last 17 years… INVESTMENT Latam 1990-2007: avg ≈ 1,5% GDP´s >80.000 Mill. € DIRECT EMPLOYMENT GENERATION: >145.000 Jobs INDIRECT EMPLOYMENT GENERATION: > 120.000 Jobs * Inversiones a precios de mercado en el momento de la compra TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 8.000 local suppliers 02 … deploying the neccesary infrastructure for regional development… Telefónica: The biggest international network in America Interconnecting LatinAmerican countries and expanding them to the world Next investments 2007-2010E +45.000 km fiber Interconnection with 230 countries TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 14-16.000 Mill € bringing telecommunications to every socioeconomic 02 …segment… Telephony Penetration ~10% 90 Segment A 107 20-30% 20 Segments B-C Segments D-E 90 60-70% 2 45 Early 90’s 2005 Population % By early 90´s when Telefónica started operations in the Region most population in D/E segments were excluded from access to telecommunications TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 02 … bridging the social gap in the region.. Geographic Geographic Inclusion Inclusion Mobile population coverage Uruguay Chile Argentina Ecuador Perú Colombia Venezuela Guatemala El Salvador Nicaragua Panamá México Brasil 0% 50% 100% Social Social Inclusion Inclusion Educational Internet. Chile Digital Digital Inclusion Inclusion Llaqt@red. Perú > 59% coverage of schools (Dec 07) Broadband access to schools TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas Creative and innovative solution por sustained Internet Access in Peruvian rural areas. Campus Party. Brasil and Colombia Worlwide event integrating technology, content, and digital entertainment. fostering the educational use of ICT´s within the educational 02 …community Educared: Leader in Educational Innovation Gathering point for the educational community +35 million participants Educational Portal www.educared.net 400.000 training hours 2007 + 60.000.000 visits + 50.000 trained teachers EducaRed is a programme promoted by Fundación Telefónica pursuing innovation and excellence in educational processes, in a equal opportunities approach by means of utilization of ICT´s TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 02 … and a transparent and firm commitment to promote schooling as a means to eradicate child labor: The programme Proniño INTERVENTION AXIS Integral Integral Protection Protection Educational Educational quality quality Alliances Alliances and and networking networking 1.429 Educational Centers + 50.000 Child children in school in 2007 Family Goal 2008: 100.000 children School Community 12.000 Volunteers 13 Countries Alliances with 93 NGO´s Fundación Telefónica constitutes the corporate initiative with utmost social impact using schooling and digital inclusion in Latin America TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas Index 01 Latin America: Much more than a promise: A reality 02 Telefónica: Key Player in Latin America 03 ICT´s: The Great Opportunity 17 03 Latin America is to be the Region with the highest relative growth till 2010 TELECOM SECTOR GROWTH TELECOMMUNICATIONS IN LATIN AMERICA CAGR 06-10E Latin America 7,8 % Emergent Asia * 7,1% Central and East Europe 6,9% Total Acceses* (Millions) CAGR 0610E 11% 5,8% EE.UU and Cánada 1,2% Source: IDC * Excluding Japan, Corea, Hong Kong, Singapoore and Taiwán TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas >220 >220 Millions Millions Additional Additional Acceses Acceses 420 2006 *Fuente: Pyramid Africa 641 2010E 03 Latin America: with an astonishing Mobile penetration Mobile penetration1 Dic - 071 Dic - 071 65,6% 64% 71,5% 97% 76% El Salvador 90% 70% Guatemala 48% 46,6 % Nicaragua 72% Panamá Dic – 11 E2 >100% 75% Ecuador 85% 1 Source: The Yankee Group + Telefonica 1 Source: The Yankee Group + Telefónica By year end 2011 87% of Latin America population will dwell in countries with a mobile penetration > 85% >85% TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 2 Source: Telefónica 03 Latin America: Broadband penetration perspectives... Argentina Mexico Brazil Venezuela Colombia Chile Region ≈ 7,5% penetration 2010 16% 12% 10% 8% 6% 4% 2% Wireline 2011 2010 2009 3G networks service penetration (2003-2011) Latin American Markets Source: Pyramid Research July 2007 TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 2008 2007 2006 2005 -2% 2004 0% 2003 Penetration of the Population (%) 14% envisions an interconnected Region with an ICT´s 03 …Telefónica Aumento progressive intensive use, to foster bridging the social divide and promoting economic development productividad en las PYMES Progressive Capillarity Telemedicine Telemedicine Customized Customized PYME´s PYME´s Solutions Solutions ICT´s ICT´s proficient proficient utilization utilization in in schooling schooling Digital Digital Cities Cities Enhanced Enhanced security security Mobile Mobile Banking Banking E-government E-government Distance Distance Learning Learning TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 03 The Region is aware of the need to articulate public policies to close the digital divide Several Institutions are promoting ICT´s policies at all levels Illustrative purposes only IDB Programs to strenghten ICT´s use in public administrations e-Government eLAC 2010 the benefits of TIC´s deployment requires a joint 03 Maximizing and continuos effort among the various social and political players We We consider consider the the ICT´s ICT´s an an engine engine of of progress progress and and welfare welfare through through their their to the economic growth contribution and contribution to the economic growth and to to the the social social and and territorial territorial integration integration process. process. COMMITMENT FIRM DECISSIONS FOLLOW UP TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas Intensive Investment Goals Macroeconomic Stability and sustained growth Initiatives Metrics Clear rules and legal framework compliance 03 ITC´s in Latin America represent a history of success Yet, Much remains to be done A joint effort, a convergence of the private and public sector is unavoidable to maximize the ICT´s economic and social impact and to enable a truly developed Information Society This is an endeavour no player can be left aside TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas THANK YOU TELEFÓNICA S.A. Dirección General de Relaciones Institucionales y Corporativas 25
