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Carlos Slim And Mexico's Digital Divide

A recent story we published had a bold title: Is Tijuana The New Tech Mecca? A Tijuana journalist Jason Thomas Fritz posed a funny, and insightful response:

Tijuanalandia Tweet

Tech Meccas require internet speeds fast enough to stream YouTube videos without waiting minutes to load, right?

Although aggravatingly slow, by having access to the Internet, Fritz makes up a small minority in Mexico.

When it comes to home connectivity, the number of haves and have-nots in Mexico is quite surprising. Via The Christian Science Monitor:

There are fewer than 41 million Internet users in Mexico, a country of more than 112 million people. That’s a connectivity rate of just 36 percent in Latin America’s second-largest economy.

Around 17 percent of individuals can access the Internet in their homes. For an economy of its size, this digital divide is stark among its neighbors in the region. In Brazil, the region's largest economy, 38 percent can access internet from their home.

The name Carlos Slim might be fresh on American minds — he was just named by Forbes the richest person on the planet. And critics claim the main source of his exuberant $73 billion fortune is a large factor in the Mexico digital divide.

A headline to think about: If Billionaire Carlos Slim Were a Country, He'd Be the 8th Richest in Latin America.

His fortune is based in telecommunication. He owns the monopoly América Móvil (Telmex), which in 2012, it still controlled 80 percent of Mexico’s landlines and 75 percent of its broadband connections.

The lack of competition has driven prices of high speed internet up to a level that has boxed out many of the country's less wealthy citizens. The Organization of Economic Co-operation and Development (OECD) published a review of Telecommunications in Mexico in 2012. Here's a snapshot of getting broadband in 2010 :

Mexico, in 2010, had about 10 broadband subscriptions per 100 inhabitants, compared to an OECD average of 25. Almost all were fixed-line subscriptions. Telmex’s market share of fixed broadband is 74%. Telmex only sells Internet access in a bundle with fixed-line telecommunication service. The cable companies are increasing their supply of broadband through multi-play bundled services that include telephony and cable TV. Broadband services are not subject to retail price control. Prices in the retail market for fixed broadband services are typically restrained by a number of forces ...

The Economist condensed an OECD chart highlighting the expensive broadband prices.

Credit: The Economist, Let Mexico's moguls battle

Carlos Slim is seeking to address the lack of connectivity in his country. Over the next three years, he plans to dedicate 4 billion peso ($315 million) to address problems with connectivity.

If Mexico wants to invest in a digital future, connectivity, access and affordability are all current problems it needs to address.