Why is Argentina's Internet so outrageously slow?

BUENOS AIRES -- Argentines have embraced broadband Internet usage, but infrastructure investment hasn't kept up. Will the local web creak to a halt?
Written by Ian Mount, Correspondent (Buenos Aires)

BUENOS AIRES -- Using web services on a smart phone in Argentina is so slow you half expect to hear the grind and squeal of a dial-up modem. It's almost as slow as rush hour traffic on the city's Avenida Libertador (above). And for much of the day, fixed broadband service isn't much better.

That's bad news for Buenos Aires, which in recent years has become one of Latin America's hottest tech hubs, replete with co-working spaces, incubators, city-sponsored technology districts and hackathons, and networking groups with names like Palermo Valley. But a boom in Internet and mobile phone usage, paired with years of low infrastructure investment, has created a bandwidth bottleneck that has stuck local residents and entrepreneurs in the slow lane.

The numbers are clear. In the Net Index country ranking of consumer download speeds from the Internet metrics company Ookla, Argentina ranked 106th out of 182 countries, behind Uganda and Laos and down from 90th place in 2011. That puts it 49 spots behind neighboring Uruguay, 48 spots behind Chile, and 32 behind Brazil. Argentina's speed of 4.30 Mbps (megabits per second) was only a third of the international average of 13.05 Mpbs, and less than 10 percent of list-leading Hong Kong.

The mobile web is even worse. According to data from the tech hardware manufacturer Cisco, the average mobile connection speed in 2012 in Argentine was 154 Kbps (kilobits per second), far below the Latin American average of 200 Kbps, not to mention the worldwide average of 526 Kbps.

This is frustrating for the scores of local and foreign web entrepreneurs (some poached from a government start-up incubator in neighboring Chile) who were attracted by Buenos Aires's combination of culture, price, weather, nightlife and educated workforce.

"It's killing us as it has gotten significantly worse lately," says Chad DePue, founder of Inaka, an app design firm based in Buenos Aires. "Our biggest challenge is not bandwidth, however, but consistent bandwidth. In the past six months it has become progressively less consistent, and in the past month the problem has become acute. Calls via Skype are difficult. Inaka recently had a Fortune 500 client that asked us to use landlines so that we could communicate better as Skype just wasn't consistent enough to rely on."

Similarly, moving files between co-workers has slowed to a standstill.

Withers Davis, founder of Buenos Aires web design and programming company Uplifted, says that often, if a file takes 15 minutes to download, it arrives corrupted. "We often deal with large files that change daily. Synching projects across multiple team members is impacted by upload speeds especially, which are sometimes super slow," he says.

So how did the Argentine web slow to a turtle-like crawl?

The simple answer is that increasing numbers of users are crowding onto networks whose development has been hampered by actions of the national government.

The government's negative effect on Internet speed is most direct in the case of mobile Internet, says Hernán Galperin, director of the Centro de Tecnología y Sociedad at the Universidad de San Andrés.

"Mobile Internet is slow, particularly in the city of Buenos Aires, because Argentina is one of the countries that has allocated the least amount of spectrum for the mobile operators. In the congested areas, like Buenos AIres, you have lots of users and phones trying to do data and little space. It's a small road and everyone wants to be on it," he says.

Hernán Galperin

What's happened, Galperin explains, is that Argentina has not allocated the communication spectrum that has been internationally opened for broadband 3G mobile use. There is only 135 MHz (Megahertz) open for mobile use in Argentina, Galperin says, compared to 260 MHz in Chile and 440 MHz in Brazil. Mobile companies could install more towers to use the spectrum they have more efficiently, of course. But that's expensive. Plus, the government has said it would auction off the new spectrum, so mobile providers have held off making the investment.

"They still say they are going to allocate the new spectrum, but no one knows how or when," says Galperin.

Making things worse, Galperin notes, the Argentine government has kept some of the older "2G" spectrum for itself so it can launch a planned state-owned mobile company, Libre.ar.

For fixed broadband, Galperin says the basic infrastructure is sound, but the top speeds offered are low because weak competition has hindered investment in faster web speeds and better infrastructure.

"In countries like Brazil and Chile, the operators are offering 50 or 100 Mbps to your house. In Argentina, that's not happened," he says.

The problem is that in most parts of Argentina, competition is a two-way battle between the country's main cable provider -- owned by Grupo Clarín -- and the local phone company's DSL. And Grupo Clarín is locked in a bitter fight with Argentina's national government, which wants to take away its license to operate its broadband arm, Fibertel.

"Obviously you're not going to invest huge chunks of money if the government is threatening to take away your license," says Galperin. "And if one guy is not competing too hard, the other guy ... Well, it's not fierce competition."

The sad news for web users and Internet entrepreneurs in Buenos Aires is that the problems are only likely to get worse. Argentines are thought to own 1.4 mobile phones per person, and while that number may be exaggerated, more and more locals are using smart phones with Internet access. Indeed, the mobile industry's GSMA trade group expects Argentine cell phone providers to make more money off people downloading data on their phones than from people making phone calls this year, putting further strain on an already overwhelmed system. On the fixed broadband side, Grupo Clarín's chief cable and broadband executive has said that he wants to invest $300 million this year. But that depends on the company's relationship with the government -- a relationship that is unlikely to improve anytime soon.

In the meantime, locals will be stuck listening for the creak of the dial-up modem as bits move toward them a snail's pace.

Photos from Flickr/Luis Argerich and Universidad de San Andrés

This post was originally published on Smartplanet.com

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