NOVEMBER 216 Digital Context: Argentina 1
Outline Overview 1 Digital scenario 2 Demand side 3 Supply side 4 Regulation side 2
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 2% in 214 67.3% of Argentina's population has a mobile-broadband subscription in 215 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 3
1 Digital scenario: Digitization Index 4
1.1. Structural Digitization Index, 215 1.9.8.7.6.5 Mexico Colombia Chile United States.4.3 Peru Argentina.2.1 Algeria Qatar Nigeria Pakistan Bangladesh Paraguay India Venezuela Vietnam Peru Argentina Egypt Ukraine Greece Philippines Indonesia Morocco Thailand Mexico Sri Lanka Italy Poland Bulgaria Cyprus China Saudi Arabia Croatia Colombia Slovenia Kazakhstan Russian Federation Slovak Republic Hungary Turkey Romania Uruguay Luxembourg Brazil Czech Rep. South Africa Ireland Chile United Arab Emirates Belgium Spain Singapore Austria Portugal Germany Malaysia Denmark Latvia Canada Australia France United States Sweden Netherlands Finland Lithuania Korea, Rep. Japan Estonia 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
1.2. Digitization Index 215: Dimensions 1.9.8.7.6.5.4.3.2.1 Affordability ICT Regulation Infrastructure CHL ARG PER OCDE URY GBR USA 1.9.8.7.6.5.4.3.2.1 ARG PER MEX URY OCDE CHL GBR USA 1.9.8.7.6.5.4.3.2.1 ARG PER URY MEX OCDE GBR USA Individual use Enterprise use Content 1.9.8.7.6.5.4.3.2.1 MEX PER ARG USA GBR URY OCDE 1.9.8.7.6.5.4.3.2.1 ARG PER MEX CHL OCDE USA GBR 1.9.8.7.6.5.4.3.2.1 ARG URY GBR MEX USA CHL PER OCDE 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
2 Demand side 7
(%) Digital context: Argentina 2.1. Computer and Internet: access at home and usage ICT access and Internet use Frequency of Internet use 1 1% 9 8 7 6 5 9% 8% 7% 6% 5% 4% Increasing frequency of Internet use 4 3% 3 2% 2 1 Internet access Computer access Mobile access Internet use 1% % 211 214 Daily internet use Monthly internet use Weekly internet use Lower frequency of use 211 215 Significant increase in Internet access and Internet use between 211 and 215 Note: use of Internet over the last 3 months 8
Internet users (%) Digital context: Argentina 2.2. Internet use: evolution by geographies 8 7 MEAN 214 6 5 4 3 2 1 Patagonia Pampa Buenos Aires Litoral Cuyo Noroeste 9
(%) (%) Digital context: Argentina 2.3. Internet access: barriers Barrriers in households 6 5 4 Cost is the most important barrier to establish an Internet connection Barriers for non-internet users 6 5 4 3 2 3 2 1 1 Too expensive Lack of necessity Lack of skills Without coverage Others Mobile internet access Lack of necessity Lack of skills Without access Others 211 211 % Households without Internet access in 211 % Non-Internet users in 211 Cost is the main barrier to Internet access at home 1
(%) Digital context: Argentina 2.4. Places for Internet access (last 3 months) 8 7 6 5 4 3 2 1 Home Work Private centre Education centre Others Mobile internet Public centre 211 Internet use in 211: Internet use in 215: +11.7 p.p. 54.4% 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 1 9 Most popular activities 5 4 3 x 5.21 x 1.54 8 2 7 1 6 5 4 E-commerce 211 214 E-banking 3 2 1 Social networks Communication Health and medicine Information E-government Job search E-commerce E-banking Education 214 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 5 45 4 MEAN 214 35 3 25 2 15 1 5 Patagonia Buenos Aires Litoral Cuyo Pampa Noroeste 214 13
(%) Digital context: Argentina 2.7. E-banking: evolution by geography 5 45 4 35 3 25 MEAN 214 2 15 1 5 Patagonia Buenos Aires Litoral Cuyo Pampa Noroeste 214 14
(%) Digital context: Argentina 2.8. E-commerce: evolution by geography 4 35 3 25 MEAN 214 2 15 1 5 Patagonia Buenos Aires Litoral Cuyo Pampa Noroeste 214 15
2.9. Geographical distribution in 214: usage over the last 3 months Internet Smartphone E-banking E-commerce High Medium Low 16
2.1. Population characteristics: Internet and smartphone use (%) Smartphone Internet use DENSITY INCOME EDUCATION LABOUR SITUATION AGE GENDER 23 22 21 2 19 18 17 16 15 14 13 12 11 1 9 8 7 6 5 4 3 2 1 Rural Urban Quintile 5 Quintile 4 Quintile 3 Quintile 2 Quintile 1 Terciary Secondary Primary No studies Housewife Retiree Student Unemployed Employed + 65 45-64 34-44 25-34 18-24 Female Male 23 22 21 2 19 18 17 16 15 14 13 12 11 1 9 8 7 6 5 4 3 2 1 1 8 6 4 2 2 4 6 8 1 Note: Internet use and smartphone ownership data are from 214 17
2.11. Population characteristics: users of e-banking and e-commerce (%) E-banking E-commerce DENSITY INCOME EDUCATION LABOUR SITUATION AGE GENDER 23 22 21 2 19 18 17 16 15 14 13 12 11 1 9 8 7 6 5 4 3 2 1 Rural Urban Quintile 5 Quintile 4 Quintile 3 Quintile 2 Quintile 1 Terciary Secondary Primary No studies Housewife Retiree Student Unemployed Employed + 65 45-64 34-44 25-34 18-24 Female Male 23 22 21 2 19 18 17 16 15 14 13 12 11 1 9 8 7 6 5 4 3 2 1 5 4 3 2 1 1 2 3 4 5 Note: E-banking and E-commerce data are from 214 18
3 Supply side 19
3.1. Mobile situation Mobile-cellular telephone subscriptions (per 1 inhabitants) 18 16 14 12 1 8 6 4 2 143.9 17.9 25 26 27 28 29 21 211 212 213 214 215 Argentina Spain Domestic mobile-telephone traffic (billions of minutes) 12 1 8 6 4 2 25 26 27 28 29 21 211 212 213 214 Mobile population Coverage 213 Argentina 98% Spain 99.8% Tariffs: Mobile-cellular prepaid-1 min call (USD) 1..8.6.4.2..41 Argentina, 215.11 Spain, 215 28 29 21 211 212 213 214 215 On-net Argentina On-net Spain Off-net Argentina Off-net Spain 2
3.2. Fixed broadband 57% 57 59% 59% % 2% 15% 15 % Argentina 214 39% 28% 28 % 5 4 3 Fixed broadband monthly subscription charge 41.16 USD215 Fixed broadband speed (in Mbit/s) 4 3 2 1 1 Mbit/s 28 29 21 211 212 213 214 215 Spain Argentina Cable modem módem DSL Fibre Fibra 13% 5% 5% Spain 214 17% 18% 18 % 2 1 28 29 21 211 212 213 214 215 Spain Argentina Fixed broadband monthly subscription charge 26.7 USD215 Fixed broadband subscriptions (per 1 inhabitants) X 1.23 3 25 2 X 1.61 15 1 5 77 77% 7% % Argentina 21 215 Spain 21 215 Argentina Spain 21
3.3. Wireless broadband Mobile-broadband subscriptions (%) Total wireless broadband subscriptions (%) 9 8 7 X 3.4 X 13.267.2% 8 7 6 X 2.8 6 46.% 5 5 4 3 13.9% 82.% 1.1% 67.3% 4 3 67.1% X 6.4 2 1 23.8% 2 1 24.% 32.2% 21 Spain 215 5.% Argentina 21 215 5.% 21 Spain213 21 Argentina 213 Spain Argentina Spain Argentina Note 1: The numbers inside the bars show number of subscriptions per 1 inhabitants Note 2: The total wireless broadband subscriptions indicator is composed of satellite, terrestrial fixed wireless and mobile broadband subscriptions 22
Spain Argentina Digital context: Argentina 3.4. Annual investment in telecommunication services Annual investment in telecommunication services (millions of USD, % GDP).6.5 X 1.24 X 1.17.4.3.2 5269 6323 1813 2641.1 21 214 21 214 España Argentina Note: Values inside bars represent total investment in millions of USD 23
4 Regulation side 24
Efficiency of legal system in challenging regs, 1-7 (best) Software piracy rate, % software installed Digital context: Argentina 4.1. ICT laws: Efficiency and Piracy 6 1 5 4 3 2 1 FIN DEU USA URY FRA IND CHL CHN DNK TUR MEX ESP BRA COL PER ITA ARG VEN GBR SGP 9 8 7 6 5 4 3 2 1 ARG VEN CHN URY PER TUR IND CHL MEX COL BRA ITA ESP FRA SGP DEU NOR GBR FIN LUX USA 1 2 3 4 5 6 7 Laws relating to ICT, 1-7 (best) 1 2 3 4 5 6 7 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
Ease of doing business Ranking Digital context: Argentina 4.2. Ease of doing business & entrepreneurship 2 18 16 14 12 1 8 6 4 2 IND ARG BRA URY MLT TUR COL PER ITA CHL MEX ESP FRA DEU NOR FIN AUS KOR DNK SWE SGP GBR 5 1 15 2 No. new firms per 1, workers Australia United Kingdom Chile Uruguay Spain Brasil Peru Korea, Rep Colombia Germany Canada Turkey Costa Rica Jamaica Mexico Austria Bolivia Guatemala El Salvador Argentina 2 4 6 8 1 12 14 16 No. new firms per 1, workers High income OECD countries Rest (Argentina is highlighted in green) Source: BBVA Research & World Economic Forum Source: Doing Business (World Bank Group) 26
4.3. Political and regulatory environment Weak Medium High No data Median 3.7 Argentina 2.8 The political and regulatory environment of Argentina is below the global median Source: BBVA Research & World Economic Forum, 215 Note: In order to measure the political and regulatory environment, indicators such as ICT-related laws, piracy rates, efficiency of legal system and protection of intellectual property are taken into account. 27
5 Appendices 28
Composition of the Digitization Index Infrastructure Infrastructure Fixed (wired)-broadband speed, in Mbit/s. International Internet bandwidth. It is measured in bits per second per Internet users. Percentage of total population covered by a mobile network signal. International Internet bandwidth in megabits per second (Mbit/s). Cost Cost Monthly subscription charge for fixed (wired) broadband Internet service (PPP $). Fixed (wired) broadband is considered to be any dedicated connection to the Internet at downstream speeds equal to, or greater than, 256 kilobits per second, using DSL. Users Users adoption adoption Active mobile-broadband subscriptions. Fixed (wired)-broadband subscriptions. Mobile telephone subscriptions Percentage of households with Internet access at home. Proportion of individuals that have used the Internet in the last 12 months. how widely used are virtual social networks in the country. Regulation Regulation How developed are your country s laws relating to the use of ICT (e.g., electronic commerce, digital signatures, consumer protection)? [1 = not developed at all; 7 = extremely welldeveloped] Firms adoption Firms adoption What extent do businesses use ICT for transactions with other businesses in the country? What extent do businesses use the Internet for selling their goods and services to consumers in the country? What extent do businesses adopt new technology in the country? [1 = not at all; 7 = to a great extent] Content Content The Government Online Service Index assesses the quality of governments delivery of online services on a -to-1 (best) scale. There are four stages of service delivery: Emerging, Enhanced, Transactional and Connected. In each country, the performance of the government in each of the four stages is measured as the number of services provided as a percentage of the maximum services in the corresponding stage. 29
Source of data from the Demand Side: Survey conducted by the National Institute of Statistics and Census of Argentina Republic (INDEC) for years 211 and 215. 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 213-214 Survey). 3
Source of data from the Supply Side: World Telecommunication/ICT Indicators database (ITU, 216) The World Telecommunication/ICT Indicators database contains time series data for the years 196, 1965, 197 and annually from 1975 to 215. These data are available for over 2 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 31
Financial Inclusion David Tuesta Lead Economist Mauro N. Acuña Víctor Adame Javier Alonso Alfonso Arellano Noelia Cámara Rosa Mª Oliveros Lucía Pacheco Argentina Gloria Sorensen Chief Economist Marcos Dal Bianco María Celeste González Adriana Haring Jorge Alberto Lamela Juan Manuel Manías For further information, please contact alfonso.arellano.espinar@bbva.com or noelia.camara@bbva.com 32