Although household broadband connections in emerging markets will grow at double the number being installed in developed countries, this will not help close the digital divide between the two, says Gartner.
The international research firm says that, despite the global economic downturn, the number of household broadband connections continues to grow robustly. One in five households worldwide will have a fixed broadband connection in the home by the end of 2009, it states.
It says a total of 422 million households will have a fixed broadband connection in the home in 2009, up from 382 million in 2008, and the market will steadily grow with nearly 580 million having a fixed broadband connection by 2013.
At the end of 2008, approximately 21 countries had broadband connections in at least 50% of homes. In many countries, the rates are much higher; the highest penetration being in South Korea at 86% and the lowest being Indonesia, at less than 1%.
Although many mature markets will see a slowing down of broadband penetration rates as connectivity reaches saturation, many emerging markets are still in the early stages of broadband deployment and will see rapid growth in adoption rates.
Gartner predicts that, over the next five years, the emerging markets (China, India, Indonesia, Malaysia, the Philippines, Thailand, Latin American countries, Eastern Europe, the Middle East and Africa) will collectively provide twice as many new consumer broadband connections as mature markets: 135 million versus 62 million connections, respectively.
BRIC wins
However, despite the significant growth in connections in emerging markets, Gartner analysts say households in mature markets will continue to outnumber those in emerging markets by four-to-one. Consequently, it is unlikely that broadband household penetration in the emerging markets will catch up with mature markets within the next 10 years.
Gartner estimates the digital divide will remain in the 50% to 54% range for the foreseeable future.
Raven Naidoo, chairman of consultancy group Raidian, says the Gartner figures show almost all the developing market growth is in India and China, and that there are a number of issues that need to be addressed in markets such as SA.
”Even if we assume that the market estimates that there are two million household broadband connections in SA are correct, then this is still just 3% or 4% of the total population,” he points out.
Usefulness factor
Naidoo says price is not necessarily a factor, but rather usefulness.
“Cellphones are perceived as expensive, but useful and that is why people are prepared to pay for the services. I don't believe the same kind of useful label has been attached to broadband to the home in this country.”
Naidoo believes government strategies, such as the recently released draft National Broadband Strategy, will play a limited role in increasing penetration of broadband into households.
“Government intervention is best suited to very targeted policies, such as broadband to public libraries and schools where it can be used for free,” he adds.
Arthur Goldstuck, MD of local research firm World Wide Worx, says bridging the digital divide needs an extensive commitment by government to build infrastructure and roll out services and to ensure that literacy is developed.
“The two go hand-in-hand. If we do not have the infrastructure, people will not use it; [similarly] if we have the infrastructure and not the literacy,” he says.
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