Broadband as a platform forBroadband as a platform for ...1 Viet Nam 4.34 1'536 4.34 1'536 2.82 0.62...
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Broadband as a platform for Broadband as a platform for development: Lessons from Asia Tim Kelly Tim Kelly Lead ICT Policy Specialist, World Bank / infoDev OECD/W ld B kJitC f “I ti dS ti bl G th OECD/World Bank Joint Conference on “Innovation and Sustainable Growth in a Globalized World” 1 Paris, 18-19 November 2008
Transcript of Broadband as a platform forBroadband as a platform for ...1 Viet Nam 4.34 1'536 4.34 1'536 2.82 0.62...
Broadband as a platform forBroadband as a platform for development: Lessons from Asia Tim KellyTim KellyLead ICT Policy Specialist, World Bank / infoDev
OECD/W ld B k J i t C f “I ti d S t i bl G thOECD/World Bank Joint Conference on “Innovation and Sustainable Growth in a Globalized World”
1Paris, 18-19 November 2008
Agendag
Wh b db d?300
ions
Total broadband Internet subscribers
Total narrowband Internet subscribers• Why broadband?– What, Where,
150
200
250Mill Total narrowband Internet subscribers
• Why Asia?– Asian Pioneers
0
50
100
– Developing Asia• Broadband and economic growth
01997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Broadbandg– The evidence– Performance/price ratios
Broadband subscribers
overtook narrowbandPerformance/price ratios
– The wider picture• Conclusions
narrowband subscribers in
2005• Conclusions
Why broadband?
• Price/performance ratio doubling every 12-18
4.0
5.0
120
140
160
Mean speed, in Mbit/s Median price per Mbit/s, in US$ per month
p g ymonths
2.0
3.0
60
80
100
120
• Always-on • Distance neutral
0.0
1.0
2004 2005 2006 20070
20
40Mean speed (in Mbit/s, left axis)
Median price per Mbit/s (In US$, right axis)
Distance neutral• Both fixed and mobile• More than 500 millionMore than 500 million
subscribers and heading towards ubiquity• A platform for many other applications (eg e-A platform for many other applications (eg e
commerce, video-on-demand, e-gaming, etc)• Still in the early stages of its growth cycleStill in the early stages of its growth cycle• A new driver of long-term economic growth?
Where is broadband: 2000
Source: ITU World Telecommunication Indicators Database.
Where is broadband: 2002
Source: ITU World Telecommunication Indicators Database.
Where is broadband: 2004
Source: ITU World Telecommunication Indicators Database.
Where is broadband: 2006
Source: ITU World Telecommunication Indicators Database.
Broadband penetration, 2007
• Asian economies benefit from inter-modal competition• Have a high percentage of fibre optic subscribers• Have a high percentage of fibre-optic subscribers• Frequently pay the lowest prices
Low broadband prices in Asia
Monthly Speed Monthly Speed as a % ofLower speed Higher speed Lowest sampled cost
y p y p fcharge (kbit/s) charge (kbit/s) US$ per monthly
US$ Down US$ Down 1 Mbit/s income (GNI)Rank 2007 2007 2007 2007 2007 ISP
1 Japan 28.57 8'192 35.70 51'200 0.70 0.00 Yahoo BB 2 Korea (Rep.) 29.94 10'240 48.11 51'200 0.94 0.01 KT 3 Netherlands 12.25 4'000 27.30 20'000 1.36 0.00 Orange 4 Taiwan, China 6.08 256 22.20 12'288 1.81 0.02 Chunghwa 5 Sweden 14.65 1'000 44.23 24'000 1.84 0.01 Tele2 6 F 20 39 2'000 40 91 20'000 2 05 0 01 N f t l6 France 20.39 2'000 40.91 20'000 2.05 0.01 Neuf telecom 7 Singapore 13.49 512 80.81 30'720 2.63 0.01 StarHub 8 Viet Nam 4.34 1'536 4.34 1'536 2.82 0.62 FPT Communications 9 Finland 34.07 1'024 68.28 24'000 2.84 0.01 Elisa-Lajaakaista
10 Switzerland 40 82 3'500 57 48 20'000 2 87 1 05 Bluewin10 Switzerland 40.82 3 500 57.48 20 000 2.87 1.05 Bluewin
World Average 107.95 759 278.18 4'392 299.21 97.43
B db d iBroadband users in Japan and Korea
pay less than 1 per Five out of the ten
cheapest broadbandcent of the global
average price
cheapest broadband economies are in Asia
Low prices too in developing Asia
Monthly Speed Monthly Speed as a % ofcharge (kbit/s) charge (kbit/s) US$ per monthly
Lower speed Higher speed Lowest sampled cost
charge (kbit/s) charge (kbit/s) US$ per monthlyUS$ Down US$ Down 1 Mbit/s income (GNI)
2007 2007 2007 2007 2007 ISP1 Viet Nam 4.34 1'536 4.34 1'536 2.82 0.62 FPT Communications 2 Malaysia 5.80 384 5.80 384 15.11 0.39 TMNET y3 Taiwan, China 6.08 256 22.20 12'288 1.81 0.02 Chunghwa 4 China 7.88 512 7.88 512 15.38 1.43 E-NET 5 Sri Lanka 9.01 512 9.01 512 17.60 2.09 SLTnet 6 Maldives 9.27 256 15.38 512 30.03 1.44 Dhiraagu 7 India 9.65 256 37.48 2'048 18.30 3.54 Tata Indicom
Asia 70.06 818 222.36 4'587 278.89 60.85
W ld 107 95 759 278 18 4'392 299 21 97 43World 107.95 759 278.18 4'392 299.21 97.43
D l i A iDeveloping Asia prices typically <10% of global
Seven developing Asian economies have entry-
averagey
level prices below US$10 per month
Low prices generate faster growth
6Broadband subscribers per 100 inhabitants
5
6
4
Chi
3MalaysiaChina
2
1.
1. Viet Nam2. Philippines 3. Thailand
1
India
2.3.
02002 2003 2004 2005 2006 2007
Asia catching up
Year in which 5% penetration attained: USA and China
Country Fixed-line
PC Internet users
Mobile Broadband
USA 1912 1983 1994 1993 2002
China 1997 2005 2002 2000 2007
G 85 22 8 7 5Gap (years)
85 22 8 7 5
The gap between USA and China is shorter in broadband than for any
other ICT service
How does broadband promote economic growth?economic growth?
• Shift from intermittent to “always on” service• Shift from intermittent to always-on service• Higher speeds for lower unit costs• Shorter waiting times for files to download• Shorter waiting times for files to download• Enhanced user experience (multimedia)
Access to global markets (eg for outsourcing access to• Access to global markets (eg for outsourcing, access to information, leading to real time, transparent competition)
• Ability of broadband to cannibalize other services:• Ability of broadband to cannibalize other services:– Downloaded video-on-demand substituting for live TV
Voice over broadband substituting for public switched– Voice over broadband substituting for public switched telephone network
• Delivery of multiple play leading to cost-savings andDelivery of multiple play leading to cost-savings and efficiencies
Where’s the evidence?
• Broadband users tend to visit more sites than narrowband users and make better use ofnarrowband users and make better use of interactive features
• Broadband can generate business savings g gand reduce costs (eg relative to leased lines)
• Broadband is driving e-commerce and ti d t k t ( licreating new product markets (e.g., online
poker)• Productivity savings especially from mobile• Productivity savings, especially from mobile
broadband• US studies show broadband added 1-1.4
percentage points in job growth, 1998-2002• Broadband facilitates “clean growth” (eg
through substitution of travel of physicalthrough substitution of travel of physical delivery of goods)
Price/performance ratios in Asia
Republic of Korea JapanBroadband
30
40
50
60
2
3
4
Speed 40
50
60
0.6
0.8
1
Price
Speedspeed and price, Aug 2007, selected
i
0
10
20
30
0
1
2
Price
0
10
20
30
0
0.2
0.4economies
•Broadband 0
2003 2004 2005 2006 20070
02003 2004 2005 2006 2007
0
1 2 35China Malaysia
speed in Mbit/s (left axis)•Typical price in
0 6
0.8
1
1.2
20253035
Price
Speed
0 6
0.8
1
1.2
4050607080
Price
Speed
yp pMbit/s per month (right axis)
0
0.2
0.4
0.6
051015
Price
0
0.2
0.4
0.6
010203040Price
Source: Biggs and Kelly (forthcoming) 0
2003 2004 2005 2006 20070
02003 2004 2005 2006 2007
0
( o co g)
How does broadband affect the economy?affect the economy?
Percentage point increase in GDP per capita for every ten percentage point increase in ICT penetration 1980 2006
1.5High-income economies
percentage point increase in ICT penetration, 1980-2006
1.12
1.21
1.38Low- and middle-income economies
1.0
0.730.81 0.77
0.50.43
0.73
0.60
Fixed Mobile Internet BroadbandSource: Qiang and Rossotto, 2008
Conclusions
B db d i i t t d i f i i l d lt l• Broadband is an important driver of economic, social and cultural growth now– But it will be much more important in the future because of trends
i i / fin price/performance– It can become a General Purpose Technology enabler
• Developed Asian economies helped pioneer broadband applications p p p ppin the early 2000s– Developing Asian economies will drive growth in the coming
decadedecade– Developing Asia will also drive new applications, especially for
mobile broadband• There is a growing body of literature and research on the• There is a growing body of literature and research on the
developmental impact of broadband– But there is a lack of research from Asia and developing countries– OECD / World Bank cooperation could push forward this research
agenda
