The role of Information and Communication Technologies (ICTs), particularly broadband, in boosting economic growth and national competitiveness is now widely recognized. The ICT infrastructure is today both a vital national asset and an investment in a nation’s future competitiveness in the growing global digital economy.
In developed countries, mobiles and smartphones are used for entertainment, browsing the web, and business interactions. In developing countries, mobile phones very often are the primary drivers of business. In the absence of fully developed and established infrastructure, mobiles are now used in a host of different ways for education, healthcare, cash transfers and—literally—to save lives. Mobile phones are empowering people to access information and make informed choices.
It took mobile phones 21 years to achieve the milestone of one billion subscriptions in 2002, compared to 125 years for fixed lines. Today, there are well over six billion mobile cellular subscriptions and mobile phones outnumber fixed lines by five to one, with half the world’s subscriptions now located in low-income countries (Figure 1). Why is mobile so popular? For consumers, mobiles are personal, customized, and increasingly powerful in the absence of fixed line alternatives. Mobiles are converging with tablets and notebooks in functionality and Internet access. For operators, a mobile access network is cheap with fewer sunk costs and a faster payback horizon of 18 to 24 months compared to fixed access networks (although the backbone network may be based on fibre-optic technologies to handle growth in data traffic).
Mobiles for Development
Today, mobiles are help provide access to basic education to millions of families with schoolchildren. They can help pregnant mothers monitor the progress of their pregnancy or track symptoms of illness. They are also enabling migrant workers to make cash payments to support families back home or farmers and fishermen to find the best price for their products (Box 1). Some commentators have argued that mobile phones played a significant role in facilitating citizen participation in the Arab Spring, mostly through convergence with social media, enabling the real-time organization of meetings to make the voices of ordinary people heard. According to the work of the Broadband Commission for Digital Development, of which I am Vice-Chair, mobile technologies—and mobile broadband in particular—can also help boost progress towards the achievement of the Millennium Development Goals (MDGs).
In many developing countries today, the mobile sector is predominantly operated by privately-owned companies. For example, the rise of large pan-regional conglomerates such as Mobile Telephone Networks (MTN), Celtel or Digicel, has proven that selling to lower income customers can still be profitable and commercially viable. These companies approach their markets with strong commercial incentives to do business; today, mobile business models and ecosystems are evolving, which are boosting socio-economic development, spawning an entire mobile ecosystem of business and entrepreneurs, as well as meeting commercial profit motives. Indeed, mass-market approaches to the sale of mobile services to lower-income customers (for example, through micro-recharge cards) have fuelled the growth of mobile companies and conglomerates. Mobile networks are relatively easy to deploy, with rapid payback horizons and tried-and-tested business models that have been used elsewhere.
Indeed, a growing body of evidence suggests that broadband can boost GDP and income, helping combat poverty and hunger. Cross-country regression work by the World Bank suggests that a 10 percent increase in mobile penetration could boost GDP by 0.81 percent in low- and middle-income countries. Country case studies suggest that mobile broadband has had a significant impact in some countries; in the Philippines, for example, mobile broadband adoption was found to add an estimated 0.32 percent to annual GDP, representing 6.9 percent of all GDP growth over the past decade.
Today, a growing proportion of mobile connections are higher speed mobile broadband. By the end of 2011, mobile broadband (3G and 4G) services were commercially available in 160 economies, up from just 80 economies five years earlier (Figure 2). Weighted by population, average global mobile broadband penetration per capita overtook fixed broadband penetration per capita in 2008. Of the world’s total 1.19 billion mobile broadband subscriptions, over a third (36.1 percent) were located in Asia-Pacific, nearly one third (28.9 percent) in Europe and one quarter (nearly 24.6 percent) in the Americas. Africa and the Arab States accounted for just 6.8 percent of total mobile broadband subscriptions (Figure 2).
Mobile broadband technologies do not simply offer the prospect of being able to access new services or more data over faster Internet connections. Mobile broadband technologies represent a set of transformative technologies that can empower communities and enable fuller participation in social, economic, and political life. They promise to fundamentally transform our way of doing things by embedding services across different contexts in different sectors and leveraging the benefits of information, including the associated statistical analysis of extra information, to help us redesign processes in a more efficient way.
For example, Radio-Frequency Identification or RFID chips could help monitor shipments of food to find the most efficient means and route of delivery, reducing or eliminating food wastage in shipment. SMS reminders and text alerts can be integrated with electronic health records to improve disease prevention, treatments, and health outcomes; consider, for example, the work of the Praekelt Foundation in South Africa, which has experienced difficulties in maximizing the impact of its work beyond Johannesburg, due to the lack of accurate electronic health records for patients in outlying areas. Given that even simple text messages can improve education and health outcomes in developing countries, redesigning systems to put “mobile first” could help transform development outcomes.
Building the Mobile Success Story
The drivers of the growth of mobile communications are by now well-known—the liberalization of the telecommunication industry opened the door to private sector participation and competition and unlocked fresh sources of investment for mobile networks. The 1988 International Telecommunication Regulations negotiated at the World Administrative Telegraph and Telephone Conference (WATTC) played a significant catalytic role in paving the way for the liberalization of telecommunication markets and trade in international telecommunications. Private sector companies have also facilitated the rollout and take-up of broadband by investing in new infrastructure, networks, and services within the window of opportunity for economies of scale. They may also conduct regular market research to identify new markets and customers, and ultimately boost consumer demand.
The role of governments in promoting the rollout of mobile broadband lies in creating an enabling environment. This may include demonstrating policy leadership in broadband regulation, including regular revisions to (and open consultations on) policy and legal frameworks for mobile broadband. In many developing countries, it has also involved the liberalization and opening up of telecommunication markets to the competitive provision of services as cheaply as possible by licensing and taxation reforms. Governments can also award additional spectrum for mobile broadband as cheaply as possible, including new market entrants. Essential enabling legislation should be enacted to encourage the deployment of mobile broadband services (for example, m-transactions, e-signatures, m-payments). In many developing countries, governments can play a vital leadership role in introducing e-government and m-government services.
The ITU’s Radiocommunication Bureau (BR) assists the Administrations of its 193 Member States by brokering and overseeing global spectrum allocation and management to ensure the efficient operation of radiocommunications, free from interference. Indeed, the World Radiocommunication Conference (WRC-12) in January 2012 was widely applauded in both the public and private sectors as having successfully laid solid foundations for global rollout of mobile broadband. ITU’s Standardization Bureau (TSB) creates many of the standards that enhance and facilitate global communications, including mobile. And ITU’s Telecommunication Development Bureau (BDT) offers training and capacity-building in spectrum management issues.
Many governments have also instituted regulatory reforms. Whether as part of government or as an independent institution, regulatory reforms can promote the rollout of broadband infrastructure and deployment of broadband services by including regular review of regulatory frameworks for broadband to ensure they are up-to-date, in consultation with the private sector and other stakeholders. Policy-makers and regulators may also wish to consider permitting new services that can help drive demand, for example mobile Voice over Internet Protocol or VoIP. Procedures for licensing, foreign entrants, Foreign Direct Investment (FDI), and the award of spectrum should be regularly reviewed and updated, and market analysis of the development of the broadband market, pricing trends, and consumer protection should be conducted regularly.
BDT’s Regulatory and Policy Unit hosts the annual Global Symposium for Regulators (GSR) to review emerging issues in regulation and publishes ITU’s Trends in Telecommunication Reform report each year as a compendium of many of the discussion papers. BDT also offers training and capacity-building in policy and regulatory issues.
Growing Challenges in a Time of Transition
Today, some of the biggest issues facing the mobile industry relate to business models for the provision of broadband services. How can mobile operators invest in infrastructure at a time of surging data traffic volumes, when over-the-top players essentially use that infrastructure to offer free services? And in a world where consumers have come to expect to use services such as Google, Skype, and Facebook for free, how can business models for previously free services be monetized to accommodate an “equitable” division of revenues between operators and content providers? This is an issue for telecom and mobile operators in both developed and developing countries alike.
Some of the emerging issues are global in nature; consider recent research undertaken by the European Telecommunication Regulators Group (BEREC), which found that up to 50 percent of mobile broadband users in Europe have contracts allowing their providers to block or throttle peer-to-peer traffic, to block VoIP services such as Skype or to block specific applications like instant messaging services. Partly as a result of this finding, the European Union has launched a review of the rules concerning mobile net neutrality.
Many emerging issues relate to inclusion and universal service. There is no doubt that market reform and privatization have led to the faster, more efficient, and more effective provision of services for the mobile industry. However, there is some evidence of cherry picking or provision of services to the most commercially profitable areas or market segments, so universal service continues to present a policy challenge. Careful consideration of universal service obligations (USOs) and the incentives created by taxation and regulation is necessary.
The World Conference on International Telecommunications (WCIT) was held in December 2012 in Dubai and reviewed the treaty that is the basis of today’s connected world: the International Telecommunication Regulations, known for short as the ITRs, which underpin how we communicate with each other by phone, computer, voice, video, or data, across the globe. As mentioned earlier, the ITRs were agreed in 1988 at the World Administrative Telegraph and Telephone Conference (WATTC) in Melbourne, Australia, and came into force in 1990. One of the four treaties forming the foundation of ITU’s mission, the ITRs is an international treaty to which 178 countries are bound.
The current ITRs paved the way for market liberalization and the spectacular growth that we have seen in our sector, including the “mobile miracle.” ITU’s membership did a great job of preparing for future needs in 1988; we are confident that they will do so again moving into 2013 – so just like the 1988 Conference, WCIT-12 has every potential to be the catalyst for the future development of ICTs. In broader terms, this means governments and industry came together in Dubai to lay the foundations for a broadband-enabled future for everyone.
Mobile communications offer the promise to significantly improve the outcomes of development work, as well as our way of doing business. Today, ICTs do not simply constitute a sector; they are a driving force for development and progress in many other sectors such as health, finance, and agriculture. ICTs can no longer be simply understood as technological tools, but as an essential ingredient and key strategic component of social and economic development. Mobile communications offer major opportunities to advance human development, and it is the responsibility of us all to ensure that we help this happen. Only then will ITU have fulfilled its mission as the UN specialized agency for ICTs of “connecting the world.”