Latin American Business

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Latin American Business

• David J. Boggs, Ph.D.
• Infrastructure

Thanks to Steve Swaine for his contributions to
this presentation.
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What is a Communications Infrastructure
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Bolivian One Room Public Call Office
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Infrastructure

• What is it?
• How does it matter to international business?
• Discuss specific industries particularly impacted
  by infrastructure.

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Infrastructure

• Communications
• Data, voice, video (analog and digital)
• Land lines and mobile
• Transportation
• Roads, bridges, shipping, air, rail
• Utilities
• Electricity, water and gas

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Latin American Countries

• Large, expansive Brazil
• Small island nations such as the Dominican
  Republic
• Small, Central American countries
• Medium-sized Venezuela
• Mega-cities and rural

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Latin American Infrastructure

• Underdeveloped relative to USA/Japan/Europe
• Traditionally government owned and operated
• Substantial privatization in the past 20 years
• Substantial USA and European FDI particularly in
  telecommunications

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Infrastructure Developments

• Toll roads in Mexico
• Shipping competition
• Gas and oil pipelines across the Andes
• Air travel to USA slowed by Homeland Security Act

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Miami International Airport (MIA)

• MIA is the 1 Airport in the US for international
  cargo
• Main connecting Airport in the US for cargo and
  passengers for Latin America
• In 2001 MIAs total trade value with Latin
  America totaled 22.8 Billion
• In 2001 total trade by weight with Latin America
  was 779,701 Tons

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Telecommunications

• Traditionally a government monopoly
• Motivations for privatization
• Money-losing
• Technological advancements
• Investors (see page 134)
• Telefonica, France Telecom, GTE, ATT
• Typical transition
• 7-10 years of regulated monopoly followed by open
  competition

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Diverse Telecom Investors
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Evolution of Telecom Industry
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Foreign Direct Investment
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Latin American Communications (2001)
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Communications/100 People
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Exhibit 3 - Worldwide Telecommunications Market
Revenue by Region, 2001 and 2006
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The Last Mile Problem
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Unknown (2002) World Telecommunication
Development Report 2002 Reinventing Telecoms
International Telecommunication Union (ITU) www
document http//www.itu.int/ITU-D/ict/publication
s/wtdr_02/material/WTDR02-Sum_E.pdf (accessed
March 2003).
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Exhibit 6 - Online Language Populations (Sept.
2002)

• Unknown (2002) Global Internet Statistics (by
  Language) Global Reach www document
  http//glreach.com/globstats/

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Exhibit 7 Comparative Latin America
Communications Data Source Compiled from World
Bank, International Trade Administration, CIA
Factbook and ITU data
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Cultural Issues

• Argentines prefer to meet face-to-face. They
  prefer an opportunity to assess a new
  acquaintance in person, which proves difficult
  over the phone.
• Because so much of doing business in Brazil
  hinges on personal relationships and one-on-one
  contact, it is unwise to overuse communications
  technologies.
• In a culture Costa Rica where relationships
  are key, face-to-face contact is always
  preferable over email or telephone whenever
  possible.
• Venezuelans prefer to do business in person
  rather than on the phone.

Source www.GlobeSmart.com
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Communications Occurs Between PEOPLE
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