Q&A  | 

Arancha Diaz Lladó

“Connectivity is our main ally in reducing the digital divide.”

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Arancha Diaz Lladó is Director of Sustainable Innovation at Telefónica. Her role is to incorporate social and environmental impact in Telefónica's DNA to ensure sustainability of the business in the long term. We spoke to her about the digital divide and what Telefónica is doing to tackle the issue.

What are the main risks posed by the growing digital divide?

A growing digital divide is a threat for our social order as it might create a two-tier society– a society where those that have high speed connectivity and access to the internet will grow and develop while those who those that don’t will lag behind.

Access to the Internet has changed the way we work, communicate and access services. It has created new forms of public engagement and economic activity, boosting innovation and entrepreneurship.  It offers opportunities for education, financial inclusion, access to health systems and new types of employment. The internet has radically changed the way humans live and consequently, those that cannot access it risk not being able to participate fully in society.

In brief, with technology continuously  advancing and increasingly present in every aspect of life, the main risk of a growing digital divide is the effect it can have on widening the already deep socio-economic imbalances of our world.

Flexible offers adapted to low-income households could be one solution. What other strategies is the private sector implementing to reduce the digital divide?

In order to get people connected it is necessary to find innovative ways to deploy networks, ensure affordable access, create relevant digital services and equip users with basic digital skills.  Thus, to tackle the digital divide it is key to define an encompassing strategy that addresses the different dimensions of the problem. 

The cornerstone of digital inclusion is infrastructure, that is, the networks and connectivity solutions needed to extend Internet coverage in a sustainable and efficient way. In this, mobile broadband is proving to be a very effective tool to provide infrastructures and connectivity for rural isolated populations: according to GSMA, in 2019, 62 per cent of the population in emerging markets had access to mobile technologies. Also, while ten years ago, only about a third of the mobile subscribers had a mobile internet subscription, today it is more than two thirds who are active mobile internet users. 

In addition to infrastructure deployment, income inequality lies at the core of the barriers to digital inclusion. The pay-as-you-go mobile service, exclusive broadband packages (charge per day) for low-income customers and service packages for small businesses and entrepreneurs are key tools used to support access to telecommunication services to the low income segments of society. 

Affordability is also dependent on taxation of mobile services, which makes final prices more expensive for users, thus affecting penetration levels. The tax burden on telecommunications services must be reasonable and consistent with the positive economic externalities that the industry generates. The tax structure must take into consideration the potential of using tax reductions or exemptions that allow for improved penetration and use of advanced telecommunications services, especially for lower income families.

 

Lack of infrastructure (computers, servers etc.) and lack of education (digital literacy) are two major issues. How can the private and public sector work together to face these challenges?

Public-private dialogue and collaboration are key to addressing the digital divide. One key area that both the public and private sector should address is increasing awareness among consumers of the benefits of Internet usage and steering them away from the perception that the Internet is just a tool for entertainment purposes.  For instance.

governments should promote the implementation of e-government applications that improve efficiency and government transparency, allowing citizens to be better informed about what the government is working on as well as the policies they are trying to implement. Generating relevant local content such as this steers the use of the internet and thus participation in the digital society.

Another key area that requires public-private-civil society collaboration is digital literacy and skills, that is, the set of competencies that allow you to function and participate fully in a digital world.  Students are increasingly considered to be digital natives; able to use technology effectively and easily. However, it is equally important to teach students how to become digital citizens. Most importantly it is also key to ensuring that no one is left behind, especially the elderly generations that were not born in the digital era and lack basic digital competencies.

What is being done to promote connectivity in isolated areas?

Connectivity is our main ally in reducing the digital divide, so we can aid progress in the communities. To move towards this vision, at Telefónica we are rolling out innovative and more efficient networks, investing more than 8.100M euros in networks deployment every year.

However, we realise that this might not be enough. Almost 100 million people are not connected or suffer from poor connectivity in the countries where Telefónica carries on its business, mainly in Latin America. For this reason, we have launched our Internet for All programme which is seeking to reimagine the way networks are designed, deployed, operated, maintained and commercialised, to continue extending our mobile Internet coverage beyond our current reach, mainly in rural and remote regions. 

Telefónica tackles this major challenge with a radically open approach with a focus on minimizing costs to ensure economic sustainability. We have designed a new open business model with a flexible and secure architecture to collaborating with several cross-industry stakeholders: Internet companies, local operators, local entrepreneurs and public administrations. 

Do you think the divide is best tackled at a local, national or international level?

I would say it is better tackled with a combination of the three… It should take into account local realities but also should rely on a national strategy and policies that support local implementations.  International best practices and investment is also key. 

 

 

There isn’t incentive for carriers to go into low-income areas where they may not make as much money. How can telcos balance business concerns with the public interest?

Technological and commercial innovation has been key to expand the frontiers of the market, where it is financially viable to provide services. Still, in low demand areas, the current expected rollout costs usually exceed the expected margin that would be generated from offering services in the area. As a result, the area would remain uncovered in the absence of public funding. Therefore, although we are reinventing the future networks making them more efficient, with disruptive new business models and cheaper breakthrough technologies, we still need governments to provide additional funding to bridge the gap between costs and margins such that the area becomes viable to cover.

Will 5G reduce the digital divide?

The digital divide is not about technology. It is about how we use technology. At Telefonica we aim to make our world more human by connecting lives. Technology, including 5G is just a means to an end. Addressing the digital divide requires a real commitment from both private and public sector to leave no one behind.

How do you see the digital revolution developing over the next decade?

We are in the middle of the fourth industrial revolution. The profound transformation that is taking place in all sectors as a result of this digital revolution, is mainly driven by our sector – Information and Communication Technologies. It comes from the convergence of the global industrial system with the power of advanced computing, data and analytics, low-cost sensing, low cost communication devices and new levels of connectivity or hyper connectivity. 

This transformation has the potential to radically renew and disrupt classical industries, as we know them today: for example, Internet of Things, Big Data or Artificial Intelligence are changing the dynamics of all industries, enabling whole new business models, more efficient industry processes, more sustainable cities, more effective health systems (e-health solutions), and new products and services, among others. All of this is generating a huge value for society and businesses, where billions of devices are already connected, and new ways to take more efficient decisions based on analytics (Big Data and AI) are leading this transformation. 

If we look back in retrospective to 1999, the world we have today is very different in many ways. And the world that we will have in 10 years will even be more radically different. Because there is an accumulation of new technologies that are transforming all the business processes and personal relationships. Just one figure, in 2025 is expected to have more than 100B connections in the world.

However, all these radical changes will come with new challenges and potential inequality risks. We should be very active identifying and minimizing all these challenges. 

Is the future going to be more or less inclusive?

With technology continuously advancing and increasingly present in every aspect of life, there is a clear risk of a growing digital divide that may widen the already deep socio-economic imbalances of our world.  

However, I am optimistic. Although we still have a long way to go, I believe that digitalization will be inclusive and will help humanity tackle the most pressing social and environmental threats. I believe that governments, civil society and the private sector have understood that they must work hand in hand to ensure that we do not create a two-tier world.  The United Nations Sustainable Development Goals are good evidence of this. They have succeeded in mobilizing governments, companies and the civil society towards a shared vision of our future, where information and communication technologies are a means to an end to achieve the goals. 

What is the key to building a more equitable digital society?

To be poised to address digital inequalities. We should be very proactive working on the main pillars that define the digital divide: 

  • Network infrastructure:  infrastructure, networks and connectivity solutions to extend Internet coverage in a sustainable and efficient way to everybody.
  • Affordability: Development of new business models that enable all segments of the population to access our products and services, regardless of their financial resources.
  • Accessibility: grant all groups suffering from some sort of disability, the possibility of accessing the digital world
  • Lack of relevant content and services: to create and adapt content or services to users’ local interests and languages
  • Digital literacy and skills: Facing with lack of skills to access the Internet or to use the necessary devices, in part due to ignorance of the possibilities offered by digital services

What will be the biggest social challenge over the next few years?

Climate change, growing inequalities that lead to social and political unrest, inclusive growth, food security for a growing population, unemployment… The most pressing social and environmental challenges of today are interrelated, and thus I wouldn’t dare choose one.   

Define a relationship among technology and society.

Technology has always augmented human capabilities. It is part of our evolution assisting humans in performing increasingly more complex tasks. 

So far it has been a passive relationship, where humans used technology to perform difficult tasks easier. However the relationship is changing and becoming more interactive. For the first time, technology is taking an active role, working alongside us and directly on our behalf.  The key question thus is whether society is shaping technology or vice-versa.