Pyramid Points - Broadband Demand Stimulation Is Key to Growth
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Broadband Demand Stimulation Is Key to Growth

December 19, 2012

Broadband access and service provision are the focus of most stakeholders in the telecom/ICT ecosystem — from service providers wanting to expand their customer base and increase sources of revenue, to users wanting to benefit from faster and more reliable access and applications anywhere/anytime, and to governments and international institutions wanting to promote broadband platforms that lead to economic and social growth.

As the expansion of 3G and 4G networks across emerging regions illustrates, service providers have made significant commitments and investments to offer better and more efficient networks, to provide new and secure applications and to benefit from capacity-intense service offers. Demand for broadband services continues to increase across regions, and mobile broadband plays a unique role in the access equation because mobile technologies often provide the only means to broadband access in several countries and regions of the emerging south.

Therefore, it is no surprise that several governments and service providers have worked tirelessly to improve spectrum management, licensing processes, and to make desirable spectrum available for the provision of mobile broadband services. But investment in infrastructure, licenses and spectrum are not the only elements that make broadband access and use a success. In fact, it is the level of demand for broadband connectivity and for broadband-based services and applications that will determine the speed of adoption of such services and the extent of their use. Several variables determine the level of demand, including incomes, quality of service in the geographic area, availability of content (including localized and relevant content), quality and prices of devices, literacy rates, cultural and social patterns, among other factors. But one thing is clear: When the technology and relevant services are available, users are willing to spend a considerable amount of their incomes on connectivity and services, including applications that are relevant to their productive activities. So what strategies should be implemented across emerging markets to ensure that demand for broadband access remains strong and that the use of applications and services that are made possible through broadband became a reality?

One key strategy for governments, service providers, device manufacturers and other ICT players has been to focus on the development of a digitally literate consumer who is able to afford and use ICT now and in the long run. Such strategies aim to establish a captive yet sophisticated ICT user-base that will in turn demand further innovation in services and applications in the sector. Demand stimulation strategies generally include robust ICT awareness and education campaigns, policies focused on affordable prices for services and devices, and a number of efforts to promote demand for and use of ICT services (e.g., targeted marketing campaigns and offers, localized services and content, e-government services, and availability of multiple devices with different capabilities and at different price levels). Taken together and in isolation, these strategies contribute to the development and growth of the sector.

Exhibit: Sample demand strategies

Sample Demand Stimulation Strategies

Source: Pyramid Research

Again, this is especially true in terms of the opportunities facilitated by mobile broadband devices, as these continue to be the key communications and productivity tool in the knowledge society. Indeed, the use and impact of ICT is much greater than connectivity alone. The experience with mobile applications in agriculture, health, education, SME management, finance and banking, among other sectors, clearly illustrates the potential impact of mobile broadband in economic growth and development, but also provides a glimpse to the myriad of opportunities the industry has ahead. As innovation in ICT continues to increase, we can only imagine the multiple externalities and opportunities that can arrive from it. South Korea, Estonia, Malaysia, Chile and Colombia provide examples of countries that have cultivated visions of economic development grounded on the adoption and use of ICT, as well on as strong national ICT industries. These countries serve as models to those looking to achieve the growth opportunities afforded by coherent demand stimulation strategies in the ICT sector.

— Sonia Jorge, Research and Consulting Director

Related resources:

Regulators Hold the Key to Mobile Broadband Development in Africa
AME Telecom Insider published October 2012
In this Insider, we will discuss why regulators should focus on constructing a future-proof legal and regulatory framework to help ensure the development of a healthy mobile broadband ecosystem. Then we will demonstrate how licensing regime changes within a regulatory framework can produce results favorable to operator-led mobile broadband growth. Next we will highlight how regulator flexibility towards the private sector can encourage activity that strengthens the diffusion of mobile broadband in a telecom market. While no one regulatory body has been free of missteps in this arena, a case study from Kenya will subsequently provide examples of regulator actions that are helping to move their mobile broadband agendas forward in important respects. The aim of this Insider is to highlight best practices that regulators in Africa should consider as they change regulations that will play a large role in determining the levels of access to mobile broadband on the continent through the end of the decade.

ICT Plans in Africa: Private Sector Involvement Is Vital
AME Telecom Insider published March 2012
In this Insider, we explore the common themes articulated in national ICT plans, highlighting areas where governments must be sure to address problems that tend to arise. Next, we demonstrate why the prioritization of the private sector is a must for any government hoping to realize NICT plan successes. This will entail an analysis of the existing cooperation between governments and the private sector in Africa. Then we describe areas where the private sector can have an “in” to help spur revenue-generating opportunities as NICT plans are designed and implemented. Finally, we conclude with case studies from Egypt, Kenya and Nigeria to provide more country-specific information from national ICT plans and to illustrate the private sector’s role in the national ICT plan development and implementation process.

National Broadband Plans Show a Diversity of Methods but a Unity of Purpose
Latin America Telecom Insider published December 2011
In this Insider, we examine national broadband plans that have debuted in select countries in Latin America and highlight key themes that are vital to success. This includes accomplishments that have been made through the help of having a clearly defined NBP in place. We provide project investments that the private sector has made to support NBPs, with special attention given to areas previously deemed to lack commercial potential. An analysis of the suitability of public-private partnerships (PPPs) to realize NBP objectives follows. The report concludes with case studies of more detailed national broadband plans from Brazil, Colombia and Chile.


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