Increasing Broadband Internet Penetration
In the OIC Member Countries
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backhaul18.
II.4. Main challenges regarding fixed and mobile broadband penetration
There are two types of barriers preventing an increase in broadband penetration. The first one
is driven by supply: citizens do not acquire broadband service simply because they lack service
in the area where they live or work. This barrier has been called the supply gap. The second
one is called the demand gap. While the supply gap measures the portion of the population of a
given country that cannot access broadband because of lack of service, the demand gap focuses
on the potential users that could buy broadband service (since operators offer it in their
territory, either through fixed or wireless networks), but do not. While the digital divide
represents the sum of both supply and demand gap, the critical success factors and policy
initiatives aimed at addressing each of them are different.
Four success factors are critical for increasing broadband service penetration. In order to
reduce the supply gap, the key factor is how to define the right mechanisms that would
stimulate the deployment of networks in regions that are still uncovered. The economics of
broadband networks (more specifically, the capital required for deployment and the costs of
operating the technology) are constrained in low-density regions, particularly when inhabited
by underprivileged population. With a low (or even negative) return on investment, private
sector broadband service providers have no economic incentive to deploy the technology in
rural and isolated areas. Under these conditions, governments are responsible for intervening
to address this supply failure. The remedies and approaches that have proven to be useful in
this domain will be addressed in Chapter III.
At the highest level of analysis, the residential broadband demand gap is the result of three
challenges 19:
• Limited affordability: certain portions of the population either cannot afford a device
or purchase the subscription needed to access the Internet
• Limited awareness of the potential of the broadband service or lack of digital literacy
• Lack of cultural relevance or interest: the value proposition of applications, services,
and content provided by the Internet does not fulfill a need of the adopting population
Each of these three obstacles are driven by one or a combination of at least five structural
variables:
18 5G wireless technology has been defined according to eight requirements (GSMA, 2015):• 1-10 Gbps connections to end points in the field (i.e. not theoretical maximum)
• 1 millisecond end-to-end round trip delay (latency)
• 1000x bandwidth per unit area
• 10-100x number of connected devices
• (Perception of) 99.999% availability
• (Perception of) 100% coverage
• 90% reduction in network energy usage
• Up to ten year battery life for low power, machine-type devices
19 Other barriers, such lack of trust in the Internet, might also exist.