Nov 27, 2018

New report suggests Latin America will lag in internet growth

A new report from Cisco forecasts an alarmingly slow internet traffic growth rate for Latin America, especially when compared to the other lagging regions, like the Middle East and Africa.

Why it matters: Latin America's lagging internet infrastructure capacity could hamper the deployment of new digital technologies like streaming or self-driving cars.

The details: Latin America is behind its competitors in Europe, North America and Asia in offering more public wi-fi access points and home broadband access, per Cisco's latest Visual Networking Index (VNI).

  • As a result, IPv6 (the most recent version of the Internet Protocol) total internet traffic in Latin America is expected to grow slower than the compound annual growth rate (CAGR) globally.
  • And at a 63% CAGR, it is the only region that's expected to grow more slowly than the global CAGR for internet traffic, which is 77%. By comparison, the Middle East and Africa are expected to grow at a 96% CAGR. More saturated regions, like North America and Asia-Pacific, are expected to grow at a 79% CAGR.

Between the lines: When it comes to internet speed, Latin America is far behind all other regions and will continue to lag over the next five years, per the report.

  • Broadband: By 2022, the global average speed of broadband internet will be 75.4 Mbps. While Asia Pacific and North America are expected to greatly exceed the global average, with 98.8 Mbps and 94 Mbps respectively, Latin America and the Middle East are expected to clock in at 28.1 Mbps and 20 Mbps respectively.
  • Wi-fi: By 2022, the global average speed of wi-fi internet will be 54.2 Mbps. While Asia Pacific and North America are expected to greatly exceed the global average, with 63.3 Mbps and 83.8 Mbps respectively, Latin America and the Middle East are expected to clock in at 16.8 Mbps and 11.2 Mbps, respectively.

Be smart: A weak regulatory framework for increasing connectivity is likely what's to blame for this gap, according to Cisco senior director of technology and spectrum policy Mary Brown.

"If I were a regulator in Latin America, I'd be looking at this data with some degree of concern. Because Latin America is not doing what the Middle East and Africa are doing, which is using regulatory frameworks to create more internet competition."
— Brown

Bottom line: Latin American countries are far behind in creating meaningful internet accessibility policies, especially in comparison to North America, which is so far ahead that it's reaching a point of saturation.

  • "U.S. policymakers have done a much better job of getting wired networks out to U.S. households relative to almost any other economy on the planet," says Brown.

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