By IPS Correspondents
MEXICO CITY, Jan 14 2000 (IPS)

Powerful corporations are caught up in an aggressive competition for the Internet market in Mexico, where the number of people using the global computer network has swelled from 300,000 to 2.5 million in just five years.

Though the Internet remains a mystery to most Mexicans, who do not have access to computers, let alone telephone lines, telecommunications companies are placing their bets on what they hope will earn them millions of dollars.

In 1998-1999, Internet advertising sales in Mexico jumped from 800,000 to approximately five million dollars, while the purchase of products via the network reached more than 30 million dollars last year, according to several reports.

The Telmex telephone company (in a joint venture with Microsoft), the Televisa communications conglomerate, Grupo Medcom (owner of several radio stations), Infosel Communications (associated with Spain’s Telefónica portal, Olé), and TV Azteca, are currently the major competitors for Mexico’s Internet market.

“The Internet is today one of the strongest business and communications veins, and everyone wants to take their chances on it,” said Mariano Guillén, computer expert from the Ibero- American University, who explained that attention lavished on Mexico is because the nation is the gateway to selling products to the entire Spanish-speaking world.

Advertising for different web-sites and Internet portals indundate the local media, and city streets and public spaces are covered in billboards, while web-related businesses offer enticements for computer buyers who want easy Internet access.

Nearly all government agencies have web-sites, as do the private sector, non-governmental, religious and political organisations.

Interest in the global computer network is such that Televisa’s announcement that it would launch its Internet portal by March triggered euphoria among investors. Televisa’s holdings include TV, radio, sports arenas, theatres, magazines, mobile telephone services and recording companies.

As 1999 ended, Televisa shares rose to 71 dollars each, 10 dollars over the November price.

Share prices increased because investors know that Televisa has the appropriate infrastructure, distribution channels and know-how to become a major player on the Spanish-speaking Internet market, pointed out a report by J.P. Morgan, a US investment bank.

Today, “whoever does not have a piece of the (Internet) pie would be better off packing up and going home,” wrote Gabriel Székely in his ‘El Universal’ newspaper column.

Advertising for portals such as Starmedia have had a major impact in Mexico. From 1999’s second trimester to the third, the number of visits to the company’s web-sites increased ten-fold, from 35 to 350 million, according to Starmedia sources.

Mexico “has responded overwhelmingly” to Starmedia’s publicity campaigns, declared company spokesman Patricio Carmody.

In 1998, Starmedia customers in Mexico represented 23 percent of the company’s total for Latin America, and grew to 30 percent in 1999.

“We estimate that by 2002, or soon thereafter, Internet business in Mexico will have 12 million more clients,” indicated Luis Tejada, a media expert for the Boston Consulting Group.

But the pieces of the pie Internet companies already have and hope to obtain in the future are thanks to a small portion of Mexico’s nearly 100 million inhabitants.

The nation has only 2.2 computers for every 100 people, more than 90 percent do not know how to use them and just 10 percent have access to telephone lines. In addition, only 0.2 percent of primary school students have access to computers.

In its 1995-2000 information technology development plan, the Ernesto Zedillo government states that though computer growth is strong, nearly all investment in the sector “involves large industrial, trade and financial groups.”

Most of the small and mid-sized companies have “scant or zero” access to computer technology, but they employ 80 percent of the working population, and their production represents 65 percent of the nation’s total, according to the government document.

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