Four major findings
Our evidence points to four major findings that are of great import in informing governments, policy-makers, regulators and operators as they formulate general infrastructure and ICT investment decisions in the years ahead.
The findings are:
1. Developing countries should implement policies to maximize mobile broadband1 adoption, as the main digital technology contributing to economic development and addressing the digital divide.
2. Developed countries should adopt policies which favour fixed broadband penetration as a key contributor to their economic growth.
3. Beyond broadband, all countries should aim to increase the development of digitization, which encompasses not only infrastructure deployment but its usage to foster the digital transformation of industries and improve consumer wellbeing.
4. Regulatory and institutional maturity in the ICT arena do indeed make a significant difference – and are important in driving the growth of digitization.
The study confirms that the economic impact of fixed broadband is guided by a return to scale effect: economic impact grows with penetration. The economic benefit of mobile broadband depicts a saturation effect: its economic contribution declines with penetration.
Developing countries: Accelerate development of mobile broadband
Developing countries should accelerate the development of mobile broadband to maximize economic impact. Penetration of mobile broadband in OECD countries is at 74 per cent in terms of unique subscribers – but comparable figures for the Africa region are 31 per cent, for Latin America 57 per cent and for the Asia-Pacific region 52 per cent. Since the economic impact of mobile broadband is higher in developing countries, such countries should maximize its adoption.
Six concrete steps for developing country governments to consider:
- Policy and regulation. Encourage policy and regulatory measures that facilitate infrastructure deployment in rural and isolated areas: these include the sharing of infrastructure, interconnectivity, and effective use of spectrum.
- Emerging technologies. Promote the use of emerging technologies to address the need for affordable digital infrastructure and services.
- Incentives and collaboration. Promote deployment of mobile broadband infrastructure in remote and rural areas through incentives that are attractive to private sector operators. Stimulate collaboration between private sector firms within your digital ecosystem.
- Affordable pricing. Focus on mobile broadband affordability of non-adopters: implement government initiatives that drive affordable pricing for your most vulnerable populations.
- Content of importance and relevance to your citizens. Complement economic-focused efforts by promoting the development of local Internet content and languages.
- Skill up your non-adopters. Focus on building the digital skills of non-adopters to address digital illiteracy.
Developed countries: Focus on technologies that boost digitization of production
Developed countries should focus on technologies that accelerate the digitization of production: these include ultra-broadband wireline (FTTx and DOCSIS 3.1) and 5G – critical infrastructure technologies that enhance digitization of production, which will in turn boost economic impact. OECD countries have reached 5G coverage of 39 per cent while FTTx household penetration is at 21 per cent.
Seven concrete steps for developed countries to consider:
- Grow infrastructure and demand. Promote commercial and investment cases that combine the benefits of telecommunications infrastructure with other enabling technologies (e.g. AI, AR/VR) to grow infrastructure and ICT demand from enterprises.
- Use regulatory sandboxes enabling enterprises to test emerging technologies and use cases free of regulation.
- Spectrum allocation and new services. Launch 5G pilot projects to obtain feedback and to support design of future spectrum allocations – at the same time stimulating the adoption of new services.
- Balance new technologies with re-skilling. Recognize that advanced technologies can eliminate jobs. As you move to the digital transformation of production, ensure digital skills requirements are identified and retraining taken into account.
- Flexibility in regulation. Keep enough flexibility on regulatory rules and procedures (for example the use of spectrum) to foster innovation and new technologies.
- Long-term policies. Recognize that building infrastructure is a multi-year process that needs to be underpinned by long-term policies for predictability and regulatory certainty.
- Balance consumer protection with commercial returns. Recognize that competition models need to protect consumers, while ensuring adequate returns are available to commercial players making the investment.