Telecoms & IT

Broad Reach

Broadband penetration in rural areas

In 2009, then-President Ricardo Martinelli announced a plan to connect the entire population of Panama to the internet. Martinelli’s Internet for Everyone initiative along with the responsible agency, the Governmental […]

In 2009, then-President Ricardo Martinelli announced a plan to connect the entire population of Panama to the internet. Martinelli’s Internet for Everyone initiative along with the responsible agency, the Governmental Innovation National Authority (AIG), have made the country one of the more advanced in the region for broadband connectivity. As of 2014, 86% of the population has access to the internet. The AIG plans to increase that number to 100 by 2020 and to increase speeds to 100Mbps. Fixed broadband is almost entirely provided by four companies—the incumbent, Cable & Wireless Panama, controls nearly 90% of the fixed line network. Competing telecommunications company UFINET controls a nationwide fiber optics network and currently is the only company with a presence in geographic extremes. However, providing access to rural areas and to the 14% without access remains an issue.

A potential solution to this is expanding mobile broadband via wireless devices. In Panama, mobile phone prices are among the lowest in the region; 2012 prices were recorded at roughly $12.60 per month. This is largely due to a highly competitive market, with four companies vying for the country’s relatively small population of 4 million, and a market nearing saturation. Only 4% of the population—likely in rural areas—does not have access to mobile phones. As of 2012, approximately 20% of rural inhabitants does not have access to mobile services. With 75% of Panama’s population living in urban areas, this means that one in five people of the 25% living in rural areas does not have access to mobile services.

The AIG’s network of public Wi-Fi access points has helped reduce the digital divide and social exclusion throughout the country in rural areas. Initially, 655 Wi-Fi access points were made available in nine of the country’s 12 provinces and by 2013, 1.3 million registered users were accessing the internet from 1,105 access points and exchanging, on average, more than 180 GB of content. The AIG plans to spend $32 million on the project over five years. In attempts to close in on the remaining 14% of the population without potential access to the internet, the AIG has also established and funds some 300 Infoplazas, similar to internet cafes, in rural areas. These centers provide free Wi-Fi and about 10 desktop computers. The AIG has also placed 36 payphones in rural areas that offer 1Mbps of free Wi-Fi; the agency has plans to double both the number of payphones and the speed of connection. Together, these efforts bring a fixed broadband connection to 80% of the population.
In 2010, mobile broadband overtook fixed access, and the following year Panama achieved the third-highest level of mobile broadband penetration in the region. 2G and 3G are available in most cities, with 3G expected to surpass 2G by 2018, taking up 73% of all mobile subscribers. However, many of the country’s rural and sparsely populated areas have yet to receive coverage. Now that the country’s four mobile operators have been granted licenses to provide 4G LTE, the mobility aspect of these services may bring broadband access to rural areas.
Mobile broadband remains a challenge for providers and 20% of the rural population lacking access to any mobile services.

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