Increasing Broadband Internet Penetration
In the OIC Member Countries
14
With the launch of mobile broadband, research turned to gauging the economic effect of this
technology. Thompson & Garbacz (2011) studied the effect of fixed and mobile broadband in
economic growth among high-income and low-income countries and found that both
technologies have a positive impact in both sets of countries. Furthermore, the authors found
that mobile broadband has a considerable greater effect on low-income countries. Katz and
others (Katz & Callorda, 2013, 2016a, 2016b; Katz & Koutroumpis, 2012, 2014) also studied
the effect of mobile broadband on GDP growth in several countries of Latin America, Asia and
Africa, identifying a positive and statistically significant relationship. Similarly, a set of studies
recently completed for the GSMA showed that mobile voice and data communications had a
direct economic contribution of 1.7%, and a 2.2% indirect contribution on GDP worldwide in
2014 (GSMA Intelligence, 2015). Table 3 presents the studies measuring the impact of mobile
broadband on GDP growth.
Table 3: Research results of mobile broadband impact on GDP growth
Country Study Data Effect
High
Income
Countries
United
States Thompson &
Garbacz
(2011) Stochastic frontier model of
mobile, fixed telephony and
broadband penetration for 93
countries between 1995-2003
Positive relationship on GDP
growth
Low and
Middle
Income
Countries
Senegal Katz & Koutroumpis
(2014) Simultaneous equations of
Senegal data between 2009
and 2013 0.22% of GDP growth for every
10 % increase of mobile
broadband penetration
Jordan Katz & Callorda
(2016a) Simultaneous equations of
Jordan data between 2011 and
2014 0.39% of GDP growth for every
10 % increase of mobile
broadband penetration
Morocco Katz & Callorda
(2016b) Simultaneous equations of
Morocco data between 2011
and 2014 0.54% of GDP growth for every
10 % increase of mobile
broadband penetration
Philippines Katz & Koutroumpis
(2012) Simultaneous equations of
Morocco data between 2000
and 2010 0.36% of GDP growth for every
10 % increase of mobile
broadband penetration
Asian
countries Ahmed & Ridzuan (2013) Panel test of standard
production function for
Telecommunications
investment of eight Asian
countries between1975 and
2006
Positive relationship
Ecuador Katz & Callorda
(2013) Simultaneous equations of
Ecuador data between 2008
and 2012 0.52% of GDP growth for every
10 % increase of mobile
broadband penetration
Source: compiled by Telecom Advisory Services
Broadband impact on job creation
Beyond the contribution to GDP growth, broadband also has a positive effect on job creation.
The impact on this variable can be split into two types of effects: jobs generated by the initial
deployment of infrastructure and employment resulting from network effects and their
spillover into other areas of the economy.