Digital divide creates business opportunities

Closing the deepening gap between digitally connected populations and those cut off from the Internet is a global challenge, but one that presents ICT companies and other innovators with significant business opportunities, according to a new report by Huawei.

  • 8 years ago Posted in
Huawei has released Digital Enablement, a research paper aimed at accelerating progress in giving people access to digital information and resources.
 
Digital Enablement calls on the ICT industry to develop new business models to address the digital divide, making the investments needed to provide users with life-changing technologies. It also provides case studies showing that the ICT industry is already working on initiatives to do these things — and to do so profitably.
 
“Mobile communications play a significant role in bridging the digital divide,” said Huawei Deputy Chairman and Rotating CEO Ken Hu. “We need to focus on availability and affordability. This requires ongoing technological innovation both in infrastructure and on the device side to drive adoption in underdeveloped regions.
 
“In addition, we hope that regulators can grant more spectrum resources to mobile communications, and further subsidize network rollout in underdeveloped regions. We can work together to promote mobile communications for inclusive and balanced growth around the world.”
 
The digital divide is narrowing, as more internet connections are built and smartphones become more affordable. Yet the gap between the electronic haves and have-nots is also deepening, while becoming tougher to bridge globally.
 
Adam Lane, Director of Sustainability Programs at Huawei, noted that more than 87% of the world’s population is now within range of a mobile signal. But up to 1 billion people remain unconnected to any form of telecommunications, and 4 billion remain offline and unable to access vital information. “In developed countries up to 15% of the population remains offline.
 
This represents a large potential market of customers, but it will take new thinking and business models to reach them and provide services profitably. Similar challenges face those in developing countries, where traditional models or solutions are neither economically viable for operators nor affordable for lower income populations,” said Lane. “As the world works towards the U.N.’s newly released Sustainable Development Goals, technology can play a vital role. The next five years represent a crucial opportunity to bridge the gap, bringing the power of 5G networks, the internet of things, advanced cloud analytics and more to everyone, whether rich or poor, young or old, urban or rural, male or female. There is much to be done and it is imperative we do it together, quickly and effectively.”
 
In the report, Huawei identifies a number of innovations that help connect people. Bridge Africa, for example, promotes digital literacy by going door-to-door in Cameroon to explain the benefits of getting online (and selling SIM cards to help residents do so.) BT’s efforts in the UK to develop solutions and pricing plans for lower-income residents are also highlighted. Other examples focus on growing the social and economic value of getting connected, which can bring new revenue opportunities for telecom operators in the areas of mobile health, agriculture, education, employment, and money transfer services.
 
Digital Enablement  was based on interviews with more than 150 senior executives, a meta-analysis of digital divide research, and a global investigation to identify best practice. The research introduces a new framework for defining and analyzing barriers to digital enablement and spotlighting leading solutions.
 
Barriers to greater digital adoption include a proliferation of unsustainable pilot projects and business models, and poor internet connection quality. The research indicates that the quality of an internet connection has grown increasingly important, and that there is a growing divide between those with a slow 2G connection and those with speedier broadband.
 
Key findings included the observation that, although the UK has mature communications infrastructure, a deep divide exists in the regular use of digital services. The paper also notes that mobile data services costs were high in many of the 12 nations surveyed: 9% of average household income in Kenya and 3% in South Africa. Mobile services were taxed heavily, hindering digital adoption. Users’ appetite for digital was affected not only by Internet penetration – highest in the UK and Russia – but also by local language content, which drives engagement.
 
The UK ranked first among 12 nations for access, ability and appetite for digital services – it was second for affordability. “Although the availability of broadband services is improving, specific challenges remain for some consumers and business,” said the report. These included rural availability and access to superfast broadband for small and medium-sized enterprises.
 
In the mid-rankings was Mexico with fifth place for access, third for affordability, seventh for ability and fourth for appetite. “The biggest barriers to digital inclusion in Mexico are digital literacy and awareness.”
 
Myanmar was eleventh or twelfth for the indicators – near the bottom of the ladder. Internet service coverage via fixed line is below 1% and mobiles are restricted to urban areas.
 
“These issues actually provide opportunities for telecoms companies. If they adopt a market-based approach to develop business-oriented solutions, then their operations will benefit while communities and individuals will be better digitally connected, opening a world of opportunity and growth. We’ve developed 19 recommendations to help companies, governments and charities develop sustainable, impactful solutions and provided several tools as well,” said Lane.
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