In just one decade, the world of information and communications technologies (ICT) has changed dramatically. The Internet has become an integral part of people’s personal and business lives; critical for a wide range of information, communication and entertainment services. With broadband networks, consumers can now access the Internet at speeds up to or exceeding 100 megabits per second (Mbit/s) and they can use their mobile phones for a wide range of activities, including surfing the Internet, purchasing goods and services online, streaming video or music and conducting financial transactions.

A look at the state of broadband some 10 years back, however, presents a much different picture. In 2001, fewer than 11 in 100 people around the world had any type of Internet access, the majority of which was through a dial-up connection.* Korea (Rep.) was the only country with a wireline broadband penetration rate in the double digits;* the other top five countries in the Organisation for Economic Co-operation and Development (OECD) had just over three subscribers per 100 people by the end of 2001.* Wireless broadband was still in its infancy. Although there were 15.7 mobile cellular subscriptions per 100 people worldwide in 2001, third generation (3G) networks capable of mobile broadband services and applications were just beginning to be deployed.

Despite relatively low speeds and penetration, by 2001 the Internet was already beginning to provide a rich and dynamic source of content and communications. Email was in common use—in 2001 nearly 12 billion email messages zipped around the world every day. Blogs had become a popular form of social media, with sites such as LiveJournal and leading the way. Entering the search engine business in 1998, Google had quickly expanded and provided access to over three billion documents by December 2001. Due to limited bandwidth, however, many websites were text-heavy, with few images and virtually no video. Social networking sites were merely looming on the horizon; it would be another two years before the launch of Myspace, three years for Facebook and four years for YouTube. Other bandwidth-intensive online applications, including Skype, YouTube and Apple’s iTunes store, were also years away from commercial launch. Converged services, such as Internet Protocol television (IPTV), were just being introduced.

Fast-forward a decade and we find that much of what was popular in 2001 is still in high demand today. Google has continued its rise and now processes over one billion search requests every day (see Figure 1.1). The number of email accounts worldwide exceeded three billion in 2011, while the number of emails sent averaged about 300 billion per day and is expected to reach over 500 billion per day by 2013.* With over 150 million blogs in 2011, blogging has evolved from a simple online diary to a type of new media, which is used by “citizen journalists” as an alternative to traditional journalism, as well as by governments and corporations to communicate less formally with the public. In addition, a multitude of new services and applications has emerged that were not even conceived of a decade ago. YouTube has surpassed three billion views a day,* while Skype has over 700 million user accounts* and Facebook over 845 million active monthly users at the end of 2011.* The growth of today’s most popular services and applications would not have been possible without broadband access. In turn, for those currently without such access, many of these tools are still not available.

Comparison of Availability of Networks, Services and Applications in 2001 and 2011

Source: TMG, Inc.

Improvements to users’ online experience and the rise of digital media are largely attributable to more widespread deployment of wireline broadband, along with significant improvements to mobile technologies and services. As of December 2010, the OECD found that the average wireline broadband penetration rate in the top five countries was over 36 subscribers per 100 people, more than a ten-fold increase in less than a decade.* Additionally, among all OECD countries, the average advertised wireline broadband speed had surpassed 37 Mbit/s by September 2010, which allows users to download a feature-length movie in a matter of minutes.* Despite these advances, a digital divide remains between developed and developing countries. Although wireline broadband has grown considerably in terms of the global average, penetration levels in developing countries remain low. By the end of 2010, the number of fixed line subscriptions reached about half a billion globally, with just 4.4 subscriptions per 100 people in developing countries compared to 24.6 in developed countries.* In effect, wireline broadband deployments in many developing countries are a decade behind those in developed countries.

But broadband is not just about high-speed access to the Internet to allow users to surf the web, play video games and engage in social networking (although these are useful drivers of demand and provide their own benefits to users). Broadband is an enabling platform for advanced services and applications. The benefits of broadband can reverberate throughout the economy and act as an essential input in all other sectors, including education, health, transportation, energy and finance; similar to the impact that electricity has had on productivity, growth and innovation. However, in order to achieve this potential, governments must put in place effective policies that spur supply and demand, as well as encourage uptake of broadband in all sectors of the economy.

The roll-out of broadband requires significant investment from the private sector, as well as support from the public sector. It will also require a long-term perspective because its benefits will not occur overnight. For developing countries with limited resources, it may be difficult to focus on broadband when many of their communities do not have schools for children, safe drinking water or access to hospitals and health care. However, broadband offers countries a platform to provide other sectors of the economy with new tools to enhance businesses, improve the economy and benefit its people. This will require resources and the benefits will not be immediate, but making this high priority and part of a country’s development agenda will be necessary to ensure that developing countries do not further extend the digital divide between developed and developing countries.

This module of the Broadband Strategies Toolkit expands on the significance of broadband to both developing and developed countries, first by identifying what broadband means in various contexts, including speed and functionality, identifying broadband as an enabling platform and broadband in terms of network infrastructure. Secondly, this module examines why broadband is important, particularly the potential positive impact that broadband can have on the productivity, employment and throughout every sector of the economy. The main market trends regarding the supply and demand of broadband networks, services and applications are addressed, as well as an overview of how policymakers and stakeholders can take advantage of these trends to implement deployment and adoption strategies that maximize the benefits of broadband.