Broadband as Potential for Economic Growth

Broadband has become a key priority of the 21st Century, and its transformative power as an enabler for economic and social growth makes it an essential tool for empowering people, creating an environment that nurtures the technological and service innovation, and triggering positive change in business processes as well as in society as a whole.

Increased adoption and use of broadband in the next decade and beyond will be driven by the extent to which broadband-supported services and applications are not only made available to, but are also relevant and affordable for consumers.

 And while the benefits of broadband-enabled future are manifest, the broadband revolution has raised up new issues and challenges.

In light of these developments, ITU launched a new series of ITU Broadband Reports. The first reports in the series launched in 2012 focus on cutting edge policy, regulatory and economic aspects of broadband.

According to Brahima Sanou, Director, ITU Telecommunication Development Bureau, 
“This new series of reports is important for a number of reasons. First of all, the reports will focus on topical issues of special interest for developed and developing countries alike. Secondly, the various reports build on ITU’s recognized expertise in the area augmented by regular feedback from its Membership”.

Both broadband availability and speed are strong drivers in an economy. Last year Ericsson and Arthur D. Little concluded that for every 10 percentage point increase in broadband penetration GDP increases by 1 percent.

This growth stems from a combination of direct, indirect and induced effects. Direct and indirect effects provide a short to medium term stimulus to the economy.

The induced effect, which includes the creation of new services and businesses, is the most sustainable dimension and could represent as much as one third of the mentioned GDP growth.

“Broadband has the power to spur economic growth by creating efficiency for society, businesses and consumers. It opens up possibilities for more advanced online services, smarter utility services, telecommuting and telepresence. In health care, for instance, we expect that mobile applications will be used by 500 million people," said Johan Wibergh, Head of Business Unit Networks, Ericsson.

During a keynote speech at Broadband World Forum 2011 in Paris, Wibergh said: “We expect a huge increase from the current estimate of around 1 billion people with broadband access to about 5 billion in 2016, most of whom will have mobile broadband. Connectivity and broadband are just a starting point for new ways of innovating, collaborating and socializing.”

Erik Almqvist, Director at Arthur D. Little, said: “Until now there has been an absence of hard facts investigating the effects of broadband speed on the economy. This unique empirical study may help governments and other decisions makers in society make more correct tradeoffs and policy choices.”

Obstacles to realization in Nigeria
The hope of realizing broadband revolution in the country’s telecommunications industry may be a mirage as operators licensed to provide infrastructure expected to kick -start the service have decried barriers that discourages investment in this regard.
Engr. Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (Alton), the umbrella body of operators in the telecom space, said that granting multiple operational license to operators to provide metro and national fibre infrastructure does not guarantee investment in that regard, but implementation of  well articulated policies that will encourage operators to invest their money.

He said Government must go beyond granting of licenses to eliminating those barriers such as bottlenecks in securing ‘right of way’, impediments to smooth network operations- where operators are forced to pay levies that are not legalized, and vandalisation.

He explained that broadband services are anchored on availability of bandwidth, and that with excess capacity of it at our shore, investment need to be encouraged to distribute this capacity to various geographical areas of the country for broadband revolution to be experienced as is the case with voice service.

He added that operators that secured licenses to roll out broadband services with big money are yet to invest in provision of infrastructure because of clumsy process of securing ‘right of way’ from various government agencies.

‘Right of way’ is a legal instrument allowing operators to deploy infrastructure on federal or state roads with a fee. He added that unless these barriers are addressed it may be difficult for operators to invest in infrastructure that will enable provision of broadband.

Experts have argued that none availability of fibre backhaul infrastructure required to distribute bandwidth from Lagos where the submarine cable land to those cities, is responsible for high cost of bandwidth which is affecting quality and cost of internet in those cities.

Mohammed Rudman, managing director, Internet Exchange Point of Nigeria, said that availability of distributive channels of internet and making it accessible to ISPs is essential for the country to witness a broadband revolution.

“Without moving internet capacity from Lagos to other parts of the country, we may witness a lopsided broadband revolution, only in Lagos and its environs,” he said.
Ross Bateson, Special Government Advisor for the GSMA said: "It is essential that the new Nigerian government acts quickly to support Mobile Broadband expansion, as failure to do so could hinder the country's social and economic growth. Not only could the country realise as much as NGN862 billion of incremental GDP, but people of all ages and livelihoods would benefit from the vast amount of information and opportunities Mobile Broadband can unlock."