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    In Peru, Internet Strengthens Civil Society


    Best Practice
    © International Trade Centre, International Trade Forum - Issue 3/2000

    "Independent of income levels, more people have been able to enjoy access to what had previously been perceived as a status symbol. RCP has contributed to strengthening civil society."

    Red Científica Peruana (RCP - Peruvian scientific network) is a non-profit organization set up in 1991 to develop the Internet in Peru. RCP works in partnership with 43 institutions. As the first Internet service provider in Peru, RCP provided computer training to over 50,000 people in Internet cafés, each with 20 personal computers. Based on a cooperative model, RCP established 680 public Internet cafés across the country, providing Internet access at low cost to both urban and rural communities. RCP holds around 50% of the Internet market in Peru. Its sales in 1999 were US$ 6 million.

    During its e-commerce brainstorming meeting (July 2000), ITC's Emmanuel Barreto, an Internet and cybercafé specialist, interviewed RCP chief executive officer José Soriano.

    Q. What does the Internet mean to you?

    A. The Internet is a new paradigm, and we have based 100% of our business upon it. As a company, RCP set out to fill tele-communications and information gaps. Using new technologies, the aim was to provide access in areas of the country where people were least served. We moved quickly from telephony to the Internet, which became the centre of our strategy in the early stages of our growth.

    Q. How does RCP use the Internet?

    A. We started by looking at Peru's social and economic situation. We could not draw from the predominant model that is used for Internet development and Internet cultural literacy. In most developed countries, the Internet began in universities, then became commercialized, and gradually extended its reach into society. In Peru, the Internet started being used first among intellectuals and well-to-do individuals. RCP's approach to building Internet customers was bottom-up: it focused on the development of Internet cafés and community centres, in order to attract and be of use to the population at large.

    The first attempt was based on leased lines from universities, not dial-up, because of a lack of telecommunications infrastructure. We wanted to be able to reach all Peruvians, both inside and outside Peru. Leasing was better suited for low price and income levels. However, the approach had its drawbacks, and RCP eventually decided to use dial-up. The lack of telephones and computers was a constraint, so we had the idea of setting up the Internet cafés. The "cafés" do not have coffee; they are known in Peru as cabinas públicas, or public booths, based on the idea that Internet access should be available from public booths, just as phone services are. In 1993, the first e-mail was sent from a booth installed by RCP.

    From 1991 to 1995, RCP enjoyed 2,096% growth in services and a 300% increase in the number of users. The tremendous success was unexpected. It unleashed greater creativity. From a cooperative-based non-profit organization, we moved into more commercial areas. RCP remains a non-profit organization with a commercial attitude. Our annual profit rate has been between 21% and 23% during the past ten years, all of which has been re-invested. We formed a company, called Infoductos y Telefónicas del Perú, of which RCP owns 48%. This allowed us to increase the scope of investment opportunities, which had been limited by our NGO status.

    We also created "community centres" to bring companies and individuals to the new age of information technology. These educational centres help communities learn how to use the Internet, and to use hardware and different types of software. We knew that without that knowledge, our people and the business community would not survive in the new world.

    Q. What have been the three biggest constraints faced by your organization while implementing its strategy?

    A. First, lack of Internet knowledge and the need to create what I call "critical mass". Second, legislation and the regulatory framework. Third, lack of start-up capital.

    Q. How did RCP address the main constraint - lack of knowledge?

    A. Through a dual-track, integrated strategy for communication and information. Both communications channels and information content needed development. The strategy was directed to two target groups: people used to working with information and the broader public. The question of building "critical mass" was addressed first by working with people used to information. Reporters, librarians, multimedia experts and others were trained to build public opinion. The second group is composed of the public at large. This public opinion work helped get people interested in new technologies, and our Internet cafés made the technologies accessible.

    The next step was to build local capacity, through four steps:

    • Providing a technical base. Providing the technical knowledge required to run a community centre, including hardware.
    • Developing relevant information. Information in our countries is not collected systematically, and not given enough importance. Work was required to create awareness about the need for information. Peruvian small businesses, for example, traditionally use word-of-mouth and concentrate their efforts in local neighbourhoods. They have not been used to using the Internet for business promotion and other needs. Brazil, in contrast, has more of an information culture related to the Internet; for example, consumers can use the Internet to compare prices of consumer goods in grocery stores.
    • Applying appropriate technical tools, and ensuring Spanish translation. E-mail, FTP, HTML, and other software, e.g. for accounting: these are the instruments needed to build interfaces. In addition, RCP translated into Spanish all major user manuals, and made them available for the centres.
    • Developing business applications, such as virtual communities and store fronts. In the first year, we trained 60,000 people countrywide.

    Putting these efforts together, we started to tackle the technical problems of our country. The organizational constraint changed once there was a better understanding of the technology and the importance of information. We work towards making companies more efficient and competitive through the use of computer-based tools. In the end, independent of income levels, more people have been able to enjoy access to what had previously been perceived as a status symbol. RCP has contributed to strengthening civil society.

    Q. How did RCP address the constraints related to legislation and regulations?

    A. It has been a challenge to help create the understanding to set up legislation that is conducive to creating a digital environment. The questions of legislation and regulation, however, are affecting countries around the world. There is no right answer. It does help, however, that the Internet is universally accepted.

    Q. How did RCP deal with the lack of capital?

    A. Profits were re-invested. The number of people we served with the installation of public booths and community centres increased geometrically, and there are now 680 of our Internet cafés in Peru. In eight years, RCP's market value has reached US$ 30 million. This provides its commercial arm with the collateral to raise money for micro-credits on international markets. Other countries in Latin America and elsewhere have contacted us to install the same structure, and the model has been used by the World Bank's InfoDev programme, by the International Telecommunications Union and by the Canadian government's Acacia programme, which concentrates on Internet development for several African countries.

    José Soriano studied sociology in Argentina, and has a doctorate in political science from the Haute Ecole d'Etudes Politiques in Paris. Before founding RCP, he worked as an editorial commentator for newspapers and radios in Argentina.

    Emmanuel Barreto is ITC's Associate Trade Promotion Adviser for the South-South Trade Promotion Programme.

    See also ITC's Executive Forum web site