Access to the internet is playing an increasingly important role in society and nowhere is this more true than in developing regions. Not only does it have a very tangible impact on employment, productivity and GDP but it has an almost immeasurable impact on the underlying fabric that weaves society together.

In the Latin America region, internet penetration has been historically low when compared to industrialised nations. The socioeconomic diversity in the area also means that infrastructure varies greatly.

There are roughly 255 million internet users in Latin America and the Caribbean, approximately 43 per cent of the region’s population. Breaking the connection type down, the region has approximately 145 million fixed line connections – accounting for a quarter of the global total. Latin America also has approximately 286 million mobile broadband connections, nearly double the number of fixed line broadband connections.

According to a 2012 Kleiner Perkins Caufield & Byers study, Argentina has the highest total internet penetration at 68 per cent followed by Chile, Uruguay and Colombia.

Despite these impressive figures and sustained compound annual growth rates of both fixed and mobile internet connections, it is still lagging behind most other regions in terms of penetration, much to the detriment of the economy. The World Bank found that if internet penetration were to increase by just ten per cent, it would translate into a three per cent increase in GDP for the region.

Aware of the host of benefits that increased penetration will bring, governments are rapidly working to make broadband more affordable and implement fibre-optic networks.

Bandwidth continues to be an issue for much of the region; however, a new submarine cable network should help substantially. The Atlantic Cable System (ACSea) is being developed in Brazil and will link with the USA, Europe, Africa, and other Latin American countries. Once complete, the 24,000km cable will increase bandwidth and should reduce prices for broadband in the region.

Mobile data uptake

Given the modest uptake of fixed line and wireless connectivity in the region, it is interesting to see that mobile data has experienced rapid expansion.

According to Analysys Mason, smartphones will account for 50 per cent of total handsets in Latin America in 2017. This is impressive given that it was a region dominated by feature phones only a few years ago.

Room for growth

However, the low penetration rates for fixed line broadband leaves room for growth; something that will continue to happen as GDP per capita increases.

With the middle class expanding in countries such as Brazil, a rapid adoption of broadband is likely to occur over the coming five years.

The effect of increased uptake of both fixed and mobile internet connectivity will have a snowball effect, lifting GDP, improving employment rates and infrastructure. With roughly 314 million people in Brazil and Mexico alone, the need for Wi-Fi offload technologies is likely to be key. Looking to China as an example, which had a burst of growth similar to that which Latin America is likely to experience, China Mobile had to implement two million hotspots to cope with data demands.

Brazil is the first country in the region to begin implementing such a strategy to cope with the burden already being placed on its 3G network. TIM Brasil has aggressively started rolling out a 10,000 strong hotspot network, which it hopes will also serve areas that standard fixed line connections cannot reach.

4G and the World Cup

Again, the region as a whole lags behind much of the world, but this is likely to change very quickly. Informa Telecoms forecasts that 4G subscriptions are likely to increase from two million in 2013 to 55 million in 2017. There are currently an estimated 135 million HSPA/HSPA+ subscriptions.

The FIFA World Cup 2014 is expected to play a role in the mobile data growth in the region. Winners of the 4G spectrum in Brazil have been told that they have to launch fully operational services in World Cup host cities by the end of 2013 which is likely to act as a catalyst for more high speed mobile services across the region.

Truly connected

Despite economic and socioeconomic challenges, Latin America and the Caribbean is one of the few regions to have experienced continual growth in all areas of internet connectivity. Mobile, fixed, and fourth generation technologies are all expanding at an impressive rate and with improved infrastructure on the not-too-distant horizon, Latin America is on its way to becoming truly connected.