Summary

Studies have shown that adoption of broadband is associated with faster economic growth via three broad categories of impact: “direct” effects on employment and GDP during investment, “indirect” effects associated with the telecom sector supply chain, and “induced” effects in the wider economy. But, in fact, there are a number of factors specific to each economy that determine overall impact, with institutions and regulations in particular being key enablers to unlock the economic benefits.

Auriol and Fanfalone make a credible effort to analyze an inherently complex undertaking. The focus on broadband indicators – availability, quality, and affordability – is a valid step forward. However, broadband penetration alone is used to assess costs and benefits, as a proxy of network adoption. Speed is excluded from the list, despite the fact that policy makers around the world are prepared to make considerable investments in faster networks, which they often expect to deliver increased benefits. The analysis presents only a fixed impact across technologies, thus making the cheaper ones score higher in terms of the costbenefit approach. This is not unexpected, but still represents a simplification of the actual situation.

A common – implicit – assumption in these undertakings is that broadband availability is the same as adoption, which is not necessarily true. Connecting the unconnected yields economic benefits orders of magnitude greater than simply upgrading existing subscribers to higher speeds, especially in the least developed countries (LDC) context. Besides, the marginal impact of broadband in developing countries is never contrasted to the generic effect of the broader global targets. Ideally, these targets should also form part of a wider approach to some key challenges. For example increasing broadband penetration by 10 percent in LDCs can have a range of effects across the post-2015 agenda: reducing poverty (SDG 1), increasing access to education (SDG 4), improving health monitoring, prevent outbreaks of epidemics (SDG 4), and investing in local infrastructure (SDG 9).

The study builds on projections for developing countries based on evidence from rich economies, which can be misleading. At the same time, it takes a relatively naïve approach in devising broadband targets based on the access medium (fixed or mobile) instead of more cost-effective scenarios that take into account regional population densities and foreseen usage.