Increasing Broadband Internet Penetration

In the OIC Member Countries

123

Figure 36: Correlation between internet penetration and electronic commerce as percentage

of total retailing (2015)

Sources: International Telecommunications Union; Euromonitor; Telecom Advisory Services analysis

Figure 36 indicates that after Internet adoption reaches a threshold of approximately 60%,

electronic commerce flows as percentage of retailing tend to grow exponentially. In other

words, the Internet creates a new more efficient retail distribution channel, which is massively

adopted by consumers. However, the red data points in figure 36 indicate that, while Internet

adoption is increasing in Saudi Arabia, electronic commerce remains stagnant. Reasons

reported by Internet users for not relying on electronic commerce sites range from the lack of

a credit card (53%), to limited digital literacy (18%), to concerns about security (12%)

Major factors that influence use of fixed and mobile broadband

So far, the behavioral patterns of Internet users have been analyzed. The analysis will move

now to understand the universe of non-adopters of the Internet. For this purpose, one should

start by measuring the extent of the so-called “broadband demand gap”. The demand gap

measures the difference between the population that can purchase broadband service because

of service availability and the individuals that adopt the service, thereby estimating the

number of non-adopters for reasons other than coverage. Considering that as of 2Q2016 the

Saudi Arabia mobile broadband coverage of the population reached 97% and mobile

broadband adoption was 83.5 %, the demand gap is 13.5% (see table 61).

Op.cit., p. 79.

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