Current development conditions of world internet industry Исполнитель

Current development conditions of world internet industry

The Internet is defined as the worldwide interconnection of individual networks operated by government, industry, academia, and private parties. Originally the Internet served to interconnect laboratories engaged in government research, and since 1994 it has been expanded to serve millions of users and a multitude of purposes in all parts of the world.

In a matter of very few years, the Internet has consolidated itself as a very powerful platform that has changed the way we do business, and the way we communicate. The Internet, as no other communication medium, has given an International or, if you prefer, a "Globalized" dimension to the world. Internet has become the Universal source of information for millions of people, at home, at school, and at work.

Internet is actually the most democratic of all the mass media. With a very low investment, anyone can have a web page in Internet. This way, almost any business can reach a very large market, directly, fast and economically, no matter the size or location of the business.

Figure 1.3.1 Internet Users in the World Growth 1995-2010

Internet use is an essential tool for small, medium and large enterprises that need information to build up their business, a quick and efficient way to stay in touch with suppliers and customers and who want to increase their productivity. According to ITU data, at the end of 2009, there were an estimated 1.8 billion Internet users globally, or just over a quarter of the world’s population. In developed countries, the share of Internet users in 2009 accounted for 72 per cent of the population. In developing countries, only 18 per cent of the population used the Internet. In LDCs, the rate was just 2.4 per 100 inhabitants. Countries with the highest incidence of poverty generally have few Internet users (Figure 1.3.2). Figure 1.3.2 Internet Users per 100 Inhabitants, 2000-2010[1]

The use of mobile phones to access the Internet – mobile Internet access – is growing rapidly and is becoming pronounced also in developing nations. Eventually it may well become more prevalent there than in developed countries, where other methods of Internet access are widely available. According to Opera, a company that provides a web browser for mobile phones, it had 46 million users in December 2009; 6 of the top 10 countries using its browser were developing countries and another 2 were economies in transition. The number of Opera browser users increased by 159 per cent in 2009 and the number of web page views rose by 223 per cent.

Table 1.3.1Top countries with the highest number of world internet broadband subscribers

In Asia, the two largest developing-country markets confirm the rapid growth of mobile Internet access. The number of such users in China reached 233 million by December 2009, up 50 per cent in one year (CINIC, 2010). According to official figures, India had 127 million wireless data users in September 2009, up 44 per cent in one year. In Bangladesh, the largest mobile phone operator is also the biggest Internet Service Provider in the country with 1.2 million mobile Internet subscriptions in 2008. Two of the top ten countries are African (Nigeria and South Africa).

In East Africa, Internet access via mobile phones far exceeds fixed Internet subscriptions. In Kenya, for example, 99 per cent of its total Internet subscriptionsin June 2009 were accessing the Internet from mobile phones (Kenya, Communications Commission of Kenya, 2009), and in Uganda there were more than 10 times as many mobile Internet subscriptions (310,058) in June 2009 than fixed Internet connections (27,590) (Uganda Communications Commission, 2009).

The benefits of broadband for social and economic development are well acknowledged. Broadband is important from the perspective of poverty reductionbecause it provides potential access to employment and business opportunities as well as life-enriching applications in education and health. While some of the benefits of electronic information dissemination can be obtained from narrowband access, the full potential can only be exploited with a broadband connection According to ITU, at the end of 2009,there were some 479 million fixed broadband subscriptions around the world (ITU, 2010a). Between 2008 and 2009, overall global penetration rose from just 6.1 to 7.0 fixed broadband subscriptions per 100 inhabitants. The gap between developed and developing countries is massive (26 versus 3.5) and in LDCs fixed broadband barely exists; the penetration rate is just 0.04 per 100 inhabitants. In other words, aperson in a developed country is on average more than 600 times more likely to have access to fixed broadband than someone living in an LDC.

Wireless offers a more practical broadband entry point for developing nations. Installation costs are lower than fixed broadband and for mobile broadband, countries can leverage on existing networks. At the end of 2009, there were 640 million mobile broadband subscriptions, corresponding to 9.5 per 100 inhabitants (ITU, 2010a). Penetration rates between developed and developing nations vary tremendously, however. Average penetration in developed countries was almost13 times higher than in developing ones. According to ITU data, mobile cellular subscriptions with access to data communications at broadband speed in theLDCs was 0.3 per 100 inhabitants in 2009.

Mobile broadband has significant potential to reduce the high-speed digital divide, as long as the possible constraint of bandwidth scarcity is addressed. The growth of such networks has been spectacular in developing nations, with one of the main reasons being the relatively low installation costs of wireless networks. For the mobile broadband potential to be fulfilled, low-income countries must license such networks and allocate necessary spectrum, encourage widespread geographic and population coverage using relevant regulatory tools and encourage new market players to widen competition in order to reduce costs.

ICTs and the Internet have also introduced efficiencies in product design, development, production, distribution and sales. These changes go far beyond e-commerce and simple online sales, which are nevertheless also growing rapidly.

In most OECD countries at least three-quarters of businesses with ten or moreemployees are connected to high-speed broadband, with business use of broadband close to 100% in some. Almost all businesses have connections of some kind.

High-use countries include the Nordic countries, but also France, Spain, New Zealand and Australia, suggesting that business and sector imperatives drive firms’ use of broadband rather than national industry structures, the relative availability of broadband, or country specific government programs or incentives for businesses to connect. However, businesses in countries in which broadband costs remain high and availability is poor are obviously constrained in their use of broadband. These countries include Mexico, Poland and Greece. To the extent that business use is persistently lagging, government attention should focus on lowering costs and extending coverage to ensure that businesses can reap the benefits of high-speed Internet to find new business opportunities and streamlineexisting business value chains.

There are also some large differences between broadband access and website ownership in some countries. These include countries with high business broadband adoption such as Korea, France, Spain and Australia. In these countries business broadband adoption does not necessarily appear to be a part of integrated e-business strategies that include exploiting business websites.

On average well over 50% of OECD households have high-speed broadband connections; in Korea, Iceland, Sweden, Norway, the Netherlands, Denmark, Finland and Luxembourg over 70% of households have high-speed access. In fact, Korea has well over 90% of households with high-speed access. These data are very encouraging for the aims of most OECD governments to have 100% availability of high-speed Internet for household access in the near and mediumterm, and to have by far the largest majority of households connected and using high-speed Internet. There is particular policy interest in connecting remote and rural areas and poorer and disadvantaged groups. Speeds are also increasing, and a number of governments aim to make all household connections optical fibre with over 100 Mbit/s. In some countries they aim to make broadband access part of Universal Service Obligations.

However, in some countries less than 40% of households have broadband access: much needs to be done in these countries to increase coverage and raise access.

The distribution of household broadband access parallels broadband subscriberpenetration (the number of broadband subscribers per 100 inhabitants).Of the top eight countries with over 70% of households having high-speed access, seven are also in the top eight countries in terms of broadband subscriber penetration. There is a strong correlation between household broadband access and subscriber penetration. This also suggests that government policy is following the right path in promoting household access via encouraging and monitoring broadband subscriber penetration.

Latest figures from ABI Research indicate that there are currently more than 500 3G network commitments and over 300 WiMAX and LTE announcements worldwide. This equates to more than two billion of the world's population being covered by high-speed data networks. The demand for speedy data networks continues to rise across the globe.

ABI Research estimates that nearly 82% of the population in Western Europe is currently covered by 3G networks, while only about 12% of Asia-Pacific's population has access to 3G services. "3G coverage in the Asia-Pacific region is set to rise dramatically in the next few years as Chinese and Indian operators such as China Unicom and BhartiAirtel begin actively rolling out new data networks," notes ABI research associate FeiFengSeet.

Network sharing has become more common in a number of mature markets. For example, French mobile operator SFR will be sharing the rural build-out of its UMTS network with domestic rivals Orange France and Bouygues Telecom. Meanwhile, T-Mobile and Orange UK have formed a new joint venture called "Everything Everywhere" in a bid to share costs and spectrum.

During the three months ended 31 March 2010 175 million new subscribers or revenue sources were added, some 70% of which came from the Asia/Pacific region.

Table 1.3.2Top 10 Growth Markets by Q1 2010 Subscriber Additions

China and India continue to dominate the wireless subscriber numbers, accounting for 54% of all net new subscribers in the quarter. However, they are not the sole drivers of regional growth. During the first quarter both Indonesia and Vietnam joined India and China in the top six group of wireless growth markets, the only non-Asian countries in the half dozen being Brazil and the United States. Together these six countries added 112 million mobile subscribers during the three-month period. Meanwhile Western Europe hit an unwanted milestone: for the first time it saw a decline in its wireless subscriber base, albeit by a small amount.
Broadband subscriber growth was distributed more evenly across the regions, with Asia/Pacific 'only' accounting for 41% of quarterly additions. Even the more mature markets of Western Europe and North America are continuing to add substantial numbers of subscribers each quarter, each region contributing 16% of the quarterly additions. The top five growth countries were China, the United States, Russia, India and the Philippines, with France, Brazil and Germany all close behind.While global annual subscriber growth has continued at a very steady pace, even during the worst of the recession, service provider revenue growth has gradually dwindled. The 1.1% annual revenue growth includes the positive impact of merger and acquisitions. Take away the acquisitions, and revenues are flat.