Higher broadband seen to boost GDP

Posted by admin | broadband, business, economy | Posted on October 7th, 2009

The government and the private sector should look at ways to further propagate broadband use in the country, as a higher broadband penetration level has been determined to be linked to higher economic growth.

Jaikishan Rajaraman, senior director for services at the GSM Association, said that according to an in-house study every additional 10-percent broadband penetration would jack up a country’s gross domestic product (GDP) by around 1 percent.

This was because higher broadband penetration rates redounded to a chain of direct and indirect benefits to the information and communications technology (ICT) sector, and a country’s economy as a whole, he said in a presentation during the Philippines Telecom International Summit 2009.

In the case of Argentina, he related that the country registered growth in foreign direct investments due to its good ICT infrastructure. Zambia, for its part, experienced higher productivity as a result of better connectivity, while Bangladesh, Malawi and Rwanda were able to boost their knowledge and skills and improve their services through broadband facilities, he further said.

Higher investments in broadband networks in South Korea contributed to an increase in the country’s GDP, he said. In Japan, increased broadband deployment helped prop up earnings of the country’s equipment suppliers, and content providers, among others.

“Broadband really stimulates growth. It generates an enormous amount of productivity” he said.

The Philippines could take advantage of the benefits of broadband if it could increase its penetration rate, he said.

He said mobile broadband was a good way for the country to further expand its broadband coverage.

“But the Philippines is lagging behind in mobile broadband. You have only around 100 million subscribers when you’ve had 3G since 2004 or 2005. We [the GSMA] are asking the government what we can do to help. We also want to show operators business cases where they can roll out something that’s sustainable,” he said.

‘We have to create awareness in the market that we’re around. There’s a general lack of awareness of what mobile broadband can actually do,” he added.

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