Strategies to Promote Broadband Demand

The purpose of this chapter is to provide guidelines on how to introduce demand stimulation targets and policies in national broadband plans and national ICT planning in general. Some of the terms presented in this chapter are closely linked to concepts introduced in modules 1 - Policy Approaches to promoting Broadband Development and 3 - Law and Regulation for a Broadband World.

  • 6.8.1 Determining adoption targets in National Broadband Plans

    Reflecting the shift in emphasis from supply to demand, many national broadband plans now prioritize demand stimulation over infrastructure deployment. In general, this shift is more prevalent in developed nations, where the broadband coverage challenge has been addressed to a large degree.




    By 2021, the National Broadband Network will cover 100% of premises, 93% of homes, schools and businesses at up to 100 Mbps over fiber, with the remainder at up to 12 Mbps over next generation wireless and satellite.


    By 2013, 100% of population will be provided with access speeds of at least 25 Mbps.


    By 2015, 90% of families to have broadband and 50% of residents to be using the mobile Internet.


    By 2014, to have 30 million fixed broadband connections, including homes, businesses and co-operatives, plus 100 000 telecentres.


    By 2011, to provide Internet access to 3 million rural households.
By 2014, 100% of school and 70% of households to have broadband. By 2018, 100% of households.


    By 2014, to raise broadband accessibility to 45% of the population.

    Czech Rep.

    By 2013, in all populated localities a minimum of 2 Mbps and in cities a minimum of 10 Mbps.
By 2015, rural areas to have at least one half of the average speed in cities and 30% of premises in cities to have access to at least 30 Mbps.


    By 2020 100% of households and businesses to have access to 100 Mbps.


    By 2010, every permanent residence and permanent office of business or public administration body must have access to a fixed or wireless subscriber connection with an average downstream rate of at least 1 Mbit/s. By 2015 more than 99% of population permanent residences and permanent offices of businesses or public administration bodies will be no more than two kilometers from an optical fiber or cable network permitting 100 Mbps connections.


    By 2012, 100% of the population to have access to broadband.
By 2025 100% of home to have access to very high speed broadband.


    By 2014, 75% of households will have download speeds of 50 Mbps.


    By 2017, 100 Mbps to all homes.


    By 2013, broadband coverage will be 100%, and average speed will be 2 Mbps, with a target for 2020 of 30 Mbps.


    2007: All Icelanders who so desire should have access to a high-speed connection.


    By 2010, to have 20 million broadband connections.


    October 2010: in areas where there was no broadband a mobile service (using HSPA), was required to be in place with a minimum download speed of 1.2 Mbps and a minimum upload speed of 200 kbps.


    Broadband included in universal service.


    By 2012, all Italians to have access to the Internet at between 2 and 20 Mbps.


    By 2015, fiber optic highways will be completed enabling every household to enjoy a broadband service.


    By 2010, to provide broadband multi-media services to 12 million households and 23 million wireless subscribers.
By 2012 to raise average speeds to 10 Mbps with a maximum of 1 Gbps.


    By 2015, FTTH to every household. By 2020 1, Gbps to every household.


    By 2012, 22% broadband penetration.

    New Zealand

    By 2019, ultra fast broadband to 75% of New Zealanders where they live, work and study.
By 2015, 80% of rural households to have speeds of at least 5Mbps, with the remainder to achieve speeds of at least 1Mbps.


    By 2007, all citizens to be offered high-speed broadband.


    By 2013, 23% of population to have access to broadband.
A citizen who has no computer may use one of the numerous points of access to digital services, which are located in public institutions.


    By 2012, 100% of municipalities covered by fixed NGN. By 2015, 100% national coverage by LTE.


    By 2010, to have 15 lines per 100 population. By 2015, to have 35 lines per 100 population.

    Slovak Republic

    By 2013, 100% of population to have a minimum speed of 1 Mbps.
By 2020, to provide access to high speed broadband of at least 30 Mbps.

    South Africa

    By 2014, to have 5% broadband penetration (min. 256 kbps).


    By 2011, minimum speed of 1 Mbps broadband access available to 100% of population. By 2015, 100 Mbps broadband available to 50% of population.


    By 2015 40 per cent of households and businesses should have access to 100 Mbps. By 2020 90 per cent of households and businesses should have access to 100 Mbps.


    Since 2008 a universal service obligation of 600 Kbps.

    United Kingdom

    By 2015, to bring “superfast broadband” to all parts of the UK and to create the “best broadband network” in Europe. To provide everyone with at least 2 Mbps and superfast broadband to be available to 90% of people.

    United States

    By 2010, at least 100 million homes should have affordable access to actual download speeds of at least 100 Mbps and actual upload speeds of at least 50 Mbps.
By 2020, every household should have access to actual download speeds of 4 Mbps and actual upload speeds of 1 Mbps.

    TABLE 6.52
    National Broadband Targets

    Source: OECD. National Broadband Plans

    The differences in targets can, in many cases, be related to the lack of rigor in setting them up. It is critical that countries follow a consistent an structured approach to defining targets.

    The first area to be addressed regarding demand stimulation in national broadband plans pertains to the stipulation of adoption targets, which should complement the supply side (e.g. coverage of service) targets. These will have to be categorized in terms of residential, social (educational and health delivery institutions), enterprises (particularly SMEs), and public administrations. Furthermore, targets will have to be specified for both fixed and mobile broadband. In order to highlight broadband demand stimulation targets, it is advisable to structure goals on the basis of the following matrix (see table 6.53).

      Type of Target

    Supply (objective: network coverage)

    Demand (objective: broadband adoption)

    Speed of service (objective: Mbps of download)


    Residential (objective: universal service)

    Percentage of population

    Percentage of population* 

    X Mbps of minimum download speed for universal service

    Social (objective: social inclusion)

    Percentage of educational, cultural, health and scientific establishments

    Percentage of educational, cultural, health and scientific establishments

    X Mbps of download speed per establishment

    Enterprises (objective: maximization of economic impact)

    Percentage of industrial establishments

    Percentage of large, medium, small and micro enterprises

    X Mbps of download speed per establishment and industrial sector

    Public administration (objective: maximization of efficiency)

    Percentage of public administration units (offices)

    Percentage of public administration units (offices)

    X Mbps of download speed per public administration unit

    TABLE 6.53
    Matrix for defining National Broadband Planning Targets

    Matrix for defining National Broadband Planning Targets

    Supply targets: The first step in setting up broadband targets is to define the network coverage objective. This should be conducted for wireline and wireless networks. To a large degree, the social and residential coverage objectives have an impact on those of enterprises and the public administration sector, since population and economic and administrative units tend to overlap. Accordingly, if the objective is to cover 100% of the population, it is highly likely that this goal will address 100% of firms and public institutions.

    In general term, coverage target setting is conducted a priori on the basis of social policy imperatives. The notion that broadband is a public service that needs to be provided to the whole population of a given country is gaining currency. Forty countries have so far stipulated in their policies and regulatory frameworks the need to provide universal access to broadband services (among them, Brazil, China and Spain). Some countries go even further declaring broadband a human right (e.g. Finland, Estonia). Broadband plans of developed countries tend to define coverage targets for 100% of population, while many emerging countries propose reaching 75%. 

    Residential demand targets: Once coverage is established, demand targets need to be defined. This requires implementing different approaches for residential, social, enterprise and public administration. In the case of residential demand targets, four methodologies could be used:

    • Extrapolation of historical growth in penetration rates: this approach allows grounding residential target setting on a realistic base; however, it is important to consider potential saturation points when implementing this approach. For example, due to its late start, mobile broadband has been growing quite significantly in the past two years. Consequently, an extrapolation of penetration growth rate of this technology could overestimate future adoption (see example in figure 6.45)
    FIGURE 6.45
    Ecuador: Historical and extrapolated broadband penetration
    • Correlation between economic development and broadband penetration: this methodology is based on a simple approach of determining whether the country under analysis is falling behind in broadband penetration when considering its level of economic development; target setting is defined in terms of penetration to be achieved in order to reach the level expected by its economic development level (see example in figure 6.46). 
    FIGURE 6.46
    Latin America: Economic development and broadband penetration

    Sources: World Bank; ITU; Telecom Advisory Services analysis

    • Comparison with neighboring nations: this approach, while risking under- estimated the target, a target that aligns the nation under consideration to regional penetration levels (“catch up approach”).
    • Country vision: an alternative approach to residential demand target setting stipulates that, based on broadband economic impact, the target should aim to grow its penetration in order to maximize its economic impact; this could be modeled by relying on econometric models of economic impact and assuming alternative impact scenarios. In other words, this methodology would establish a residential penetration target if the objective is to contributes by x% to growth of the GDP (see figure 6.47). 
    FIGURE 6.47
    Latin America: Economic development and broadband penetration

    Sources: Wireless Intelligence; ITU; World Bank; TAS analysis

    These four methodologies allow defining, by triangulation and validation, a consensus residential target.

    Social demand targets: the determination of targets for educational, cultural, research and health institutions can be conducted by relying on the recommendations set up by International Telecommunication Union (see table 6.54).

    TABLE 6.54
    Specific broadband penetration targets for social institutions

    Enterprise demand targets: the determination of broadband targets in the enterprise sector requires segmenting the sector by size of company and industrial sector. This segmentation is particularly relevant in the SME sector since there are firms that, despite their small size, are ICT intensive and require good broadband connectivity to fulfill their objectives. On the other hand, there are others that, due to their position in low-value added domestic segments, are not necessarily in need of broadband.

    This differentiation leads to the determination of different adoption targets by firm size and industrial sector.

    Download speed targets: download speed targets have to define by segment. While the minimum speed for universal residential broadband is one target, goals for social and enterprise applications will need to be differentiated by segment. For example, the targeted speeds for social institutions are driven by the broadband applications and their bandwidth intensity (see table 6.55).

    TABLE 6.55
    Target speeds for social institutions

    In the case of enterprises, it is useful to segment speed requirements by SME segment (see table 6.56).

    TABLE 6.56
    Target speeds for SMEs

    After defining all targets, national broadband plans could construct a matrix such as the one below, developed for Ecuador’s National Broadband Plan (see table 6.57). 

    TABLE 6.57
    Ecuador: National Broadband Planning Targets
  • 6.8.2 Identifying and managing demand stimulation programs

    Once targets are determined, national broadband plans have to identify specific policies to stimulate demand and bridge the gap. Whether explicit or implicit, there appears to be a link between broadband demand stimulation programs and national strategies focused on broadband or digitization. A large portion of regional European Union digital literacy initiatives can be traced back to national strategies, such as the United Kingdom’s “Empowering Citizens, Connecting Communities,” or “Implementing the Information Society in Ireland,” as well as regional plans, like the Lisbon Agenda and the Riga Declaration.   

    A classical country case in point is that of Finland, where the document “Finland – Towards an Information Society – A National Outline 1995-2000” served as a framework to defining a host of digital literacy initiatives. In addition, other policy initiatives formulated at a later date, such as the “Governmental Information Society program, 2003-2007” put additional emphasis on the deployment of initiatives aimed at promoting usability, inclusion and quality of life.

    In the linkage between demand stimulation initiatives and national broadband plans, two differing philosophies exist. Some countries tend to deploy national and regional initiatives that are centrally managed and that have been defined in the national plans. In general, national centrally managed demand stimulation initiatives tend to originate within either the Ministry of Education or the Ministry/Secretariat for ICT/Communication. In their review of digital literacy initiatives, Hannan et al. (2009) conclude that most initiatives, especially those led by public organizations, are generally driven by centralized policies at the national or regional level and are seen as strategically linked to government objectives. In particular, many initiatives and the rationales behind them can be traced back to either the economic or the social ramifications of a developing information society and government’s priorities in response to these changing circumstances. A critical advantage of national centralized programs is that they can tackle potential synergies and overlaps among demand stimulation initiatives.

    In other nations, it is common for some initiatives to emerge at the local level, once the guidelines have been formulated nationally. Local initiatives are initiated at sub- sovereign levels (province, department, district, and even, municipalities). These local initiatives have an active participation of non-governmental organizations and community interest groups. In that regard, the key advantage of locally driven programs has to do with their closeness with the communities being targeted. This feature allows the program to carefully tailor content and implementation dynamics to the needs of the targeted population. As a counter-example, a digital literacy program targeting SMEs in rural Canada was criticized for emphasizing training in presentation (e.g. powerpoint) applications, not necessarily a critical need of participants.

    A critical element in defining a successful demand stimulation program has to do with its long-term sustainability. In fact, according to Hannan et al. (2009) sustainability remains a big concern, since according to their study of 464 programs across 32 countries, only 40% have been identified as still running, transferred or expanded beyond the initial timeframe. Similar concerns were raised in the implementation a municipal WiFi program in Brazil, where once the hardware was installed, financing difficulties emerged in covering the ongoing operating costs of the facility. This has to do with the ability to implement the initiative until its objectives are accomplished. Hannan et al. (2009) have identified five factors that are critical in driving program sustainability:

    • Composition of stakeholders involved: the findings in this regard are quite clear. Digital literacy programs with higher chance of sustainability are either sponsored by a private company, the partnership of an NGO and a private company, a public-private partnership, or a public-private partnership including an NGO; on the other hand, if a project is exclusively sponsored by the public sector, chances are that it will not be sustainable. An obvious explanation of the linkage between private sponsorship and sustainability is the financial and infrastructure support, although a non-intuitive factor is that the private entity provides more focus in achieving the program objectives. In addition, in demand programs that are centrally managed but locally implemented, the number of stakeholders increases substantially, thereby raising the likelihood of program sustainability. Finally, the reliance on NGOs (local associations, community groups, voluntary organizations) drastically raises the probability of long term sustainability because of the intrinsic interest of such entities in improving the livelihood of the population that lacks broadband access.
    • Level of implementation: national programs, driven by a country policy or strategy appear to have a higher likelihood of sustainability (although the difference with regional and local programs is not that significant).
    • Whether the initiative requires payment or not by the user: 60% of analyzed digital literacy campaigns are free of charge to the users.
    • Whether the initiative is being evaluated as part of a larger project: while being a positive contributor to the program success, research indicates that evaluation is only conducted in the context of large-scale national initiatives.