FITEL’s telecentre experience in Peru

In Peru, approximately 20,000 Internet cabinas públicas (public Internet cafes) have emerged since 1998 in urban areas, without any support from the state, NGOs or private firms. Thanks to their presence, many from the lower-income sectors of society are benefiting from cheap and widespread access to ICT connectivity. As of 2005, more than 85 per cent of Peruvian users connect to the Internet in cabinas públicas. Despite its high levels of poverty and low levels of telephone penetration, Peru had the second highest percentage of Internet users in Latin America after Chile.

Many public and private institutions understand the fundamental importance of the cabinas públicas as providers of ICT connectivity and are implementing programmes to use them as a bridge between citizens and government or institutions. Different networks of cabinas públicas are promoting e-government activities, payment of taxes and fines, and facilitating the use of Internet by Small Medium Enterprises(SMEs). The presence of cabinas públicas is an opportunity to rapidly reach groups that were previously difficult to access.

Cabinas públicas are considered the Peruvian model of access to ICTs, a viable model for universal access in developing countries. The Peruvian model is evidence of the high demand for ICT connectivity coming from low-income groups, particularly in cities. Though they are immensely popular in Peru, there is still considerable territory to cover in the more remote, rural areas of the country.

Peru’s Fund for Investment in Telecommunications (FITEL) programme, inspired by the cabinas publicas, included in its FITEL II programme the provision of 500 public Internet access points in rural areas. It is an example of a competitively tendered telecentre initiatives being undertaken in rural areas of Peru, combining rural broadband services with rural satellite connectivity.

There is limited data available about the public use of the 500 public Internet access points in rural areas. However, FITEL’s own 2002 survey of FITEL II Internet cabinas públicas administrators found that of the 160 VSAT-based Internet cabinas públicas that responded, 22.5 per cent stated that the PC was not working. Primary issues encountered included the lack of PC and Internet availability due to rural power problems, and the lack of any discernable business model of how to run and develop the Internet cabinas públicas.

In 400 of the 514 locations (78 per cent), the VSAT-based Internet access and the PC units were powered by solar panels. The key reasons for the use of solar panels included:

  • The operator was interested in being able to rely on their own power source, as electricity in rural areas was not stable or reliable enough to guarantee availability obligations for their phones; and
  • Paying for outside electricity included not only the problem of money transfer to local electricity utilities or co-ops, but also the difficulties with village occupants who made unauthorized use of the power source.

As the power needs of PC units were relatively high, they were often only operational for a few hours per day or less. As a result, Internet access was only available in most locations for a couple of hours per day.

The Internet cabinas públicas had no apparent business model and management model in place to support the technology. While the technology was deployed for FITEL as requested, there appeared to have been little thought or planning given to how the Internet cabinas públicas would operate. Issues such as revenue sharing agreements with shop-owners, how to market services and how to train users were not developed.

Through the experience of its Internet cabinas públicas programme, FITEL understood that the rural Peruvian Internet market was not only challenging but also in its infancy, and that a considerable effort and investment was required to develop the market by finding solutions to the operational problems, developing an attractive business model for the shop owner, and providing training, education and support to both the users and the managers expected to run the Internet cabin business.

The FITEL V phase of the programme included much more local training and sensitization among the populace on the potential of the Internet, and stressed commercial viability or, at the very least, sustainability.

Sources: Intelecon Evaluation Report, commissioned by the World Bank during a project to design the next phase of FITEL; “Osiptel plans 1,000 new Internet centers”, 11 March 2005, Business News Americas; “Fitel earmarks US$15.5mn for rural broadband project”, 3 August 2005, Business News Americas; “Gilat to invest US$1.6mn in Internet project”, 19 May 2006, Business News Americas

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