Buenos Aires: Telecommunications hub

The big city on the right bank of the Rio de la Plata has many nicknames: the Queen of the Plata, Capital City of Tango, the New York City of the Southern Cone, or simply the Port. Call it what you will, Buenos Aires, Argentina, is among the world’s biggest capitals and busiest IT and telecommunications centres.

Its small microcentro, the financial and corporate centre, houses the headquarters of most of the companies that operate in the country, including the top IT vendors. The close quarters fuel the city’s torrid economic activity.

“This makes things simpler. You’re walking distance from your most important clients and suppliers,” says Adrian Richeri, Novell’s territory manager for Argentina, who estimates that 80 per cent of all big-business activity in Argentina is conducted in this microcentre.

Greater Buenos Aires, including suburbs, has about 12 million people, or about one-third of Argentina’s population. The actual city, which comprises the Federal District, has about three million people. According to official decree 557 of the City of Buenos Aires, the 1999 yearly gross per capita income is US$26,830. Other reports cite the figure at US$20,600.

The process of opening up the country’s telecommunications market in the past 10 years has yielded a solid telecommunications infrastructure and continues to attract heavy investments. In July 2000, AT&T Corp. announced it would invest US$500 million in its Argentina operations between 2001 and 2004.

Some believe that Buenos Aires has the best telecommunications infrastructure of any Latin American city. “This fact, along with the availability of first-rate professionals, draws the interest of corporations that are looking for the best place for their headquarters in Latin America,” says Nacho Mazzini, Silicon Graphics’ general manager for Argentina, Chile, and Uruguay. Many IT vendors choose Buenos Aires to manage South America’s southern cone, which includes Argentina, Bolivia, Chile, Paraguay, Peru, and Uruguay.

Entrepreneurship is fostered by the high educational level of the city, which has more than 10 public and private universities and many other college-level institutions.

“The quality of education in Buenos Aires is very high compared with the rest of the region, especially at the university level,” says Andreas Broner, an analyst at The Yankee Group in Buenos Aires.

This is why Buenos Aires became the birthplace of many of the region’s dot-coms between 1998 and 2000, observers say. These businesses were often founded by Argentines who had studied in the United States and thus witnessed the heady early days of the Internet frenzy firsthand.

Although a significant number of the dot-coms founded in Buenos Aires are now in trouble, due to the woes affecting the Internet sector worldwide, many of the leading dot-coms in Latin America’s Internet market hail from Buenos Aires, including Patagon.com International, DeRemate.com, Salutia.com, El Sitio, Officenet, and MercadoLibre.

“Our commercial offices for Latin America are in Miami,” says Brian Gahan, COO of Cybrel Digital Entertainment, founders of the music portal Yeyeye.com. “But Buenos Aires is our editorial and inspiration centre.”

A rebirth

The qualities that made the city a hotbed of dot-com activity are part of the city fabric, and they could yield its rebirth, another analyst says. Buenos Aires is a good city for testing new technologies. “Argentines are cholulos ,” Novell’s Adrian Richeri says. They enjoy showing off the latest cellular phones and the most “in” technologies. Buenos Aires also has the highest cable TV and cable-modem penetration in Latin America, according to reports from trade associations.

(Hector Calabia, IDG News Service, Buenos Aires Bureau, An Infoworld affiliate, with additional reporting by Juan Carlos Perez)