12-14 July 2000
Mr José Soriano is Chief Executive Officer, Red Científica Peruana – Internet Peru. A sociologist from Universidad Nacional de Buenos Aires (Argentina), he holds a PhD in Political Sciences from the Haute Ecole de ètudes Politiques of Paris (France). From 1985 to 1990 he worked as editorialist for several newspapers and radio stations in Argentina. In 1991 he fundedRed Cientifica Peruana (RCP), a non-for-profit organization established in partnership with 43 institutions to develop the Internet in Peru. RCP was the first ISP in Peru, and during the first year of operations RCP provided computer training to more than 50,000 people in an Internet center with 20 PCs. Based on a cooperative model, RCP has established 680 public Internet kiosks distributed across the country, providing Internet access at low costs to urban and rural communities. RCP holds around 50% of the Internet market in Peru, and its sales in 1999 were calculated in US$6 million.
A new paradigm
Q: What does the Internet mean to you?
Soriano: The Internet is a new paradigm, and provides us with 100% of our business model. As a company, RCP started with the objective to fill a telecommunications gap. The objective was to provide access to telephones and faxes in areas of the country where people were least served. Later the Internet came to the centre stage of our objective.
Q: What is Red Científica Peruana and how does it make use of the Internet?
Soriano: I will start from the beginning. The idea started from looking at Peru’s reality. Our business model did not follow the academic model which is used in the United States and copied worldwide. The top-down approach commonly used there was turned upside-down by RCP, from public cabins and community centres to commercial systems.
To deal with the problems facing our country in particular, RCP had to be autonomous, self-financing and of national scope. The first attempt was based on leased lines not dial-up. Leasing was better suited for low price and income levels. However, it did not work. Universities controlled the system and it was difficult for us to make use of it. This forced RCP to go to dial-up. The lack of telephones and computers was a constraint, so we had the idea of setting up “public cabins”. In 1991, the first e-mail was sent from a cabin installed by RCP.
From 1991 to 1995, RCP enjoyed a 2096% growth and 300% increase in number of users. The tremendous success was unexpected. It unleashed greater creativity. From public cabins, we moved into more commercial areas. RCP is a non-profit organization with a commercial attitude. Our profit rate has been between 21-23 % during the past 10 years, which is all re-invested. One of the investments was to form a company called Infoductos, of which RCP owns 48%. The objective was to multiply the initiative and shape it into a more commercialized service. “Community Centers” were created to bring companies and individuals to the new age of information technology. We knew that without that knowledge, our people and the business community would not survive in the new world.
Q: What are the 3 biggest constraints faced by your organization while implementing its strategy?
Soriano: 1. Lack of knowledge and the need to create what I call “critical mass” ; 2. Legislation and regulatory framework; 3. Lack of start-up capital.
Q: How did RCP address the constraint number 1 — lack of knowledge?
Soriano: Constraint number 1 has two elements: communication and information. In addition, there are two separate groups to educate. The question of building “critical mass” was addressed first by working with people used to information. Reporters, librarians, multimedia experts and so on were all trained to build public opinion. The second group is composed of common citizens. The work done on public opinion helped to get people interested in the new technologies, and our public cabins brought these to them.
The next step was to build local capacity. There are four layers in RCP’s strategy towards building up capacity. The first is technical, providing the technical knowledge required to run a community center, including hardware. The second layer is the construction of relevant information. Information in our countries are not available, not well collected, and not given enough importance. Work was required to create awareness about the need for information. The third layer is tools, such as e-mail, FTP, HTML, and other software, e.g. for accounting. These are the instruments needed to build interfaces. In addition, RCP translated into Spanish all the major utilities for the centers. The last layer is applications, such as virtual communities and store fronts. In the first year, we trained 60,000 people countrywide in various layers.
Putting all of these efforts together, we started to tackle the technical problems of our country. The organizational constraint changed once there was better understanding of the technology and the importance of information. We work towards making companies more efficient and competitive through the use of computer-based tools. In the end, everyone, independent of income levels, was able to enjoy an access which before had been a symbol of status. Democratically, RCP has contributed to strengthening civil society.
Q: How did RCP address the constraint number 2 — legislation, etc?
Soriano: Constraint number 2 forced us to constantly fight the government and monopolies. In a functioning civil society, people are more aware of what is needed and can place a check on the government. And the Internet is universally accepted. Also, RCP being financially independent helped to remove some pressure which otherwise could have been damaging.
Q: How did RCP address the constraint number 3 — lack of capital?
Soriano: Profits were re-invested. The number of people we served with the installation of public cabins and community centers increased geometrically. In eight years, RCP market capitalization has reached US$ 30 millio. This provides its commercial arm with the collateral to raise money for micro-credits on international markets. Today, there are over 600 cabins in the country. Other countries in Latin America and elsewhere have contacted us to install the same structure, and the model has been used by InfoDev (World Bank), ITU and Acacia.