PRESS RELEASE

92 Percent of Broadband Connections in Chile Will Exceed 2 Mbps by 2016

- During the first half of 2012, Broadband 2.0 connections grew 9.5 percent, twice as much as connections under 2 Mbps, reaching 1,880,000 subscribers

Nicolas Chiappara presenting the Cisco Broadband Barometer 2.0 to the press

Santiago, Chile, November 28, 2012. – Cisco announced today the results of the Cisco® Broadband 2.0 Barometer for Chile. It shows that the country experienced a growth of 4.7 percent in fixed Internet connections between December 2011 and June 2012, reaching 2,145,000 subscribers and a penetration of 12.3 percent over the total population. Out of the total number of connections, 87.6 percent were over 2 megabits per second.

Due to the rise in the consumption of applications, the growing offers of service providers, and the technological evolution, the Cisco Barometer updated its definition of “broadband.” The study now focuses mainly on connections of over 2 Mbps, which allow the activities of a typical user – such as video calls, social networking and standard definition video streaming – to be performed efficiently.

“The fact that 87.6 percent of broadband connections in Chile corresponds to Broadband 2.0 connections is a sign that users are demanding better services”, said Nicolás Chiappara, general manager, Cisco Chile, at the launch of the updated version of the Cisco Broadband 2.0 Barometer. The study, conducted by the IDC consultancy company, highlights the importance of connection infrastructures in the development of a country.  

The new version of the study additionally analyzes the growth of mobile connections, which increased 3 percent, representing a total of 1,605,000 subscribers. In the meantime, fixed broadband connections grew 9.5 percent in the first half of 2012, twice as much as the total of fixed connections.

According to Chiappara, Chile can still increase the penetration of Broadband 2.0. “We must have the proper infrastructure to increase the coverage and quality of connections of this type of access,” he said. “The services significantly increasing will be the ones related to the social, collaborative and multimedia worlds, all based on applications and video, and we anticipate that by 2016 they will represent 50 percent of all the Internet traffic in Chile, according to the Cisco Visual Networking Index forecast.”

Chiappara indicates that in order to satisfy consumer demand, higher capacity and faster connections will be needed “as well as an increase in the number of connected residences, which is now at 39.8 percent”.

Jaime Soto, president of the Asociación Chilena de Empresas de Tecnologías de la Información (ACTI), said that the increase in broadband connections reflects the efforts of both the telecommunication authorities and the new operators entering the sector. “Despite that, we are under the average of adoption shown by the member nations of the Organisation for Economic Co-operation and Development, OCDE. As a country we must think and act on the new offerings and demand incentives for these types of services.” 

“It is essential that fixed connections still grow, as they are the ones supporting the most sophisticated applications and the ones using higher broadband. The next challenge is the overcrowding of uses and applications over the network. Chile must advance in the pyramid of digital development, from infrastructure to applications, and the dream is to reach the top of that pyramid, using technology to improve the country’s productivity,” said Pelayo Covarrubias, president of the Fundación País Digital.

Highlights of the study

• Less than half (20 percent) of Broadband 1.0 connections were replaced by 2.0 connections, mainly due to service provider strategies oriented to maintaining prices while increasing speeds.
• 87.6 percent of fixed broadband connections in Chile are Broadband 2.0.
• Within Broadband 2.0 connections, 45 percent are between 2 and 5 Mbps.
• xDSL and cable modem connections are still dominating the market. xDSL connections grew 1.3 percent in the first half of 2012, while cable modem connections grew 6 percent.
• Cable modem connections have already surpassed 48 percent of fixed connections in Chile, exceeding xDSL connections.
• Together, xDSL and cable connections represent 97 percent of connections.
• Fixed Broadband 2.0 connections in Chile grew 9.5 percent in first half of 2012, twice as much as the total number of fixed connections.

Factors helping the broadband maturity in Chile

• Strategic actions of service providers to increase speeds at the same price.
• Government initiatives to reduce international broadband costs by buying large amounts of bandwidth.
• The government’s use of the Internet for public services instead of in-person assistance.
• Bundling services (it is expected that mobile services will be integrated into triple play).

About Cisco Broadband Barometer

Cisco Broadband Barometer is a campaign to highlight the importance of broadband in the development of the countries of the region and to bring attention to the need for a proper information infrastructure.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go tohttp://newsroom.cisco.com.

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