Development & Aid, Headlines, Latin America & the Caribbean

PARAGUAY: Internet Access? What About Just a Telephone?

Alejandro Sciscioli

ASUNCIÓN, Nov 18 2005 (IPS) - When Emilio Contrera, a small farmer in Paraguay who is nearly 80 years old, wants to phone his daughter in the capital, he must first overcome a number of hurdles.

He says it is getting more and more difficult for him to walk the two kilometers from his house to the telecentre run by Paraguay’s public telephone company, the Compañía Paraguaya de Comunicaciones (COPACO) in the town of Yegros, 280 km east of Asunción.

“There is almost never anyone attending the phone booth, and you have to wait for the employee to show up,” says Contrera. But he adds that he is “lucky” because one of the officials is his friend, and helps Contrera make the phone call whenever he sees the elderly farmer coming down the road.

In addition, the office is only open from 8:00 to 19:00. Outside of the office hours, more than 90 percent of the local residents remain incommunicado from the rest of the world, since they have neither fixed telephone lines nor access to mobile phones.

“There is no cell phone signal around here,” said the farmer.

As Contrera’s case illustrates, telephones are still a luxury item in this South American country.

The elderly farmer is one of the 5.64 million Paraguayans – 94 percent of the population – who have no fixed telephone line in their homes, and one of the 4.2 million – 70 percent of the population – who have no cell phone.

COPACO has a monopoly over basic telephony services, while four local companies, in partnership with transnational corporations, offer mobile phone services.

Telecommunications coverage is concentrated in the triangle comprised of Asunción and the eastern cities of Encarnación and Ciudad del Este.

Making information and communication technologies (ICTs) available to the poor and to remote communities was one of the central issues discussed at the second phase of the World Summit on the Information Society (WSIS), which took place Wednesday through Friday in the Tunisian capital.

In 1995, Paraguay’s telecommunications law established a “universal services fund” to expand ICTs to rural areas and low-income neighbourhoods.

The fund was created with the aim of subsidising the providers of public telecommunications services in areas where such subsidisation is justified, says article 97 of the telecoms law.

The National Telecommunications Commission (CONATEL), a regulatory agency, is in charge of administering the fund, which is financed by a one percent tax on the net earnings of providers of telecoms services.

The subsidised efforts to expand services got underway in 1999, the manager of the universal services fund, Oscar Duarte, told IPS.

“Under the concept of subsidies for the companies implementing the projects, we supply the initial capital for the service they will provide, but they assume the risk that the activity will not be profitable,” he explained.

He pointed out, for instance, that newly created phone booths in rural areas might not bring profits to the subsidised firm.

Since 1999, CONATEL granted nearly 16 million dollars to 13 projects to install public phones in rural areas, provide 287 high schools with Internet connectivity, open community telecentres in the country’s 17 provinces, and create and expand the 911 emergency telephone service.

Two other projects have applied for subsidies of approximately one million dollars to expand the 911 service in Ciudad del Este and set up a remote video surveillance system in and around Asunción, Duarte added.

But the way the fund has been functioning has drawn suspicion. CONATEL was searched early this month by a prosecutor from the economic crimes unit to verify whether any of the companies that have received subsidies used them improperly.

A businessman in the telecoms industry who preferred not to give his name told IPS that there were some problems with the companies admitted to the subsidy programme by CONATEL, “which simply turned a blind eye.” He also maintained that a majority of the public tenders to grant subsidies “were rigged.”

“I don’t know if there was corruption,” said Daniel Gadea, the only computer technician in Paraguay currently certified by U.S. computer-maker Apple. “The only thing I can say is that the quality of our telecommunications and Internet services is pitiful,” he told IPS.

Although the law does not specify that Internet services are a state monopoly, CONATEL regulations prohibit private companies from connecting to the transoceanic fiber optic network through the Network Access Point (NAP) of the Americas in Miami, Florida.

“As long as CONATEL defends the interests of COPACO, no technology-related initiatives will prosper in this country,” complained the computer technician.

It was not until this year that private Internet service providers and COPACO reached an agreement for the state-run telephone company to provide wholesale broadband access to the companies, which will offer the service to their customers.

“This way, the extremely high prices paid (for local service) will never come down,” protested Gadea.

“The government isn’t doing a thing to develop any kind of technology,” complained the president of the Paraguayan Federation of Chambers of Information and Communications Technologies, Rodrigo Campos Cervera.

The businessman commented to IPS that the cost of access to the worldwide web would drop significantly if the Internet providers were allowed to obtain their own broadband fiber optic connection.

But to the contrary of what the private sector was hoping for, COPACO is getting ready to enter the retail market for Internet services, and plans to offer connection through Asymmetric Digital Subscriber Line (ADSL) transmission technology, which allows high speed data transmission over normal telephone lines without the need to install a second line, for a fixed monthly fee.

Alfredo Moreira, the manager of COPACO’s broadband unit, told IPS that the system would be up and running by early next year.

In Gadea’s view, the new competition will prompt private companies to lower their rates.

But the Paraguayan Federation of Chambers of ICTs complains that it will amount to unfair competition.

COPACO will also join the mobile telephony business as a fifth operator in the market, and has begun to set up a system of services for rural areas, named Ruralcel.

Emilio Contrera, however, knows nothing about the telecoms market. “The only thing I want is to be able to talk on the telephone more often with my daughter, my granddaughter and my great-granddaughter. And for them to be able to call me sometimes too,” he says with resignation.

 
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