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Vive Digital - OECD Keynote
Our responsibility as an industry is to expand Internet usage
in order to reduce poverty

Poverty rate (< US 1,25 (PPP), 2005

Relationship between poverty and Internet users
100
90

More

80

Internet

70
60

Less
Poverty

50
40
30
20
10
0

20

40

Internet user x 100 inhabitants 2009

SOURCE: UNCTAD, Information Economy Report 2010

60
The technology Development creates Jobs directly and indirectly .
Multiplier Effect
Filipinas
Jobs

Multiplier Effect
India
3,0

Jobs

Multiplier Effect
Colombia - Manizales

3,6

Rate
Unemployment

X3,6
X2

1,0

Technology
Jobs

2,0

Economic
Jobs

17%

1,0

Technology
Jobs

Economic
Jobs

SOURCE: Raul Katz, Universidad de Columbia, 2010, UNCTAD Information Economy Report 2010, NASSCOM

10%

8.500 Employee Payroll
10.000 Jobs directly
And ICT has a great impact on productivity and competitiveness

Global Competitiveness Index 2013 - 2014

5.8
5.6
5.4

Germany
Japan

5.2
5.0

Malasia

4.8

Vietnam
México
Perú

4.4
4.2
4.0

Corea

Israel

Chile
Spain

Brasil

4.6

Singapore
USA

“An increase of 10
percentage points in
broadband penetration
accelerates economic
growth by 1,4%”World
Bank, 2010

Colombia

3.8
3.6
3.4
3.2
3.0
2.8
2.6
2.4

2.6

2.8

3.0

3.2 3.4

3.6

3.8

4.0

4.2 4.4

4.6

4.8

5.0

Network Readiness Index 2013

SOURCE: World Bank 2010; World Economic Forum, The Global Information Technology Report 2010

5.2 5.4

5.6

5.8
In households the opportunity is concentrated on social strata
levels 1, 2, and 3
Internet penetration by strata
Income x
Household Penetration (%)
Household
Internet (%)
PC (%)
Monthly income USD

Population
Million

Stratum (1)

5-6

2

5%

>3.300

4

3

7%

1.170 - 3.300

3

10

2
1

22%

56

70

26

660 - 1.170

47

17 39%

330 - 660

8

20

12 27%

<330

2

5

50
(1) Based on electrical service coverage
SOURCE: SUI, DANE

92

83

50
In social strata levels 1 and 2 the main barriers are the high
costs, the lack of a computer and the lack of training
Why don't you have Internet at home?
% Surveyed

39,9

Do not have money for it

33,8

There is no Computer at home

21,4

Prices are too high
Do not need it

8,6

Do not know how to use Internet
Internet cafe is less expensive (cheaper)

2,3

Never been offered the product

2,3

Do not want unnecessary debts

2,1

SOURCE: Market research of 2300 people of social stratum levels 1 and 2 in 43 municipalities, 2010

20,2
In businesses, the opportunity is focused in the micro companies

Company Type

Companies

(Number of Employees)

(%)

Large
(+200)

Businesses Penetration (%)
Internet (%)

PC (%)

0,1%

100

100

Medium
(51-200)

0,5%

99

100

Small
(11-50)

3%

Micro
(1-10)

96,4%

79
7
50

It is estimated that there are more than 1,600,000 companies in the countrySOURCE: SUI, DANE

96
13
50
In small businesses the main barrier is the lack of perceived need
Why don’t you have Internet in your business?
% Surveyed

60,6

It is not necessary for the business

17,6

I don’t have a computer
Cannot afford the costs
Prices are too high
Do not know how to use the service

12,9
9,3
6,5

SOURCE: Market Research of 1500 micro and small enterprises in 43 municipalities 2010
To overcome these barriers... We are executing the Vive Digital Plan

That seeks to promote the massive use of the Internet to leapfrog

PROSPERITY FOR ALL
Vive Digital Plan is governed by 5 basic

1.

“The market as far as possible, the State as far as needed”:
Promoting public private partnerships to expand infrastructure and services

2.

Comprehensively encourage the supply and demand of digital services
to reach critical mass

3.

Reduce tax and regulatory barriers to facilitate the deployment of
infrastructure and the supply of telecommunication services

4.

Prioritize Government resources in capital investments

5.

The Government will give example

(1) The Third Way, 1999, Dr. Juan Manuel Santos
And will have the following specific objectives:

Multiply by 4 the number of Broadband Internet connections

X4

7,6

8,8
Estrato 3
Estrato 2

Mobile3G/4G
Fixed >1MB

2,2
0,8

1,4

2010 1T

2013 2T

Meta 2014

Millions of Internet connections
FUENTE: MinTIC.

Estrato 1

35%
68%
105%

Crecimiento por estratos conexiones
Banda Ancha
Durante este Gobierno
It will have the following specific objectives:

50% of Households and SMEs connected to the Internet

X3

40%

50%

X7

58%

50%

Estimated

34%
17%
2010

2012 4T
Households

Fuente: IDC International Data Corporation

2014

7%

2010

2012 3T
Micro Companies

2014
And will have the following specific objectives:
Optical fibre submarine systems

Before•Arcos •SAm-1
•Maya-1•Pan American
•CFX-1

Municipalities connected by
fiber optic cable

•PCCS
A 2014 •América Móvil 1
•GlobeNet
•Level 3

777

1.078

551
200
2010

2012

Jun 2013

2014

Municipalities connected with the Project
high- speed connectivity 47
Colombia is strengthening the ICT Ecosystem
INFRASTRUCTURE

USERS

DEMAND

DIGITAL
ECOSYSTEM

APPLICATIONS

SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010

SUPPLY

SERVICES
INFRASTRUCTURE
Our goal 5.344 Rural Population Centers with more than 100 people
conected

We are taking at least one internet
point to Rural Population Centers with
more than 100 people through our
Kioskos Vive Digital
From 3 operators in 3G to six operators in 4G
companies

frequencies

Tablets granted
556.374

Municipalities connected with the
frequencies

Frequency 2.500 MHz
30MHz

309.630

660

Frequency 2.500 MHz
30MHz and 40MHz

30.000

57

Frequency AWS

30.000

57

Frequency AWS

67.426

144

Frequency AWS

119.317

255

No spectrum
Colombia is strengthening the ICT ecosystem
INFRASTRUCTURE

USERS

DEMAND

DIGITAL
ECOSYSTEM

APPLICATIONS

SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010

SUPPLY

SERVICES
SERVICES
We have the cheapest computers in the continent

No taxes, no duties
More connections for social stratum 1 and 2

33%

More
connections

In Social Stratum 1 and 2
1,5 million subsidies of
300,000 pesos, in average.
Computers for schools and its allies
We are going forward to the coverage of educational institutions

669.000
1.132.000

Computers granted
2014

Tablets granted by 2014

+20.000   

Official educational sites, cultural centers and
public libraries, benefited through Computers
for schools

Our Goal

12 children per
computer
Digital Natives, an opportuniy for regional development

Computers

+
Connectivity

+
Adoption

Knowledge

=

=
Opportunities
Colombia is strengthening the ICT ecosystem
INFRASTRUCTURE

USERS

DEMAND

DIGITAL
ECOSYSTEM

APPLICATIONS

SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010

SUPPLY

SERVICES
APPLICATIONS
IT

New
Vice Minister
Drive the software industry, hardware
and services in the country

CIO

Colombia
We are adjusting the structure of the state to meet the digital
challenges

Interior

Hacienda y
Crédito Público

Justicia y
del Derecho

Defensa Nacional

Agricultura y
Desarrollo Rural

Salud y Protección
Social

Trabajo

Minas y Energía

Comercio, Industria
y Turismo

Educación
Nacional

Ambiente y
desarrollo Sostenible

Vivienda

TIC

Transporte

Cultura

Relaciones
Exteriores
Colombia is strengthening the ICT ecosystem
INFRASTRUCTURE

USERS

DEMAND

DIGITAL
ECOSYSTEM

APPLICATIONS

SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010

SUPPLY

SERVICES
USERS
Behavioral economics and simplification are driving
consumer protection regulatios
Empowering consumers with relevant information
We are certifing Digital Citizens

+1 million

Colombian have been trained in the use of
Internet and now they are Ciudadanos
Digitales
147.000 of them taking part of vulnerable
people.

69.000

Teachers and Officers experts on the industry
have been trained on technology, in order to
improve their development teaching
We are building confidence in the use of ICT

Internet addiction
1.
PHISHING
2.
Cyber bullying
3.
4.
GROOMING
Child pornography
5.
6.
SEXTING
In the year 2014 the Digital Ecosystem of the country will
INFRASTRUCTURE

USERS

DEMAND

ECOSISTEMA
DIGITAL

APPLICATIONS

SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010

SUPPLY

SERVICES
We want to grow the Vive Digital plan from the regions
We build Vive Digital Regional together with the regions

Universities

X

Private Sector
Governors
Mayors
Vive Digital - OECD Keynote
WE ARE REDUCING
POVERTY
WE ARE CREATING
JOBS
WE ARE IMPROVING
COMPETITIVENESS
AND PRODUCTIVITY

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Vive Digital - OECD Keynote

  • 2. Our responsibility as an industry is to expand Internet usage in order to reduce poverty Poverty rate (< US 1,25 (PPP), 2005 Relationship between poverty and Internet users 100 90 More 80 Internet 70 60 Less Poverty 50 40 30 20 10 0 20 40 Internet user x 100 inhabitants 2009 SOURCE: UNCTAD, Information Economy Report 2010 60
  • 3. The technology Development creates Jobs directly and indirectly . Multiplier Effect Filipinas Jobs Multiplier Effect India 3,0 Jobs Multiplier Effect Colombia - Manizales 3,6 Rate Unemployment X3,6 X2 1,0 Technology Jobs 2,0 Economic Jobs 17% 1,0 Technology Jobs Economic Jobs SOURCE: Raul Katz, Universidad de Columbia, 2010, UNCTAD Information Economy Report 2010, NASSCOM 10% 8.500 Employee Payroll 10.000 Jobs directly
  • 4. And ICT has a great impact on productivity and competitiveness Global Competitiveness Index 2013 - 2014 5.8 5.6 5.4 Germany Japan 5.2 5.0 Malasia 4.8 Vietnam México Perú 4.4 4.2 4.0 Corea Israel Chile Spain Brasil 4.6 Singapore USA “An increase of 10 percentage points in broadband penetration accelerates economic growth by 1,4%”World Bank, 2010 Colombia 3.8 3.6 3.4 3.2 3.0 2.8 2.6 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 Network Readiness Index 2013 SOURCE: World Bank 2010; World Economic Forum, The Global Information Technology Report 2010 5.2 5.4 5.6 5.8
  • 5. In households the opportunity is concentrated on social strata levels 1, 2, and 3 Internet penetration by strata Income x Household Penetration (%) Household Internet (%) PC (%) Monthly income USD Population Million Stratum (1) 5-6 2 5% >3.300 4 3 7% 1.170 - 3.300 3 10 2 1 22% 56 70 26 660 - 1.170 47 17 39% 330 - 660 8 20 12 27% <330 2 5 50 (1) Based on electrical service coverage SOURCE: SUI, DANE 92 83 50
  • 6. In social strata levels 1 and 2 the main barriers are the high costs, the lack of a computer and the lack of training Why don't you have Internet at home? % Surveyed 39,9 Do not have money for it 33,8 There is no Computer at home 21,4 Prices are too high Do not need it 8,6 Do not know how to use Internet Internet cafe is less expensive (cheaper) 2,3 Never been offered the product 2,3 Do not want unnecessary debts 2,1 SOURCE: Market research of 2300 people of social stratum levels 1 and 2 in 43 municipalities, 2010 20,2
  • 7. In businesses, the opportunity is focused in the micro companies Company Type Companies (Number of Employees) (%) Large (+200) Businesses Penetration (%) Internet (%) PC (%) 0,1% 100 100 Medium (51-200) 0,5% 99 100 Small (11-50) 3% Micro (1-10) 96,4% 79 7 50 It is estimated that there are more than 1,600,000 companies in the countrySOURCE: SUI, DANE 96 13 50
  • 8. In small businesses the main barrier is the lack of perceived need Why don’t you have Internet in your business? % Surveyed 60,6 It is not necessary for the business 17,6 I don’t have a computer Cannot afford the costs Prices are too high Do not know how to use the service 12,9 9,3 6,5 SOURCE: Market Research of 1500 micro and small enterprises in 43 municipalities 2010
  • 9. To overcome these barriers... We are executing the Vive Digital Plan That seeks to promote the massive use of the Internet to leapfrog PROSPERITY FOR ALL
  • 10. Vive Digital Plan is governed by 5 basic 1. “The market as far as possible, the State as far as needed”: Promoting public private partnerships to expand infrastructure and services 2. Comprehensively encourage the supply and demand of digital services to reach critical mass 3. Reduce tax and regulatory barriers to facilitate the deployment of infrastructure and the supply of telecommunication services 4. Prioritize Government resources in capital investments 5. The Government will give example (1) The Third Way, 1999, Dr. Juan Manuel Santos
  • 11. And will have the following specific objectives: Multiply by 4 the number of Broadband Internet connections X4 7,6 8,8 Estrato 3 Estrato 2 Mobile3G/4G Fixed >1MB 2,2 0,8 1,4 2010 1T 2013 2T Meta 2014 Millions of Internet connections FUENTE: MinTIC. Estrato 1 35% 68% 105% Crecimiento por estratos conexiones Banda Ancha Durante este Gobierno
  • 12. It will have the following specific objectives: 50% of Households and SMEs connected to the Internet X3 40% 50% X7 58% 50% Estimated 34% 17% 2010 2012 4T Households Fuente: IDC International Data Corporation 2014 7% 2010 2012 3T Micro Companies 2014
  • 13. And will have the following specific objectives: Optical fibre submarine systems Before•Arcos •SAm-1 •Maya-1•Pan American •CFX-1 Municipalities connected by fiber optic cable •PCCS A 2014 •América Móvil 1 •GlobeNet •Level 3 777 1.078 551 200 2010 2012 Jun 2013 2014 Municipalities connected with the Project high- speed connectivity 47
  • 14. Colombia is strengthening the ICT Ecosystem INFRASTRUCTURE USERS DEMAND DIGITAL ECOSYSTEM APPLICATIONS SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010 SUPPLY SERVICES
  • 16. Our goal 5.344 Rural Population Centers with more than 100 people conected We are taking at least one internet point to Rural Population Centers with more than 100 people through our Kioskos Vive Digital
  • 17. From 3 operators in 3G to six operators in 4G companies frequencies Tablets granted 556.374 Municipalities connected with the frequencies Frequency 2.500 MHz 30MHz 309.630 660 Frequency 2.500 MHz 30MHz and 40MHz 30.000 57 Frequency AWS 30.000 57 Frequency AWS 67.426 144 Frequency AWS 119.317 255 No spectrum
  • 18. Colombia is strengthening the ICT ecosystem INFRASTRUCTURE USERS DEMAND DIGITAL ECOSYSTEM APPLICATIONS SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010 SUPPLY SERVICES
  • 20. We have the cheapest computers in the continent No taxes, no duties
  • 21. More connections for social stratum 1 and 2 33% More connections In Social Stratum 1 and 2 1,5 million subsidies of 300,000 pesos, in average.
  • 22. Computers for schools and its allies We are going forward to the coverage of educational institutions 669.000 1.132.000 Computers granted 2014 Tablets granted by 2014 +20.000    Official educational sites, cultural centers and public libraries, benefited through Computers for schools Our Goal 12 children per computer
  • 23. Digital Natives, an opportuniy for regional development Computers + Connectivity + Adoption Knowledge = = Opportunities
  • 24. Colombia is strengthening the ICT ecosystem INFRASTRUCTURE USERS DEMAND DIGITAL ECOSYSTEM APPLICATIONS SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010 SUPPLY SERVICES
  • 26. IT New Vice Minister Drive the software industry, hardware and services in the country CIO Colombia
  • 27. We are adjusting the structure of the state to meet the digital challenges Interior Hacienda y Crédito Público Justicia y del Derecho Defensa Nacional Agricultura y Desarrollo Rural Salud y Protección Social Trabajo Minas y Energía Comercio, Industria y Turismo Educación Nacional Ambiente y desarrollo Sostenible Vivienda TIC Transporte Cultura Relaciones Exteriores
  • 28. Colombia is strengthening the ICT ecosystem INFRASTRUCTURE USERS DEMAND DIGITAL ECOSYSTEM APPLICATIONS SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010 SUPPLY SERVICES
  • 29. USERS
  • 30. Behavioral economics and simplification are driving consumer protection regulatios
  • 31. Empowering consumers with relevant information
  • 32. We are certifing Digital Citizens +1 million Colombian have been trained in the use of Internet and now they are Ciudadanos Digitales 147.000 of them taking part of vulnerable people. 69.000 Teachers and Officers experts on the industry have been trained on technology, in order to improve their development teaching
  • 33. We are building confidence in the use of ICT Internet addiction 1. PHISHING 2. Cyber bullying 3. 4. GROOMING Child pornography 5. 6. SEXTING
  • 34. In the year 2014 the Digital Ecosystem of the country will INFRASTRUCTURE USERS DEMAND ECOSISTEMA DIGITAL APPLICATIONS SOURCE: World Bank “Building broadband: Strategies and policies for the developing world”, January 2010 SUPPLY SERVICES
  • 35. We want to grow the Vive Digital plan from the regions
  • 36. We build Vive Digital Regional together with the regions Universities X Private Sector Governors Mayors
  • 38. WE ARE REDUCING POVERTY WE ARE CREATING JOBS WE ARE IMPROVING COMPETITIVENESS AND PRODUCTIVITY