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Broadband Beats Mobile Phones in Boosting GDP

By Wayan Vota on October 6, 2009

Mobile phones are a ticket out of poverty for millions. No argument there. But check out this global ICT study by Christine Zhen-Wei Qiang, an economist at the World Bank for a surprising comparison with broadband Internet.

She found that for every 10 percentage points increase in broadband penetration, there is an incremental increase in economic growth of 1.3 percentage points. This compares to the 0.8 percent increase for mobile phones. I would not have expected such a great differential – almost a 2x greater GDP boost via broadband than mobiles,

Yet, because of the greater reach and density of mobile phone usage – more mobiles than light bulbs in Uganda – they have a larger aggregate effect than broadband, for now. Soon though, we should see the new broadband connections in East Africa competing with mobile phones in penetration and usage.

Back at the macro telecommunications level, developing countries received a greater boost from all ICT formats than developed countries. Christine says this is because telecommunications services in the developing world have more to gain when ICT helps public and private sectors:

  1. improve the functioning of the markets,
  2. reduce transaction costs,
  3. and increase productivity through better management.

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Written by
Wayan Vota co-founded ICTworks. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of his employer, any of its entities, or any ICTWorks sponsor.
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2 Comments to “Broadband Beats Mobile Phones in Boosting GDP”

  1. Sam duPont says:

    my sense on this is that mobile and broadband will merge into one technology before much of the developing world / organizations working there will have to make a decision one way or the other…


  2. Wayan says:

    Lack of broadband-based Internet connections in particular obstructs development. Most applications that would accelerate development most effectively are network-based and require proper ICT infrastructure in order to function properly. Such applications include remotely assisted healthcare, remote learning and teaching, crisis management, electronic administration and trade, and network-based, commercially marketed services.

    The broadband gap between the industrialised and developing countries becomes wider