Telecom success story conceals a growing digital divide
The growth of Internet users in the Asia Pacific is gaining momentum as emerging markets leverage mobile phones as a new and widely available form of access. However mature markets have further widened the digital gap with the deployment of high-speed broadband services, says the new ITU Asia Pacific Telecommunication/ICT Indicators 2008 report.
“Broadband and Internet access in the Asia-Pacific region is currently characterized by two distinct scenarios. In upper-middle and high-income economies, ubiquitous access is progressing through a competitive race to provide ever faster fixed broadband speeds and the deployment of mobile broadband technologies at ever lower prices,” said the ITU report, entitled Broadband in Asia Pacific: too much, too little?
“At the other extreme, in most of the region’s low and lower-middle-income economies, mobile phones have become a substitute for the shortage of fixed lines and fixed broadband access.” According to the report, the growth rate of Internet users in low and low-middle-income economies doubled in 2007, with China alone putting on 74 million new Internet subscribers. Excluding China, these economies grew their Internet subscriber base by 28% in 2007, compared to 17% in 2000.
BROADBAND DIVIDE: While upper middle and high-income economies saw flat growth for the total number of Internet users, they dominate access to high speed, as well as affordable, broadband services. “The Asia-Pacific region is home to different extremes of fixed broadband Internet access. The inhabitants of high-income economies enjoy readily available fixed broadband at high speed and low cost, with penetration levels of between 15-30 subscribers per 100 inhabitants,” the report said.
“However, in the region’s low and lower-middle-income economies, fixed broadband Internet access is very limited beyond the main urban centres and broadband subscriber penetration is low or negligible.” On average, the more developed economies had broadband penetration rates that were 10 times their less developed counterparts in the region. Average broadband penetration in upper middle and high-income economies was 22 users per 100 inhabitants, while the figure for low and lower-middle-income economies registered only 2.2 users per 100 inhabitants. The exception for lower-income economies was China, where broadband penetration stands at 5 users per 100 inhabitants, the report found, adding that the country is unique in its rapid economic development, its large market size, which provides better economy-of-scale, and the emergence of domestic players such as Huawei and ZTE. “Such conditions are unique to China and not likely to be replicated in most of the other low and lower-middle-income economies in the region,” the report said.
SPEED GAP: A similar divide exists in the speed that is available for broadband services between the two sets of economies. “The gap in available broadband speeds between Asia-Pacific economies is as wide as that in subscriber penetration,” the report said. “In some of the region’s high-income economies, the minimum advertised broadband speed is faster than the maximum broadband speed in most low and lower-middle-income economies.”
For example, the report found that the minimum broadband speeds for Japan is 8Mbps, which is more than the maximum broadband speeds of all Asia Pacific economies with the exception of South Korea, Hong Kong, Australia, and Singapore! One indicator that explains this finding is the use of mobile phones to access the Internet among developing countries with less developed fixed infrastructure. Thailand, for example, had 5 million users accessing the Internet with their mobiles, which accounts for 40% of the nation’s entire Internet user base. Likewise, India, Malaysia and the Philippines all registered double digit figures for the percentage of Internet users relying on mobile phone access.
The key factor for broadband penetration is the level of income in the country, the report said. “All Asia-Pacific economies with broadband penetration in double digits have a per capita income over US$14,000 per year, whereas all economies with broadband penetration in single digits have a per capita income of under US$6,000,” it said. “Based on this relationship, income levels are the single most important driver of broadband adoption.”
LACK OF INTERNATIONAL ACCESS: The report also found that nine economies, primarily the Pacific Island nations with little or no access to submarine cable capacity, have monthly broadband subscription prices higher than the average monthly income. “Most of the economies where broadband prices exceed per capita income suffer from the lack of a direct connection to an undersea fibre optic cable. These include land-locked nations such as Lao PDR, Mongolia and Nepal, as well as Pacific Island nations such as Papua New Guinea, the Solomon Islands and Vanuatu,” the report concluded. “Lack of access to international fibre connectivity is exasperated in some cases by a lack of competition in the international gateway market.”