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As per the report, some of the most advanced countries such as US, Australia, lag behind Asian countries in broadband penetration. What are the possible reasons? Is it because extensive use of wireless technologies?
The reasons are purely technically when it comes to penetration, and more cultural when it comes to usage. Prohibitive prices are the main reason why broadband penetration is not higher in the US, for instance. Infrastructure still in the developing phases and lower PC adoption are causes in some of the other countries on our list. When it comes to usage, the age of consumers is a big factor, as is their online tenure. US consumers have been online for a while now, and there is some clear sensory-overload occurring, as shown by people’s attitudes on advertising, email spam, effects on health, to name just a few. Japanese consumers, for instance, are also much older, and have a work environment (long hours, long commutes) sometimes not conducive to spending much time online. On the flipside, some Asian consumers, such as the Chinese, have had a shorter online tenure, and online users are younger on average. They are still just getting “hooked” on different aspects of the Internet. Socio-economic and political factors also come into play – see China, where consumers have a dire need for information given the specifics of their current regime.
We have not seen a dramatic negative effect of mobile Internet use on broadband home use – in fact, in the country with the highest penetration of mobile Internet, Japan, broadband users are actually even less engaged with their mobile Internet connection than the general population, which shows that mobile Internet connections aren’t the ones detracting from using a home connection.
On what basis do you state that cheaper computers can solve last mile connectivity issues?
Cheaper computers do not solve last mile connectivity (and our report doesn’t state that). Less expensive computers do solve, however, the problem that comes before connectivity issues – if consumers don’t have PCs, they won’t have any reason to be interested in broadband, and in the Internet in general for that matter, so discussing broadband adoption would be a moot point in a territory without computers. Consumers in India won’t purchase expensive computers if they cannot afford them, so manufacturers need to tailor their offering specifically for India – and some of them are already doing that.
The report states that cheaper computers can increase broadband penetration. But, a major challenge here in India is more to do with last mile connectivity. It looks like a chicken and egg situation to me. Unless last mile connectivity issues are solved, how can cheaper computers drive penetration?
You’re right, we’re definitely faced with a bit of a chicken and egg situation in India, but I would still give PC penetration the role of broadband adoption launching pad.
The way I see it, even if the government works on efficient and timely broadband deployment, but consumers don’t have a PC in the household to care about broadband, adoption will continue to lag. However, if PC adoption rises, consumers will seek out an Internet connection as soon as that’s available to them, and not any connection, but a broadband connection if it’s within reach, both in terms of availability and price. Awareness of the advantages broadband can bring about can only happen through exposure to a PC, that’s why it’s important to increase PC penetration. PC ownership followed by education about the value of the Internet via offline channels (TV, newspapers) will trigger broadband adoption.
Consumer demand creates two things: a government eager to meet consumers’ expectations (especially when these expectations coincide with its agenda) and competitive offers from service providers. The reverse scenario is also possible, where PC adoption is triggered by broadband availability. However, that scenario will take longer to materialize, as simply having the wiring for a broadband connection on the street outside one’s home or a WiMax tower around the corner will not illustrate its value. Consumers need to understand the value of a PC first, and then realize why the Internet is a source of knowledge, and thus power. This is more of a push situation, where consumers will eventually get a broadband connection, because it’s there, and they have finally bought a PC. Consumers willingly seeking a connection, rather than providers pushing a connection onto them, will determine the speed of broadband adoption, which in today’s age makes a world of difference.
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