Visit Our Sponsors
There are multiple challenges to be addressed. The issues are particularly thorny in emerging markets, thanks to economics that are often unfavorable, low population densities, low literacy rates, and lack of local digital content. In many such countries, two broad issues affect the ability to provide affordable internet access: expanding network coverage and building network capacity.
Expanding Network Coverage. The economics of expanding network coverage are determined by a variety of factors, only some of which are related to technology. Population density, topography, distance from fiber connection points, and consumer purchasing power are all huge contributors to cost and revenue calculations. The economics of expanding coverage to especially poor and remote areas are often the most challenging, particularly using traditional business models. Ironically, it is for people living in these same areas that internet access could have the greatest impact.
Building Network Capacity. Not being able to meet rising demand for network capacity is often an issue of lack of sufficient spectrum allocated to mobile use—because so many users in emerging markets access the internet on mobile devices, and mobile is expected to be the predominant technology for billions of new users as well. Too often, policy makers and regulators focus on the short-term value of spectrum licenses rather than maximizing the use of this precious asset, and the result is a lack of available, affordable spectrum for mobile usage.
Encouraging Broader Internet Usage. Another critical challenge is to bring more people online, particularly in emerging markets. In many developed countries, there is a 30 to 50 percent difference between the number of people who have access to digital networks and the number who are actually online. In emerging markets, this gap jumps to 55 to 75 percent—and up to 90 percent in some cases. BCG’s research shows three main reasons for lack of adoption: perceived absence of need (resulting largely from lack of local-language content), followed by insufficient skills, with affordability as a distant third. Local content in local languages is vital for attracting local users and serving local needs. Governments also can help drive digital engagement with their own online services.
Enjoy curated articles directly to your inbox.