Internet subscriptions on the rise in Latin America

The dot-com collapse hit hard Internet companies focused on Latin America, but it hasn’t stopped people in the region from continuing to sign up for Internet access, according to a new study.

Yankee Group expects narrowband dial-up Internet access subscribers to climb from 25 million at the end of this year to 65 million by 2007, a growth that will be fueled in part by the continued adoption of flat telephone rates for calls to Internet service providers.

Currently, many telephone service providers in the region charge a per-minute fee on calls, including calls placed to Internet service providers to get online. This extra cost discourages Internet users from staying connected too long, but more and more carriers across the region are beginning to drop this per-minute charge on calls placed to ISPs, said William Santana, the Yankee Group analyst who conducted the study.

“The region is moving towards the U.S. model,” he said.

Internet users who don’t have to worry about the per-minute surcharge stay online longer, which in turn leads them to engage in more Internet activities, such as purchasing products and paying more attention to advertisements, Santana said.

Another interesting trend among Internet users in Latin America is the enthusiastic adoption of prepaid cards. Sold through retail businesses, the cards give the user a specific number of access minutes for an upfront fee. The cards don’t require the user to enter into a more formal subscription relationship with a provider involving the monthly payment of a set fee, Santana said.

This prepaid model is proving attractive in Latin America and hasn’t been fully exploited yet, with M