The Evolution of the Internet in Argentina

In Argentina, the TGI Argentina studies have been conducted since 1999.  Within the TGI Argentina studies, the same series of questions have been asked about Intenet usage throughout this time.  This gives an accurate portrayal of the evolution of the Internet in Argentina.  

There are many ways to define who the Internet users are.  A question such as "Are you an Internet user?" may be confusing, as there is no time frame involved.  So an objectively clear question would be something "Have you used the Internet in the last 30 days?"  The numbers for the last five years are shown in the chart below.

(source: TGI Argentina)

The more interesting data are about how Internet has qualitatively changed over time.  The next chart shows the major activities among the Internet users.

The most popular activity on the Internet is email applications, followed by chat room visits.  The Internet is an application with network externality, which is defined as follows:  "Network effects arise when a good is more valuable to a user the more users adopt the same good or compatible ones. Economists refer to this phenomenon as a network externality because when additional consumers join the network of current consumers they have a beneficial "external" impact on the consumers who are already part of the network."  This is interesting as a social phenomenon, but unfortunately it probably does not pay for itself, especially since most people expect email and chat room applications to be free.  The income to sustain the Internet will have to come from e-commerce.  But, from the chart, this is not growing at the pace seen for other applications, with a dip after the financial crisis that exploded at the start of 2002.

(posted by Roland Soong, 11/5/2003)