Nicaragua’s great technological leap forward

Technology is—slowly but surely—helping to level the developmental playing field in Nicaragua. Second in a two-part series on the future of Nicaragua’s telecom sector

Sometimes revolutions need a little nudge to get started. In Nicaragua, the Internet revolution needed a shove.

Nicaragua has one of the lowest Internet connectivity rates in the hemisphere—around 11%. But that’s not because Nicaraguans are not Luddites. On the contrary, says CLARO’s operations director Roberto Sansón, Nicaraguans have embraced technology and shown no fear of the digital revolution.

They just needed help purchasing a vehicle before pulling onto the information superhighway.

“I realized that one of the obstacles that people faced to Internet access is that they don’t have money to buy a computer,” Sansón says. “People wanted to buy Internet service, but didn’t have money for a computer. So CLARO financed the computers, because if we didn’t do that, the market here would never grow.”

Two years after CLARO started its “mini laptop” promotion to provide new clients with a computer to go with their new Internet service, the telecom company has become the country’s leading importer of computers, providing an average of 2,000 laptops a month to Nicaraguan households. Many of those clients are using those laptops to connect to the Internet for the first time.

“We are not doing this to be Mother Teresa,” Sansón says; after all, each laptop doled out means a new client that the company didn’t have before. But at the same time, he says, the company found that in order for the market to the Internet market to grow, the conditions had to be created. And the end effect is positive for development because it puts new technology into the hands of lower-income families that otherwise wouldn’t have access. 

School kids on Ometepe Island get an XO educational laptop from the Zamora Terán Foundation (GRAPHOS Producciones)

Other companies and foundations are also working to bridge Nicaragua’s digital divide. The Zamora Terán Foundation, a nonprofit group founded as part of LAFISE BANCENTRO’s corporate responsibility efforts, has endeavored to provide special educational laptops to all elementary school students in the country by 2015 in an effort to boost primary school enrollment, reduce poverty and close the digital gap.

Since 2009, the Zamora Terán Foundation has implemented its “One Laptop Per Child Program” in 12 departments of Nicaragua. To date, the foundation has handed out a total of 26,000 XO laptops (restricted use educational laptops) throughout Nicaragua, in communities in Managua, Masaya, Chontales, Carazo, León, Boaco, Chinandega, Matagalpa, Rivas, the RAAN and the RAAS. Their goal is to handout 500,000 laptops in the next three years to help Nicaragua meet its Millennium Development Goals.

Making Internet Accessible

In the past few years, 3G technology has become so pervasive in Nicaragua that CLARO says they are now more of an Internet company than a phone and cable TV provider.

“Our strategy is totally dedicated to Internet,” Sansón says. “We are more of an Internet company than a cellphone company because the cellphone has stopped being just an apparatus to talk. Now people want to use their phones to be connected to the Internet. So the future of Nicaragua as a country has to be heading towards Internet and the access to Internet.”

So far it’s working, Sansón says. Thanks to prepay Internet plans that cost only 10 córdobas an hour, more and more Nicaraguans are using their cellphones to go online—at least sporadically. Sansón says that by the end of 2012, Nicaragua will have more people connecting to the Internet through their cellphone than on computers.

“It used to be trendy to talk about closing the digital divide as a matter of social responsibility, but now it’s a real need for the day-to-day work operations of all industries,” Sansón says.

Playing Leapfrog

Though Nicaragua showed up late to the modern era (indeed some parts of the country still haven’t gotten the invite), Nicaraguans have been amazingly receptive to new technologies, allowing the country to make up lost ground quickly—or leapfrog over normal developmental phases that other countries typically go through.

The first “leapfrog” moment was in telephone use. Nicaraguans, most of whom have never had a landline telephone connection in their house, have skipped that developmental step in the past few years and gone straight to cellphones.
The second technological leapfrog is happening now, as Nicaraguans—most of whom never have never owned a computer—are jumping right to 3G technology on their cellphones.

Sansón says he think the stage is similarly set for Nicaraguans to soon make the next leap: to digital currency.

Though the concept and application of electronic money is still inchoate in the developing world, Sansón says Nicaraguans will probably be ready for that technology as soon as it’s ready for Nicaragua.

“I am convinced that Nicaragua is more than ready to make the leap, and will do so faster than other countries,” the CLARO chief said. “The level of banking in the country is low, so people will make that leap right to electronic money.”

Sansón’s conviction is based on Nicaraguans’ quick and easy adoption of electronic “recargas,” or crediting prepaid phone accounts by phone. Five years ago, virtually everyone in Nicaragua charged their phone accounts by buying scratch tickets in different denominations. Today, it’s almost impossible to find scratch tickets because everyone credits their accounts electronically.

“Nicaragua has the most electronic phone charges in all of Latin America—the scratch cards have disappeared here, and that’s not the case in other Latin American countries,” Sansón says. “We have 99% of our prepaid phone users buying their prepay minutes electronically; the second closest country in the region has only 70% electronic charges while 30% of the population uses scratch cards.”

Sansón says that 90% of CLARO’s 3.2 million cellphone users are prepaid customers, and only 10% are on fixed monthly plans—something they are trying to change by making fixed plans more accessible to lower-income households. The average consumption in cellphone use in Nicaragua is $5 a month, he said.

Promoting Innovation

As Nicaraguans embrace smart phones, CLARO wants to tap Nicaraguans’ smarts. The company recently launched a contest in local universities to challenge student designers to develop new smart phone applications that are applicable to the reality of Nicaragua.

“We have 50 students participating in the contest—many more than we expected, and their ideas so far have been spectacular,” Sansón says. “Some of the ideas are really simple, because they don’t need to be complicated apps to apply to people’s lives and become useful tools that people will actually use.”

Though the technological revolution got a late start in Nicaragua, the country is making up ground quickly. And though the road ahead is still long, as Nicaragua moves further into the technological revolution, it’s helping the country to level the developmental playing a field that has been tilted against Nicaragua for decades.

“Technology is like a great democracy that allows people to start doing new things,” Sansón says. “Ideas have no geographic boundaries, and technology allows them to grow.”

Read part I in this series here.

 

 

 

 

 

 

 

 

 

  • M Ortega

    Too bad Claro doesn’t think my barrio is important enough to put in cables and wiring so we even have the option of cable and internet!! We’ve been asking them to do it now for over 1 year and their response was: “The people there are too poor and won’t pay the bill if we give them cable and internet!” (and there’s no reception there for the wireless option either) … and we live right in Granada!!

  • Carla Chamorro

    The service Claro provides is plain garbage, useless!

  • Yves Chaix

    El Sr Sanson no identifica una de las mayores causas de la carencia de avance en el uso del Internet, que es la falta de contenido. Hay dos areas que pueden proveer suficiente contenido para actuar como motor de desarrollo del Internet, una es el gobierno electrónico y la otra es el comercio electrónico. Fuera de estas dos areas, solo quedan las redes sociales, que en realidad proveen una cierta motivación, pero no agregan valor.
    El gobierno electrónico escapa al control de Claro, particularmente considerando que todos los gobiernos hasta el actual han mostrado alergia al tema, para no decir total desconocimiento. Entonces, solo queda el tema del comercio electrónico. Puesto que una fracción muy pequeña de la población accede al Internet, el comercio electrónico se ha mantenido ausente de este esfuerzo. Lo que yo propongo es enfocar las acciones de promocion hacia el encadenamiento de la cadena de suministros para las empresas, y en particular, para las PYME.
    No soy fabricante ni vendedor de ERP.
    Atentamente.

    • Ternot MacRenato

      Yves Porque los usuarios de Claro no pueden comunicarse con los de Movistar, sin tener que usar sus bonos? Es una gran estafa al público. Estoy de acuerdo con los comentarios de Carla Chamorro y Karle. Yves, buscame estoy en Facebook, Yo hare lo mismo

  • Karle

    Craptops to go with their crappy service so they can make more money. Meanwhile they don’t even pretend to give a shit once you’ve bought your product or signed your contract. And you thought customer service from your phone/cable/internet provider in the U.S. was bad! Ja!

  • Nero

    Recently I had a problem with my Claro internet. It took several hours of phone calls, dealing with an incompetent staff. When the repair morons finally came around they couldn’t figure out the problem. That took several tries as well. If a new provider comes around Id surely drop Claro like a hot turd.