Page 58 - SAMENA Trends - January 2020

ARTICLE SAMENA TRENDS

Figure 1: Economic impact of broadband worldwide, 2010-2017 the benefits of being connected, often
because of limited awareness, cultural
impediments or limited relevant digital
content; or because they are illiterate and
too poor to afford even the most basic of
Internet packages and devices. Existing
inequalities in terms of income and
education, particularly prominent among
women, and other factors exacerbate the
problem. Thus, funding is a crucial issue to
address – both in terms of infrastructure
and in terms of meaningful engagement
with the Internet and digital economy
where coverage is available.

This article briefly looks at the rationale
for broadband, why current funding and
investment approaches are failing and why
they cause tensions with new cross-border
business models employed by different
Note: Values expressed as impact on GDP of 1 per cent increase in broadband penetration digital ecosystem stakeholders, and the
Source: ITU research need for new funding and investment
approaches.
Network operators traditionally, and are uneconomical to cover with broadband
other industry players more recently and often other basic infrastructure The common consensus
have undertaken considerable efforts in such as electricity or transport. For
expanding infrastructure and services. these a funding gap exists. The common is that the traditional
However, to date 47% of the world’s consensus is that the traditional business business models of
population is still offline, with the majority models of telecoms services, often telecoms services, often
located in Africa and Asia-Pacific, that limited to revenue-cost recovery, simply
cannot participate and share in the benefits do not result in an economically viable limited to revenue-cost
that the digital revolution brings, thereby opportunity to connect the unconnected. recovery, simply do not
impeding digital transformation. Moreover, consumer adoption,
accessibility and affordability are still result in an economically
The reasons for being offline or for limited critical challenges, consequently impeding viable opportunity to
Internet use are manifold: about 1 billion take-up of service, revenue generation and
still do not have access because they live return on investments: About 2.7 billion connect the unconnected.
in remote or difficult-to-reach areas that that are within coverage range do not see
Broadband access and connectivity as the
Figure 2: Percentage of the Population not using the Internet 2019*, ITU enabler of the economy
Broadband networks are an increasingly
integral part of the economy, which, as
the OECD termed it in its Final Report
2015 “Addressing the Tax Challenges of
the Digital Economy”, has become the
digitalized economy that can no longer
be ring-fenced. Broadband networks
are the fundament that can facilitate
the development of new inventions,
new and improved goods and services,
new processes, new business models,
and increase competitiveness and
flexibility in the economy. More generally,
broadband networks and broadband
connectivity can enable the scaling and
improved performance of ICTs (and 4IR
Note: * ITU estimate
Source: ITU

58 JANUARY 2020