Increasing Broadband Internet Penetration
In the OIC Member Countries
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competition), while eleven have less than three (an indication of low competitive intensity).
Moreover, based on this structure and the correspondent market shares of providers in
countries where complete information is available, the Herfindhal-Hirschman Index1 (an
indicator of industry concentration) indicates that only four OIC Member Countries have a
somewhat healthy competitive fixed broadband environment while the remainder is either
highly concentrated or operating under monopolistic market conditions. On the other hand,
the mobile broadband market structure in the OIC Member Countries exhibits, in the
aggregate, a moderate level of competitive intensity. Of the countries with available
information, twenty have more than three operators, seventeen have three carriers, while
twelve have less than three (an indication of low competitive intensity). Based on this
structure and the correspondent market shares of countries where complete information is
available, the Herfindhal-Hirschman Index indicates that eight OIC Member Countries have a
healthy competitive environment while thirteen exhibit moderate competitive intensity.
A compilation of research on adoption barriers among the OIC Member Countries indicates
that affordability remains a preeminent variable in explaining the non-adoption of broadband,
particularly in emerging countries. Approximately 9 % of non-adopters indicate in surveys that
affordability is one of the reasons for not acquiring broadband, while 6% mentioned lack of
digital literacy and 14% responded that they either did not need the Internet or argued that a
cultural barrier prevented them from acquiring the service.
Even if enhancing broadband adoption is a dominant priority for the OIC Member Countries,
the achievement of high broadband penetration will also entail some risks. Four risk areas,
identified in research conducted in developed countries, need to be considered and policy
initiatives need to be implemented to mitigate them. The first risk is the degradation of human
relationships as a result of intense digital consumption. The second risk, particularly among
adolescents, is the decline in conducting other knowledge gathering activities, such as reading
caused by intense digital consumption behavior. A third risk that has been studied particularly
in developing countries is cultural uprooting. An analysis of the most popular Internet sites
accessed by region indicates that in MENA countries only 27 of 100 most popular sites are
produced locally, while the remaining are either developed overseas or developed overseas
and translated to local language (Arabic, French or English). A fourth risk related to the
increase reliance on broadband relates to the economic disruption of an Internet shutdown,
outage, or cyber-attack. Given the increasing dependence on broadband for the world
economies, it is estimated that the economic impact of Internet disruption per day for a given
country ranges from $ 3.8 million for interrupting a national app (such as Twitter or Google) to
$ 15 million for an outage of the national Internet.
1 The Herfindahl-Hirschman Index is calculated by adding the square power of the market share of all industry participants.
An index of 10,000 indicates a monopolistic market structure while an index lower than 3,500 is considered to depict an
industry with a healthy level of competition. An index higher than 3,500 would indicate moderate competitive intensity.