Digital-Context-Argentina.Pdf

Digital context: Argentina

NOVEMBER 2016

Digital Context: Argentina

Digital context: Argentina

Outline

• Overview

1 Digital scenario

2 Demand side

3 Supply side

4 Regulation side

Digital context: Argentina

Overview

• Argentina has room for improving in terms of the Digitization Index, particularly ICT regulation and Internet use in enterprises • Argentina’s Internet use is close to that of developed countries, with a high frequency of use

• The prices of one minute call and fixed broadband monthly subscription in Argentina are higher than in developed countries

• Home is the main place for Internet access

• Cost is the main barrier for Internet access at home

• The use of e-banking and e-commerce is fairly widespread in Argentina.

In both cases, it stands above 20% in 2014 • 67.3% of Argentina's population has a mobile-broadband subscription in 2015

• Argentina shows a high piracy rates and a low efficiency of the legal system • Argentina needs to improve in terms of the ease of doing business ranking and entrepreneurship

Digital context: Argentina

Digital scenario: 1 Digitization Index

Digital context: Argentina

1.1. Structural Digitization Index, 2015

1 0.9 0.8 United States 0.7 0.6 Chile Mexico 0.5 Colombia

0.4 Argentina Peru 0.3 0.2 0.1 0

Algeria Vietnam Morocco China Hungary Ireland Germany Sweden Qatar Peru Thailand Saudi Arabia Turkey Chile Malaysia Netherlands Nigeria Argentina Mexico Croatia Romania United Arab Emirates Denmark Finland Pakistan Egypt Sri Lanka Colombia Uruguay Belgium Latvia Lithuania Bangladesh Ukraine Italy Slovenia Luxembourg Spain Canada Korea, Rep. Paraguay Greece Poland Kazakhstan Brazil Singapore Australia Japan India Philippines Bulgaria Russian Federation Czech Rep. Austria France Estonia Venezuela Indonesia Cyprus Slovak Republic South Africa Portugal United States Hong Kong SAR United Kingdom

The index is made up of indicators related to the level of infrastructure, ICT adoption and usage, costs and regulation conditions 5

Digital context: Argentina

1.2. Digitization Index 2015: Dimensions

Affordability ICT Regulation Infrastructure 1 1 1 GBR URY 0.9 GBR 0.9 0.9 ARG USA OCDE 0.8 USA 0.8 0.8 CHL PER 0.7 OCDE 0.7 0.7 CHL 0.6 0.6 GBR 0.6 MEX 0.5 0.5 0.5 URY USA 0.4 0.4 0.4 PER 0.3 0.3 0.3 ARG PER URY MEX OCDE 0.2 0.2 ARG 0.2 0.1 0.1 0.1 0 0 0

Individual use Enterprise use Content 1 1 1 URY GBR 0.9 GBR 0.9 0.9 0.8 GBR 0.8 URY CHL USA 0.8 USACHL ARG 0.7 OCDE 0.7 OCDE 0.7 MEX USA PER 0.6 0.6 0.6 OCDE ARG 0.5 MEX 0.5 ARG PER 0.5 PER MEX 0.4 0.4 0.4 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0 0 0

Nota: Regarding the infrastructure indicator, if more Internet related variables such as 3G coverage or secure Internet servers are considered, Argentina’s position both improves and overpasses that of countries like Mexico or Peru. 6

Digital context: Argentina

2 Demand side

Digital context: Argentina

2.1. Computer and Internet: access at home and usage

ICT access and Internet use Frequency of Internet use

100 100%

90 90% 80% 80 70% 70 Increasing 60% (%) 60 frequency 50% of Internet 50 40% use 40 30% 30 20%

20 10% 0% 10 2011 2014

0 Daily internet use Weekly internet use Internet access Computer Mobile access Internet use access Monthly internet use Lower frequency of use

2011 2015

Significant increase in Internet access and Internet use between 2011 and 2015

Note: use of Internet over the last 3 months 8

Digital context: Argentina

2.2. Internet use: evolution by geographies

70 MEAN 2014

Internet Internet users(%) 30

0 Patagonia Pampa Buenos Aires Litoral Cuyo Noroeste

Digital context: Argentina

2.3. Internet access: barriers

Barrriers in households Barriers for non-Internet users Cost is the 60 most 60 important barrier to 50 establish an 50 Internet 40 connection

30 (%) (%) 30

20 20

10 10 0 Too Lack of Lack of Without Others Mobile 0 expensive necessity skills coverage internet Lack of Lack of skills Without Others access necessity access

2011 2011 % Households without Internet access in 2011 % Non-Internet users in 2011

Cost is the main barrier to Internet access at home

Digital context: Argentina

2.4. Places for Internet access (last 3 months)

(%) 40

0 Home Work Private centre Education centre Others Mobile internet Public centre

2011 Internet use in 2011: Internet use in 2015: 54.4% +11.7 p.p. 66.1%

Home and work are the main places used to access Internet

Note: options are not exclusive, individuals can select more than one place. 11

Digital context: Argentina

2.5. Internet activities: usage over last 3 months

Most 50 popular 40 100 activities x 5.21 x 1.54 90 30

80 20

70 10

0 E-commerce E-banking

(%) 50 2011 2014 40

0 Social Communication Health and Information E-government Job search E-commerce E-banking Education networks medicine 2014

Using social networks is the most popular activity among Internet users

Note: options are not exclusive, individuals can select more than one activity simultaneously. 12

Digital context: Argentina

2.6. Smartphones: evolution by geography

45 MEAN 2014 40

(%) 25

0 Patagonia Buenos Aires Litoral Cuyo Pampa Noroeste

2014

Digital context: Argentina

2.7. E-banking: evolution by geography

30 (%) 25 MEAN 2014

0 Patagonia Buenos Aires Litoral Cuyo Pampa Noroeste

2014

Digital context: Argentina

2.8. E-commerce: evolution by geography

30 MEAN 2014

(%) 20

0 Patagonia Buenos Aires Litoral Cuyo Pampa Noroeste

2014

Digital context: Argentina

2.9. Geographical distribution in 2014: usage over the last 3 months

Internet Smartphone E-banking E-commerce

High Medium Low 16

Digital context: Argentina

2.10. Population characteristics: Internet and smartphone use (%)

Smartphone Internet use

DENSITY 23 Rural 23 22 Urban 22 21 Quintile 5 21 20 Quintile 4 20 INCOME 19 Quintile 3 19 18 Quintile 2 18 17 Quintile 1 17 16 Terciary 16 15 Secondary 15 EDUCATION 14 Primary 14 13 No studies 13 12 Housewife 12 11 Retiree 11 LABOUR 10 Student 10 SITUATION 9 Unemployed 9 8 Employed 8 7 + 65 7 6 45-64 6 AGE 5 34-44 5 4 25-34 4 3 18-24 3 2 Female 2 GENDER 1 Male 1

100 80 60 40 20 0 0 20 40 60 80 100

Note: Internet use and smartphone ownership data are from 2014 17

Digital context: Argentina

2.11. Population characteristics: users of e-banking and e-commerce (%)

E-banking E-commerce

50 40 30 20 10 0 0 10 20 30 40 50

Note: E-banking and E-commerce data are from 2014 18

Digital context: Argentina

3 Supply side

Digital context: Argentina

3.1. Mobile situation

Mobile-cellular telephone subscriptions Domestic mobile-telephone traffic (per 100 inhabitants) (billions of minutes) 180 143.90 120 160 100 140 Argentina 120 80 Spain 100 107.90 60 80 60 40 40 20 20 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Mobile population Coverage Tariffs: Mobile-cellular prepaid-1 min call (USD) 0.41 0.11 1.00 Argentina Argentina, 2015 Spain, 2015 98% 0.80 0.60 Spain 0.40 2013 99.8% 0.20 0.00 2008 2009 2010 2011 2012 2013 2014 2015

On-net Argentina Off-net Argentina On-net Spain Off-net Spain 20

Digital context: Argentina

3.2. Fixed broadband

Fixed broadband speed (in Mbit/s) 2%15% 15 % 4 Fixed broadband monthly 39%39% subscription charge 3 28% Argentina 28 41.16 USD2015 2 57% % 1 Mbit/s 2014 1 59%59%57 % 50 0 2008 2009 2010 2011 2012 2013 2014 2015 40 30 Spain Argentina 20 CableCable modemmódem DSLDSL FibreFibra 10 Fixed broadband subscriptions (per 100 inhabitants) 0 2008 2009 2010 2011 2012 2013 2014 2015 X 1.23 30 5% 5% Spain Argentina 13% 17% 25 18% 18 % 20 X 1.61 15 Spain Fixed broadband monthly subscription charge 10 2014 26.7 USD2015 5 0 77 77%70% Argentina Spain % 2010 2015 2010 2015 Argentina Spain 21

Digital context: Argentina

3.3. Wireless broadband

Mobile-broadband subscriptions (%) Total wireless broadband subscriptions (%)

90 80 X 3.4 X 2.8 80 70 X 13.267.2% 70 60 60 46.0% 50 50 10.1% 40 X 6.4 40 13.9% 82.0% 67.1% 67.3% 30 30

20 20 32.2% 24.0% 10 23.8% 10

5.0% 5.0% 0 0 2010 Spain 2015 2010Argentina 2015 2010 Spain 2013 2010Argentina 2013

Spain Argentina Spain Argentina

Note 1: The numbers inside the bars show number of subscriptions per 100 inhabitants 22 Note 2: The total wireless broadband subscriptions indicator is composed of satellite, terrestrial fixed wireless and mobile broadband subscriptions Digital context: Argentina

3.4. Annual investment in telecommunication services

Annual investment in telecommunication services (millions of USD, % GDP)

0.6

X 1.17 0.5 X 1.24

0.4

0.3

2641 6323 1813 0.2 5269

0.1

0 Spain Argentina 2010 2014 2010 2014

España Argentina

Note: Values inside bars represent total investment in millions of USD 23

Digital context: Argentina

4 Regulation side

Digital context: Argentina

4.1. ICT laws: Efficiency and Piracy

6 100

7 7 -

, 1 , FIN 90 VEN

regs GBR 5 DEU 80 USA SGP CHN URY FRA 70 URY 4 ARG IND CHL PER

CHN TUR ) DNK 60 TUR IND CHL

best MEX MEX ( ESP COL 3 BRA COL 50 BRA PER ITA ESP 40 ITA 2 FRA ARG 30 SGP DEU NOR GBR VEN 20 FIN LUX 1

Efficiency oflegalsystem challengingin USA Software piracy Software piracy rate, % software installed 10

0 0 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7 Laws relating to ICT, 1-7 (best) Laws relating to ICT, 1-7 (best)

High income OECD countries Rest (Argentina is highlighted in green)

Source : BBVA Research & World Economic Forum Source: BBVA Research & World Economic Forum 25

Digital context: Argentina

4.2. Ease of doing business & entrepreneurship

200 Australia United Kingdom 180

Chile

160 Uruguay Spain 140 Brasil IND Peru 120 ARG Korea, Rep BRA Colombia 100 Germany URY Canada 80 MLT Turkey TUR Costa Rica 60 COL PER Jamaica Ease Ease ofdoing business Ranking ITA CHL Mexico 40 MEX ESP Austria 20 FRA Bolivia DEU NOR Guatemala FIN AUS KOR SWE SGP GBR 0 DNK El Salvador 0 5 10 15 20 Argentina No. new firms per 1,000 workers 0 2 4 6 8 10 12 14 16 No. new firms per 1,000 workers

High income OECD countries Rest (Argentina is highlighted in green)

Source: BBVA Research & World Economic Forum Source: Doing Business (World Bank Group) 26

Digital context: Argentina

4.3. Political and regulatory environment

WeakWeak MediumMedium HighHigh NoNo data data

The political and regulatory environment of Argentina is below the global Median 3.7 median Argentina 2.8

Source: BBVA Research & World Economic Forum, 2015 Note: In order to measure the political and regulatory environment, indicators such as ICT-related laws, piracy rates, 27 efficiency of legal system and protection of intellectual property are taken into account.

Digital context: Argentina

5 Appendices

Digital context: Argentina

Composition of the Digitization Index

Infrastructure  Fixed (wired)-broadband speed, in Mbit/s.  Monthly subscription charge for fixed (wired) Infrastructure  International Internet bandwidth. It is measured in CostCost broadband Internet service (PPP $). Fixed (wired) bits per second per Internet users. broadband is considered to be any dedicated  Percentage of total population covered by a mobile connection to the Internet at downstream speeds network signal. equal to, or greater than, 256 kilobits per second,  International Internet bandwidth in megabits per using DSL. second (Mbit/s).

 Active mobile-broadband subscriptions. Users  How developed are your country’s laws relating to  Fixed (wired)-broadband subscriptions. Regulation Usersadoption the use of ICT (e.g., electronic commerce, digital  Mobile telephone subscriptions Regulation signatures, consumer protection)? adoption  Percentage of households with Internet access at home. [1 = not developed at all; 7 = extremely well-  Proportion of individuals that have used the Internet in developed] the last 12 months.  how widely used are virtual social networks in the country.

 What extent do businesses use ICT for transactions  The Government Online Service Index assesses Firms with other businesses in the country? Content the quality of governments’ delivery of online adoption  What extent do businesses use the Internet for selling services on a 0-to-1 (best) scale. There are four Firms their goods and services to consumers in the country? stages of service delivery: Emerging, Enhanced, Content adoption  What extent do businesses adopt new technology in Transactional and Connected. In each country, the the country? performance of the government in each of the four stages is measured as the number of services [1 = not at all; 7 = to a great extent] provided as a percentage of the maximum services in the corresponding stage.

Digital context: Argentina

Source of data from the Demand Side:

Survey conducted by the National Institute of Statistics and Census of Argentina Republic (INDEC) for years 2011 and 2015. This is a special study for households and individuals on the Use of Information Technology and Communications (ENTIC) in Argentina.

In addition, we used additional information from another survey conducted worldwide by the Pew Research Center about trends and technological dynamism in several countries (Spring 2013-2014 Survey).

Digital context: Argentina

Source of data from the Supply Side: World Telecommunication/ICT Indicators database (ITU, 2016)

The World Telecommunication/ICT Indicators database contains time series data for the years 1960, 1965, 1970 and annually from 1975 to 2015. These data are available for over 200 economies, however the availability of data for the different indicators and years can vary

The data are collected from an annual questionnaire sent to official economy contacts, usually the regulatory authority or the ministry in charge of telecommunication and ICT. Additional data are obtained from reports provided by telecommunication ministries, regulators and operators and from ITU staff reports

Digital context: Argentina

Financial Inclusion Argentina

David Tuesta Gloria Sorensen Lead Economist Chief Economist

Mauro N. Acuña Marcos Dal Bianco Víctor Adame María Celeste González Javier Alonso Adriana Haring Alfonso Arellano Jorge Alberto Lamela Noelia Cámara Juan Manuel Manías Rosa Mª Oliveros Lucía Pacheco

32 For further information, please contact [email protected] or [email protected]