Cost is considered a big obstacle to the growth of Internet use in Latin America, so Internet service provider IFX Corp. has decided to offer free access to the 'Net in the region, the company announced this week.
"We feel the real revenue and sales opportunities are not in the core subscription service, but in advertisements, e-commerce and other value-added services," said Joel Eidelstein, the company's president, in an interview today.
Thus, the company wants to assemble a critical mass of subcribers -- 2 million by 2001 -- and make them regular visitors to a Web portal IFX plans to launch simultaneously with this free service, Eidelstein said. Along with the free access service, users will get free Web-based e-mail accounts, which will be hosted at the portal. The site also will feature local information about the countries where the service is available as well as online shopping, classified advertisements, auctions and a variety of advertising options.
Only 2 percent of Latin America's population -- 9 million people -- is currently online, according to a Jupiter Communications Inc. report issued in November 1999. Another study done by the Boston Consulting Group and released in July 1999 identified the high cost of Internet access as the biggest barrier to Internet use in the region. Factoring in phone charges, Internet service fees and PC cost of ownership, BCG determined that the average cost for a user who logs on for 20 hours per week would be US$42 per month in the U.S., $54 in México, $83 in Brazil and $112 in Argentina. [See "Lat Am Retailers Eye Growing Online Market," July 27, 1999.]IFX plans to begin offering free Internet access in mid-February to users in 100 cities in Argentina, Brazil, Chile, Colombia, El Salvador and México. It later plans to extend the free service to seven other countries in Latin America where the company also operates.
IFX, which already offers Internet access to 13 countries in the region under the brand "Unete," will continue to offer this fee-based service, whose main advantages over the free offer are POP3 e-mail accounts and the ability to access the Internet with a local call when a user is outside his or her regular local calling area.
IFX also will continue to provide other fee-based Internet services, such as dedicated line access and Web site hosting and design. It plans to launch a separate portal for its subscribers who use the company's fee-based services, Eidelstein added.
IFX, based in Miami, can be reached at 1-305-931-7270 or at http://www.ifxcorp.com.