Consumers across the planet face a myriad of obstacles in gaining access to the internet – particularly in developing markets — as data from a couple of new reports indicate.
People with access to the internet (both fixed and wireless) still represent a minority of the world’s population – just 40 per cent. In India and Indonesia, with a joint population of 1.56 billion, that figure drops to just 25 per cent, according to Cisco’s latest Visual Networking Index (VNI).
On the positive side, Ericsson’s Mobility Report forecasts the number of global mobile broadband subscribers will more than double from 3.5 billion last year to 7.7 billion in 2021. That’s 15 per cent annual growth.
The most common barriers to connectivity, not surprisingly, are a lack of access and/or high prices. Many times, these are artificially created by poor government policies and regulations that impede competition.
A couple of recent stories in Sri Lanka and Vietnam highlight both the existing problem and a solution.
In Sri Lanka the country’s largest mobile operator Dialog Axiata is looking to expand into the fixed-line broadband market after jointly investing in the Bay of Bengal Gateway submarine cable with five foreign operators. Before the new cable came online, all operators had to buy bandwidth at high prices from state-run Sri Lanka Telecom (SLT) and fixed-line operator LankaBell.
The country’s broadband market, however, is controlled by SLT, whose national backbone covers only about 25 per cent of the island. Dialog and other operators can install last-mile connections into businesses and multi-residential units such as apartments, but only SLT is allowed to install last-mile connections to homes.
Sanath Siriwardena, Dialog’s GM of broadband development and promotion, summed up most people’s sentiment when he said: “I believe there shouldn’t be just one operator for people to choose from”.
Over the last year Dialog also has begun installing a fibre-optic backbone to reach the other 75 per cent of the country, but even with a 41 per cent share of the country’s 22 million mobile subscribers, it faces an uphill battle negotiating with the Telecommunications Regulatory Commission to loosen SLT’s grip on the fixed broadband market.
Breaking the monopoly
To the north in Vietnam, the city of Hanoi passed a new regulation, which went into effect last week, which mandates that at least two telecoms operators be allowed to provide services for apartment buildings.
The move is intended to break up the currently monopolies that generally operate in most buildings.
The city’s government decided to regulate the “installation and the management and usage of centralised in-boxes, telecommunications cabling systems, and coverage systems in high city buildings with multiple owners”, Viet Nam News reported.
The newspaper gave the example of a resident who used internet service from FPT, but then moved to a new apartment that only had Viettel service.
The new rule will give that person at least a choice of two in the future and inject some much-needed competition into the market. That’s something consumers around the world can benefit from.
It’s interesting to note that both Sri Lanka and Vietnam each have five mobile operators, and it’s no coincidence there’s a huge gap between the expected growth of global consumer fixed internet traffic and mobile data traffic between 2015 and 2020 – 20 per cent CAGR compared with 57 per cent, according to Cisco’s VNI. That’s twofold growth over five years for fixed vs nine-fold growth for mobile.
Choice and competition are always better and must be encouraged by regulators.
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.