Globally, more than 1 billion broadband subscriptions exist. By 2013, the number of broadband subscriptions (both wireline and wireless) is expected to exceed 3 billion. Some countries, such as Singapore, already have a combined fixed and mobile broadband penetration rate in excess of 100 per 100 inhabitants. But broadband is spread unevenly, with the European Union and North American countries together contain about half of global subscribers, while South Asia and Sub-Saharan Africa contain less than 3 percent.
Broadband technology significantly affects how people live and work. It is a key driver of economic growth and national competitiveness, and can greatly contribute to social and cultural development.
Studies have found that in low-and middle-income countries every 10% increase in broadband penetration accelerates economic growth by 1.38%, and can boost a country’s GDP from 0.1% to 1.4%, more than any other telecommunications services.
It also leads to a higher efficiency and productivity growth. An example of this would be the eChoupals, which are village Internet kiosks run by local entrepreneurs in rural India, who provide futures’ price information to farmers and enable them to sell their produce directly to companies, bypassing the middlemen and wholesale market yards. This overcomes the gross inefficiencies in the India’s markets, and India’s low productivity and wastage in production and distribution.
Developing other elements of the Broadband system, like the growth of internet-related services and applications create jobs, new business, and fosters innovation.
It connects the people, businesses and government, hence facilitating social interaction. It is a great way to diffuse information, thus supporting good governance – helps in making a government more accountable / transparent, and can be instrumental in rooting out corruption. Broadband networks are increasingly used to deliver public services like health care, electronic voting, and financial services. Studies have shown that broadband services are critical for school research, health information and online video services, thus playing a big part in improving the education system.
Building Blocks for a Broadband Network:
No one strategy fits all. The local political, economic, social and cultural environment impact the policies and their impact. But based on the lessons learned from what has and has not worked in various countries, the governments need to do the following 3 things when it comes to building a broadband network:
1) Be Flexible:
Governments have to be real and practical, rather than idealistic, in their developing their broadband strategies. Moreover, the governments should remain alert to changing technologies and business models, and should be flexible in implementing them
For example, in the United States, to connect the 7 million unconnected, focusing on providing wired high-speed 100 Mb/s broadband access to all would be an ideal but a very inefficient solution. Instead, a need-based speed implementation, by using wireless technology like Wi-MAX, in these unconnected rural areas, is the right way to go.
2) Promote Competition:
Competition is critical to successful broadband market promotion. Allowing more participants in the market allows further innovation in service offering and technologies, fostering competition and bringing the prices down. Apart from implementing policies and regulations to foster competition, the public-private sector partnership is critical – in sharing financial, technical, and operational risks, and gains. In connecting the high-cost, low revenue, unconnected rural areas, the government should provide incentives (example – tax breaks) and subsidies. The subsidies should be company or technology agnostic. A reverse auction can be held with all the companies interested in investing, and let the market set the price.
3) Improve Adoptability to Facilitate Demand:
Just deploying broadband is not enough. A diffusion-based strategy that takes into account the needs, culture and knowledge base is needed. Adoptability of broadband is a major issue, and should not be ignored. There are two kinds of policies the government can implement to improve demand:
3a) Demand Side Promotion Policies:
Promote digital literacy by providing training on how to use computers and the internet. Distribute low-cost devices and terminals by providing loans, tax-breaks, or by subsidizing computers for poor households. Support the development of online content and media, that is locally relevant and in local languages. Encourage small and medium-size enterprises to use broadband and e-commerce.
3b) Supply Side Promotion Policies:
Reduce legal entry barriers into broadband markets – the government should also manage their radio spectrum appropriately to reduce entry barriers, promote competition and enable the introduction of innovative technologies. Provide government support for national backbone construction, and take aggressive steps to reduce investment costs for the internet service providers by establishing legal grounds for open access to the communications infrastructure.
To conclude, broadband matters. And it has become an essential tool for the economic, social and cultural development of a country. Hence, it is critical that countries make universal broadband implementation a priority, and develop an implementation strategy that focuses on diffusing the broadband technology – crucial for reaping maximum benefits, and return on investment.