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Saturday, February 10, 2001

Mexico Slowly Getting Wired

According to the recently released eLatin America Report, Mexico is second among all Latin American countries in internet users with 1.5 million. However, future internet growth will be slowed by poverty and infrastructure development constraints within the technology sector.

The report reveals that although 6.4 million Mexicans will be actively using the internet by 2004, the internet penetration rate will remain in single digits for the next few years -- rising from 2.2% in 2000 to 8.6% in 2004. Similarly, Mexico's share of the region's internet market will remain unchanged through 2004, hovering close to 15%.

"Mexico's poorly developed infrastructure is a major impediment to growth of its internet market," said Noah Elkin, eMarketer senior analyst. "Poverty and inequality remain significant barriers to internet growth in Mexico."

With its GDP (Gross Domestic Product) per capita of $5,452 (50% higher than Brazil's) and a population of more than 100 million, Mexico represents the second largest internet market in the region behind Brazil. Mexico is one of three countries, along with Brazil and Argentina, which account for approximately 65% of the region's 9.9 million internet users, with Brazil claiming 3.9 million, Mexico with 1.5 million and Argentina with 1 million.

Like Brazil, Mexico's population is predominantly urban, with 74% of its people residing in cities. Approximately 43% of Mexicans live on a subsistence income, while 20% of the population controls nearly 60% of the country's wealth.

Key Report findings about Mexico:
- With a GDP of $866 billion, Mexico has the second largest economy in Latin America and is entering its sixth year of economic expansion.
- Uneven income distribution, combined with a poorly developed, overburdened telecommunications infrastructure, has resulted in a low internet penetration rate of 2.2%.
- The internet penetration rate will grow to 8.6% by 2004 as telephone operators complete their infrastructure upgrades.

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