ICT should be used for stimulus

Investment in ICT should be a major part of any country's stimulus package to combat the global recession, says the International Telecommunication Union (ITU).

“Economists are still debating appropriate measures to combat the global recession. But we firmly believe investments in ICT and broadband networks have a major role to play in any stimulus plan. They often promise stronger marginal returns on supply and greater productivity gains than other forms of infrastructure,” says ITU secretary-general Dr Hamadoun Tour'e.

Discussing the ITU's latest study, Tour'e says the financial crisis has failed to make a dent in the demand for ICT services. He says mobile and satellite sectors are proving remarkably resilient, and consumer demand for high-speed fixed and mobile connections continuing to fuel growth in broadband subscriptions in major markets worldwide.

While the report focuses primarily on emerged markets, Tour'e says emerging markets can also benefit from increased investment in infrastructure. “ICTs offer a vital means of boosting economic productivity and generating economic recovery,” he adds.

The crisis has not stymied demand for the services; however, it has impacted on investment levels and has put a damper on some operators' plans to upgrade existing networks. “Not only do operators face more expensive and more limited financing, they also face great uncertainty over the regulatory future and revenue streams associated with NGNs,” the report explains.

According to the report, it is unlikely that many of the private firms will be interested in the risk involved in looking for funding for future upgrades. For ICT to become part of the economic recovery plans, the report suggests the public sector gets involved and helps with infrastructure investments.

“Although long-term, large-scale public infrastructure investments take longer to plan and execute, infrastructure investments are likely to generate more robust and durable economic growth than other types of stimulus measures,” it notes.

Tour'e says the financial crisis has brought about momentous change, forcing industrialised markets into recession and resulting in declining economic growth rates in emerging markets.

“Within the ICT sphere, operators face greater challenges in accessing capital and financing their network investments, slowing plans to roll out next-generation networks. Unchecked, these challenges could hold back communities that need solid broadband infrastructure to achieve their social and economic development goals,” he concludes.