Argentina to Finance 1 Million Home PCs

BUENOS AIRES, ARGENTINA (05/30/2000) - The Argentine Government is planning to provide financing for 1 million entry level, brand-name computers for home users.

The news was confirmed in an interview with Ricardo Camperos, coordinator of the Electronic Commerce Program of the Argentine Secretariat for Science, Technology and Productive Innovation.

The project is being fine-tuned by the Secretariat for Science, Technology and Productive Innovation, the Secretariat for Communications, and the state-owned bank, Banco de la Nación Argentina, Camperos said. The outline of the plan has already been presented to Argentine President Fernando De la Rúa and probably will be officially announced next month.

"We still do not know the exact date for the announcement; it may be for Father's Day (June 18 in Argentina) for its emotional significance, but that's just a matter of marketing," Camperos added.

The plan is aimed at lower middle class and working class households.

Basically, it will allow any federal, provincial or town council employee to buy a computer costing between US$800 and $1,000 in installments from $28 monthly. The installments will be deducted from the employees' pay slip every month, Camperos said.

The intent is to help people who have either restricted credit or no credit so that they can buy their own computer and have Internet access.

"It is not a restriction," Camperos said of the employment requirement. "It is a formula for giving access to persons that otherwise would not be able to get credit. For the rest of the population, the normal financing options remain open."

All computers will be furnished with an operating system, modem and pre-configured access to an ISP (Internet service provider).

Camperos confirmed that the Banco de la Nación already has a $1 billion credit line for the project. The money will be distributed at an 18 percent annual interest rate for financing PC purchases in 24 to 36 installments. The most expensive computer and the shortest repayment period will result in installments of $50 monthly.

Government officials have held negotiations with computer vendors and ISPs for furnishing both the hardware and the Internet accounts necessary for the plan to work. Terms of Internet access have yet to be decided. Possibilities include free access with a limited monthly hours quota or a low fee for unlimited usage. Argentine Web users, however, pay telephone connection rates per minutes used, so the charges for that can be quite expensive.

According to a local representative of market researcher International Data Corp. (IDC), it is difficult to assess the true number of computers in Argentina. According to the usual estimates, there are between 2 million and 2.5 million personal computers in the country. Of these, about 60 percent are already connected to the Internet. This installed base, however, belongs to businesses and households with higher incomes. There is a large untapped market for households with lower incomes that, until now, have had no access to credit lines for computer purchases.

The additional 1 million Argentine Internet accounts that the government plan would create in about two years is expected to lead to a substantial reduction in connection fees. As of January this year, there were about 470,000 Internet accounts in homes and businesses, serving about 770,000 people in Argentina, according to data from Prince & Cooke. That amount is about 1 percent of the Argentine population.

At first, it was announced that the computers in the deal would be available at major retailers and supermarkets, but Camperos said that isn't the case because vendors must guarantee that computers will reach "even the most remote and isolated towns in Argentina."

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