7.4

This section highlights the status of broadband development in different regions.*

  • 7.4.1 East Asia and the Pacific

    The region is home to world broadband leaders such as the Republic of Korea, Hong Kong, China and Japan where super high-speed access is increasingly becoming the norm. However, a huge broadband divide distinguishes “the mostly high-income countries that are broadband leaders from the mostly middle- and low-income countries that are broadband challenged.”*

    Although the region’s developed economies such as Japan, the Republic of Korea and Singapore have been successful in developing broadband access through existing network infrastructure, this is not the case in the region’s developing nations. A number of developing countries have deployed telephone and cable television network infrastructure, but often they are not adequate for fixed broadband access. Despite large cable television markets in some countries such as China, the Philippines and Thailand, for example, broadband competition from cable television providers is generally low. One reason is that many networks have not been upgraded to support broadband access via cable modem. Take China; despite having the world’s largest cable television market with almost 175 million subscribers in 2009, it has relatively few cable modem subscriptions and only about a quarter of its subscriptions are digital. This is likely to change with China’s new “Triple Network Project” announced in 2010.* The project aims to enhance convergence among telecommunications, Internet and broadcast networks by reducing barriers so that each market segment can provide any broadband service.

    Mobile broadband is also beginning to make inroads. Most East Asian nations have awarded mobile broadband spectrum and in a number of the region’s developing nations, mobile broadband subscriptions exceed fixed. In Indonesia, for example, where there were 6.7 million mobile broadband subscriptions using data cards in September 2010, compared to only 1.9 million wireline broadband subscriptions.* Challenges remain, however, as mobile broadband coverage needs to be extended throughout the region from mainly urban areas to rural zones.

    Malaysia is a regional example of a country that has established broadband goals.* It developed its Information, Communications, and Multimedia Services (MICMS) 886 strategy in 2006, setting a number of goals for broadband services. One was to increase broadband penetration to 25 percent of households by the end of 2006 and 75 percent by the end of 2010. But despite impressive growth, the target for 2006 has still not been met. The government is now focusing on WiMAX, 3G, and FTTH platforms to boost broadband adoption. To that end, the government is funding a fiber optic network that will connect about 2.2 million urban households by 2012. The network will be rolled out by Telekom Malaysia under a public private partnership. Under the partnership, the government will invest MYR 2.4 billion (US$ 700 million) in the project over 10 years, with Telekom Malaysia covering the remaining costs. The total cost of the project is expected to be MYR 11.3 billion (US$ 3.28 billion).Connecting the Pacific region with broadband is a major challenge. But it is critical that Pacific economies gain access to adequate bandwidth essential for supporting broadband development. Many of the island nations are widely dispersed and backbone networks are limited. Most countries rely on high-cost, limited capacity satellites and only a few economies have access to fiber optic submarine cables. The sub-region has been slow to develop mobile broadband, a consequence of previously limited competition in mobile markets. However, a number of countries now have competitive mobile markets that should spur deployment of high-speed wireless networks.*Vietnam has made impressive strides in boosting international high-speed connectivity and broadband use. The case of Vietnam is highlighted in a case study and summarized in Section 6.7.

  • 7.4.2 Europe and Central Asia

    The region is relatively well positioned to encourage broadband take-up; it has significant fixed and cable television networks and relatively high incomes and levels of education compared to other developing regions. However, there is also a high degree of diversity in terms of broadband potential among individual countries. This diversity is reflected in the United Nations Economic Commission for Europe (UNECE) four-stage classification of European and Central Asian members’ ICT development(Table 1). The UNECE describes strategies as ranging from accelerating and deepening usage in the more advanced economies of the region to raising awareness and establishing community access in those countries at the lowest level.

    Image
    TABLE 1
    UNECE classification of regional ICT development

    Source: UNECE.

    Despite having a relatively well-developed wireline infrastructure, wired broadband growth has been hampered in the region because consumers are content with using Internet dial-up. One reason is that telephone charges have historically been low in the region and not all Internet subscribers see the benefits of switching to more expensive higher speed connections. Mobile broadband has been launched in most countries although some countries began sooner than others. Most Eastern and Southern European countries, for example, launched mobile broadband before the Central European and Central Asian nations. This provided Eastern and Southern European countries with a head start in both deployment and migration to higher speeds. For example, Romania launched 3G in 2006 and had over 2.5 million active mobile broadband (speeds up to 21.6Mb/s are available) subscribers at the end of 2009 accounting for almost half of all broadband subscriptions.

    A number of the (lower and upper) medium countries in the region adopted broadband strategies within the framework of national ICT plans. Most of those were launched in the early to mid-2000s, and led to significant increases in broadband penetration. For example, in 2005, Moldova adopted its information society strategy, which incorporated a number of tracking indicators to monitor the impact of policies and programs for improving broadband access.* Broadband penetration in Moldovan households rose from less than one percent in 2003 to 17 percent by 2009.* International bandwidth use rose significantly in the landlocked country following an optical fiber connection to Romania (Box 1).

    Until April 2010, Moldova’s international connectivity market was entirely controlled by state-owned incumbent Moldtelecom. As a result, and because it is a landlocked country, Moldova’s private firms did not have direct access to the Internet. At that time, the government reformed its policies and procedures to open the market to competition. By July 2010, three companies (mobile telephony provider Orange and Internet service providers Starnet and Norma) had successfully applied to construct and operate cross-border fiber optic cables and gain direct access to carriers in Romania.

    The benefit of liberalization on availability, prices, and quality was immediate. International Internet capacity went from 13 Gbps in December 2009 to over 50 Gbps in July 2010. In response, Moldtelecom dropped the prices for wholesale connectivity by a third over that same time. As a result, retail subscribers in some parts of the country saw their available bandwidth double while subscription rates remained the same.

    BOX 2.2
    Impact of improved access to international connectivity: the case of Moldova

    Source: World Bank analysis, TeleGeography Global Bandwidth Research Service data for 2009*

    As a result of such initiatives, some of the countries in the region rank among the top countries in the world in average download speeds (Figure 7).

    Image
    FIGURE 7
    Household download index, Mbit/s, Top 25 economies, February 2012

    Note: Shaded bars refer to developing only Europe and Central Asia countries.

    Source: Ookla Net Index. http://www.netindex.com[Extracted 21 February, 2012]

    Moldova’s circumstance points out an issue that some countries in the region will have to address if they want to increase their broadband development: physical isolation. Landlocked countries in Central Asia face the challenge of ensuring that regional broadband backbones keep up with the region’s growing ICT needs. Within that context, the Economic and Social Commission for Asia and the Pacific (ESCAP) undertook a feasibility study in four countries: Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.* The study recommended closer regional cooperation to spur development of backbone networks.

    Turkey’s government recognizes the importance of a vibrant telecommunications market and is keen to promote the spread of broadband. For instance, many educational institutions now have broadband access. The case of Turkey is highlighted in a case study and summarized in Section 6.6.

  • 7.4.3 Latin America & the Caribbean

    In November 2010, ministers at the Third Ministerial Conference on the Information Society of Latin America and the Caribbean (LAC) adopted eLAC2015, a regional roadmap for the promotion of information society goals. eLAC2015 considers broadband pivotal noting:

    “For the countries of Latin America and the Caribbean, the universalization of broadband access in the twenty-first century is as important for growth and equality as were electric power and road infrastructures in the twentieth century. Broadband is an essential service for the economic and social development of the countries of the region, and it is indispensable for progress, equality and democracy. That is why the strategic goal is for broadband Internet access to be available to all of the citizens of Latin America and the Caribbean.”*

    Six goals were highlighted for universal broadband access in the region:

    Goal 1:

    Increase direct investment in broadband connectivity to make it available in all public establishments.

    Goal 2:

    Advance towards universal availability of affordably priced broadband connectivity in homes, enterprises and public access centers to ensure that, by 2015, at least 50% of the Latin American and Caribbean population has access to multiple convergent interactive and interoperable services.

    Goal 3:

    Coordinate efforts to bring down the costs of international links by means of a larger and more efficient regional and subregional broadband infrastructure, the inclusion of (at least) the necessary ducts for fibre-optic cables in regional infrastructure projects; the creation of Internet exchange points; the promotion of innovation and local content production; and the attraction of content suppliers and distributors.

    Goal 4:

    Collaborate and coordinate with all regional stakeholders, including academia; business; and the technical community and organizations working in the field, such as the Latin American and Caribbean Internet Addresses Registry (LACNIC) and the Internet Society (ISOC), to ensure that Internet Protocol version 6 (IPv6) is broadly deployed in the region by 2015; and implement, as soon as possible, national plans to make government public services portals in Latin America and the Caribbean accessible over IPv6 and to make public sector networks native IPv6 capable.

    Goal 5:

    Harmonize indicators that provide an overview of the status of broadband in the region, in terms of both penetration and use of applications, in accordance with international standards.

    Goal 6:

    Promote ICT access and use by persons with disabilities, with emphasis on the development of applications that take into account standards and criteria on inclusion and accessibility. In this connection, promote compliance by all government web portals with the web accessibility standards established by the World Wide Web Consortium (W3C).

    TABLE 3.1
    eLAC2015 universal broadband access goals

    Source: eLAC2015.

    Like Europe, LAC has a relatively high number of fixed telephone lines and cable television subscribers compared to other regions. Unlike in Europe, however, cable broadband has been particularly successful, with over half of the users enjoying a broadband subscription. By contrast, the number of telephone lines being used for DSL broadband is relatively low, a consequence of the high costs of entering the fixed telephone market and the lack of effective local loop unbundling policies in the region.

    Mobile broadband development has lagged compared to other regions. One factor has been delays in the award of spectrum used specifically for 3G services. However, this has been mitigated somewhat by widespread policies throughout the region allowing operators to use their existing 850/900 MHz spectrum (originally designated for voice) for high-speed mobile data services. These frequencies also support wider coverage with fewer base stations, so that investment costs are lower and a larger number of people can gain access.*

    On the demand side, LAC compares favorably to other developing regions. Education levels are relatively high and the existence of common languages throughout many countries—Spanish in Latin America and English in much of the Caribbean—results in a high level of widely accessible content, spurring demand. Despite relatively high per capita income for a developing region, incomes are highly divergent in the region, and affordability remains an issue for the majority of potential users. For example, over half of Mexican households reported that they did not have Internet access in 2009 because they could not afford it.*

    Chile has long identified ICT as a priority for economic development. Chile has planned and implemented ICT policies from both the supply and demand sides. The demand-side strategy has included programs for e-literacy, e-government, and ICT diffusion. For example, almost all taxes are filed electronically, and government e-procurement transactions more than doubled in volume between 2005 and 2008. The government has also promoted broadband use by municipalities. By 2008, almost all municipalities had Internet access, and 80 percent had websites. In June 2009, Chile’s fixed broadband penetration was 10 percent, while mobile broadband penetration was 2 percent. In order to reach the objectives of a digital Chile, the government’s broadband goal is to double broadband connections and complete nationwide coverage by 2012. One strategy is using universal service funds for a public-private partnership to provide mobile broadband in underserved localities.*

    Brazil is one of the few countries in the region with a specific broadband plan. St. Kitts and Nevis has the highest broadband penetration in the region. The cases of Brazil and St. Kitts and Nevis are highlighted in case studies and summarized in Sections 6.1 and 6.4.

  • 7.4.4 Middle East and North Africa

    The Middle East and North Africa (MENA) region is relatively well endowed with fixed line telephony for a developing region, but the prospects for wireline broadband are constrained. Most fixed broadband is provided over legacy carriers’ networks using ADSL, but few alternative operators have deployed copper line infrastructure, local loop unbundling, for the most part, is not available across the region and the development of inter-modal competition through cable television is inhibited by the popularity of satellite television, which is widely available at no charge through the informal market.

    Mobile broadband, on the other hand, has had greater success. Most new entrants in the broadband market have adopted wireless strategies, and many (but not all) countries have awarded spectrum for mobile broadband services. Morocco was one of the first countries to award 3G spectrum in the region [in what year?]. It did so through a beauty contest, which lowered spectrum costs for operators. Some of the spectrum was awarded to a new operator, shaking up the existing duopoly and triggering intense competition in the mobile broadband market. As a result, mobile broadband subscriptions in Morocco have surpassed fixed connections. The country also adopted the Maroc Numerique 2013strategy, which sets targets for providing broadband to all schools and one third of households by 2013.Morocco is highlighted in a case study and summarized below in Section 6.3.

    A report analyzing the main factors affecting broadband demand in many of the countries in the region identified challenges hindering broadband deployment and suggested recommendations to overcome them (Table 4).* The report’s overarching conclusion was that convergence—through bundled offers and transition to IP-based networks—would trigger mass broadband adoption.

    Image
    TABLE 4.6
    Challenges hindering broadband deployment in MENA and suggested recommendations to overcome them

    Source: Broadband for Development in the ESCWA Region.

    Most countries in the region share a common language, facilitating collaboration on developing digital Arab content to improve demand for broadband.* The Jordanian Minister of Information and Communications Technology has outlined the importance of the content industry as a main driver of Internet penetration, especially as it relates to local and Arabic content. The digital content industry in Jordan received a boost in 2009, when chipmaker Intel announced an investment in two digital content companies: Jeeran and ShooFeeTV.* The funding will be used to help both companies pursue regional growth as well as extend their product offerings. Jeeran is the largest user-generated content site in the Arab world, reaching one million members and seven million unique visitors per month, while ShooFeeTV provides online information for more than 120 Arab satellite channels including listings, programming information, celebrity news, pictures and video clips. Global social networking sites such as Facebook and Twitter have also grown in popularity as reflected in their extensive use during the Arab Spring uprisings. The number of Facebook users in the Arab region grew 78% in 2010 while in Tunisia the proportion of Facebook users increased 8% in the first two weeks of January 2011 following the beginning of demonstrations.*

  • 7.4.5 South Asia

    South Asia faces severe supply and demand side constraints in promoting broadband access. Fixed infrastructure is limited, and the number of telephone lines and cable television connections for broadband services is relatively low. Some countries have yet to award mobile broadband spectrum that would enhance inter-modal broadband competition. On the demand side, the region is the second poorest developing region after Sub-Saharan Africa, and levels of education are relatively low.

    India was the first country in the region to adopt a broadband policy in 2004.* However, it has not achieved the goals set. The country published a consultative document* on a new broadband policy and in December 2010, the Telecommunications Regulatory Authority of India issued broadband recommendations.* A key strategy is to develop an open access national fiber optic backbone network connecting all localities with more than 500 inhabitants by 2013.

    Pakistan also published a broadband policy in 2004.* But broadband deployment has not lived up to expectations. In an effort to accelerate broadband take-up, Pakistan’s Universal Service Fund is being used to subsidize the deployment of broadband throughout the country.*

    Other South Asian nations have also adopted or are developing broadband plans.* All these address issues of network buildout, but programs that would address demand side affordability issues are limited (Table 6).

    Image
    TABLE 6.52
    Broadband plans and policies in selected South Asian nations

    Source: ITU. 2010. Stimulating Universal Access to Broadband in Afghanistan, Bangladesh, Bhutan, Maldives and Nepal.

    Sri Lanka, which was one of the first countries in South Asia to award 3G spectrum has the second highest penetration of mobile broadband users, the lowest tariffs and fastest mobile broadband speeds in the region. Sri Lanka’s broadband experience is highlighted in a case study (see Section 6.5).

  • 7.4.6 Sub-Saharan Africa

    The Sub-Saharan Africa region faces tremendous barriers in developing broadband. It starts from a very low infrastructure base, with limited wireline telephone networks, practically no cable television networks but with better success in the buildout of mobile networks. On the demand side, challenges exist due to the lowest per capita income and fewest years of schooling of all developing regions.

    Over the past decade, a large amount of private investment, driven by sector liberalization and competition and major advances in cellular technology, has brought mobile services within the reach of the majority of Africa’s population. Increasing competition is making services more affordable and putting pressure on operating margins. Operators are responding by expanding their networks beyond towns and cities into rural areas, and tailoring services to the needs of the lower-income tiers of the population.

    Sub-Saharan Africa, however, has been largely left behind in the shift to broadband. Increasing the availability and affordability of broadband services is thus high on the agenda for policy makers. Conducive policy environments, investment in network infrastructure, access to radio spectrum, and availability of affordable international bandwidth will all play key roles in the delivery of low-cost broadband to the region.

    The slow growth of broadband starts with a lack of international connectivity and bandwidth. Due to limited local content and a shortage of national Internet exchanges, a significant amount of Internet traffic is routed abroad from Sub-Saharan Africa. A lack of international high-speed fiber optic capacity has meant that even where countries have been able to deploy broadband last mile infrastructure, performance is affected by slow international connectivity. Where connectivity exists, cable theft continues to be a major problem for reliability.

    Until 2009, SAT3/SAFE was the only major regional submarine optic cable serving the continent. Other countries had to use more costly and slower satellite links. This has changed dramatically since the arrival of several new undersea cable systems (i.e., TEAMS, SEACOM, EASSy) including the first serving the region’s east coast (i.e., TEAMS). Total capacity rose by a factor of 8.5 in 2009 and additional planned cables are expected to increase undersea capacity to over 20 Tb/s by 2012.*

    International connectivity limitations, however, are just part of the broadband supply chain challenges that the African region faces. Countries also need to ensure that the bandwidth gets disbursed throughout the country, but this continues to be a significant challenge. The region’s focus, thus far, on mobile voice networks has left backbone networks underdeveloped for the provision of broadband services. This has created a major bottleneck in the rollout of high-bandwidth services and will require the upgrading of cellular networks to provide value-added services.* Overcoming this infrastructure hurdle is an important element in shaping the structure and policy framework of the telecommunications services sector. Without it, broadband constraints will limit access speeds, affecting quality, and will remain expensive and limited to businesses and high-income customers.

    In the case of the region’s landlocked countries, regional backbones will need to be constructed to connect to neighboring countries. This will require public private partnerships to generate the investment needed and to ensure an effective and open access operating arrangement. The Kenyan government, for example, has supported open access to backbone infrastructure in various ways. It encouraged operators to participate in the TEAMS undersea cable and has also pursued public private partnerships for national backbone construction. It is now contemplating the same for the construction of broadband wireless networks using LTE technology. See the Kenya case study in Section 6.2.

    At the local access level, mobile broadband holds great promise. However, outside of a few countries, the region has yet to exploit this on a significant scale. Around two dozen Sub-Saharan African countries had commercially deployed 3G networks at the end of 2010 with around nine million subscriptions.

    Few African countries have elaborated a specific broadband policy. If mentioned at all, broadband is touched upon in overall sector strategies. One exception is South Africa. The Broadband Policy for South Africa, prepared by the Department of Communications, was published on 13 July 2010.* Defining broadband as speeds of at least 256 kbps, the government has identified two targets for 2019: all inhabitants to be within two kilometers of a public broadband access point and a household broadband penetration of 15%.