Is the business case for mobile broadband in the developing world better than we thought?

The relative economic impact of fundamental telecoms services on developing and developed economies is shown in a nifty “videographic” accompanying the Economist’s latest report on the impact of telecoms in emerging markets. Sourced from The World Bank, the chart shows an increase of 10 percentage points in broadband penetration in a developing country can lift the annual economic growth rate by 1.4 percentage points, significantly greater than the average uplift of 0.8 percentage points generated by mobile phones.

These figures may not sound like much, but as The Economist documents, 0.8 percentage points translates into a major fillip for economies growing by just a few percent a year. It seems that broadband could have a much, much greater impact. That is exciting news for the mobile industry because wireless broadband services, such as HSPA, are probably the only economically viable way to bring high-speed Internet access to large parts of Africa, Asia and Latin America.

Although the World Bank doesn’t appear to have quantified the specific GDP impact of mobile broadband, given its versatility and portability, it would be reasonable to assume that it might have a slightly greater impact than conventional broadband. In any case, the World Bank’s figures should certainly prod India, Thailand and other countries that have dragged their heels, to get on and issue 3G licenses and on terms that will encourage as wide as usage as possible.

The potential economic impact of broadband services in developing countries should also serve as a wake-up call for parts of the mobile ecosystem. The potential GDP impact suggests that people in developing countries will value mobile broadband very highly and use the service to build new businesses, meaning ARPUs may not be as low as some of the pessimists predict.