COMMUNICATIONS: Argentina’s Great Leap Forward

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Apr 11 1997 (IPS) - Seven years ago, making a simple phone call in Argentina was a harrowing experience. There were only three million telephones for the nation’s 33 million inhabitants, lines were poorly maintained and the fact that “I couldn’t get through” was an accepted excuse for non-communication.

The privatisation of Argentina’s telecommunications in 1990 changed all that. By 1996 the total number of installed phones was topped six million and cellular services had made clear telephone calls possible from the remotest areas of the countryside.

Privatization has allowed telephone services to become among the most profitable businesses in Argentina. The companies that replaced the old ramshackle state-owned enterpise now trail only the Argentine oil giant YPF and another oil company in terms of profitability.

Meanwhile the communications network has branched out in new ways. Between 1990 and 1996, the number of cellular phone users surged from 4,700 subscribers to 667,000. By the year 2000, there could be more than one million cellular users, according to industry estimates.

Until recently, cell phones were such a symbol of upward mobility that many people purchased toy replicas of the real thing to “look the part.” Now taxis and buses offer on-board cellular services, a boon to travellers – particularly in Buenos Aires – where heavy traffic and a rapid life style make a cell phone a “basic human need.”

Also, telephone “beepers” are no longer monopolized by medical personnel. Today over 100,000 of these devices hang from the belts and skirts of merchants, housewives, taxi drivers, lawyers, journalists, and of course, physicians.

The drive to satisfy demand, coupled with strong competition, has resulted in lower cost. Currently a cell phone costs about 500 dollars, while a “beeper” service is available for 30 dollars a month, with the insrument supplied as part of the deal.

The horror stories of an endless wait for a telephone have faded into hisotory. Like the tale of one family that celebrated the 30th anniversary of its request to the old state-run phone company to instal a service in their home. Journalists were invited to cover the event.

Prior to privatization, offices and private homes would suffer through months of their telephones being out of order – a phenomenon that gave rise to illegal repair crews, many of whom were State employees and conducted repairs as private entrepreneurs.

In 1990, the government of Carlos Menem privatized telephone service, dividing Argentina into two geographic regions – north and south. The two firms awarded these captive markets were the Spanish company, Telefonica, and the French company, Telecom.

Under new management, the number of phone lines quickly doubled. When repair service is needed – an infrequent occurrence now that the whole infrastructure has been modernized – there is no more waiting hours to get a connection. Today, there are public phones booths in the remotest backwaters coupled with the appearance of “telephone parlors” where clients can relax in a comfortable room while making calls or sending facsimile (fax) messagess.

Telecom officials admit that the demand for basic telephone service is nearly satisfied. Consequently, there is a push to offer new services, long familiar overseas, but new in Argentina – such as call waiting, answering services, call forwarding and conference calling.

But the extent of Argentina’s new telephone service is not measured by new services alone. Today, a second phone line can be installed for 100 dollars, whereas in the days of State-controlled telephony, it cost 2,000 dollars. Another difference from “the old days” is that any installation can be paid for through available lines of credit.

There are other signs that the market is becoming saturated. In 1996, Telefonica and Telecom joint efforts earned 100 million dollars less than they did in 1995.

Whereas these two telephone companies were on the heels of YPF as Argentina’s most profitable companies in 1995, by 1996, Telecom slipped to 4th place, having been overtaken by a private oil company.