Internet of Things
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The World Bank’s new report, “Digital Dividends,”questions widely held assumptions about the benefits that digital technologies and services are bringing to people and businesses across the world. Rather than focusing on, for example, the relationship between Internet adoption and GDP, the authors highlight the stuttering progress that is being made in the rollout and adoption of Internet networks. They draw attention to “analog” obstacles such as education, inequality, and corruption that are preventing the benefits of digitization being properly realized.
The World Bank authors note the challenges that mobile operators face in emerging markets where they – rather than fixed operators – are the providers of broadband connectivity to the mass market. Mobile operators need to invest massively in upgrading their networks, in particular the Internet backbone or “middle mile.” They are spending up to a quarter of their annual revenues on their networks – twice as much as operators in Europe or North America. If the operators were generating incremental revenues from extending their networks the investment case would be easy. However, many face stagnating revenues as a result of a market slowdown and the substitution of operator voice and messaging services for over-the-top alternatives.
The World Bank’s report provides statistics about the number of people who are connected to the Internet in different parts of the world. The two figures that stand out are the percentage of the global population who use affordable high-speed Internet access (15%) and the percentage of people who do not use the Internet at all (54%). Even with the adoption of best-practice policies such as network sharing, fair and transparent licensing, generous spectrum allocations, and the allocation of universal service funds to broadband rollout, it is not clear that the rate of adoption of Internet adoption will accelerate. As such, new approaches, new technologies, and new business models will be needed to make a tangible difference.
The publication of the report comes at a time when Internet companies such as Google and Facebook seem to be more concerned than telecoms operators with extending the Internet to remote areas. It is still too early to say whether new approaches such as the use of drones, balloons, and unpiloted planes will be economically viable, but the fact that their backers are exploring alternatives to the traditional approaches of providing connectivity is interesting.
Network infrastructure vendors, wholesale operators, and investors in submarine cables should be monitoring alternative connectivity approaches with a view to making their own investments. Indeed, it is interesting that the roles that telecoms operators and their technology suppliers play in the value chain remain largely unchanged. There is no reason why traditional network equipment providers such as Ericsson or Nokia should not invest in new technologies to provide Internet connectivity. An expansion into new connectivity approaches would actually be closer to many of these companies’ core competencies than some of the investments they are making in IT, enterprise services, and IP-based consumer applications.
The availability of Internet access is only one of the topics covered inthe “Digital Dividends” report, but the World Bank makes it clear that broadband networks represent the foundations of the digital economy. And without a healthy, well-financed telecoms sector it will be a long time before digital services and technologies reach the less-advantaged parts of society in the less-developed countries around the world.
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Consumer & Entertainment Services
By Adam Thomas 28 Mar 2018
With US pay TV having endured the worst year in its history, thoughts have inevitably turned to the future. The likelihood remains that the immediate future will remain highly uncomfortable for everyone except the scaled multinational digital platforms.
By Evan Kirchheimer 26 Apr 2018
Service provider interest in justifying 5G investment through its potential to open new revenue streams from the enterprise segment is growing ever greater.
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