FACULTY OF ARTS, COMPUTING, ENGINEERING AND SCIENCES
BROADBAND INTERNET ACCESS IN DEVELOPING WORLD ECONOMIES:
AN INVESTIGATION OF THE FACTORS AFFECTING VIABILITY
|Home | Executive Summary | Table of contents|
Much has been written about the "Digital Divide" - the generally poor access to telecommunications in the developing world compared to that in the developed world. This work looks at a proposed business model to provide broadband internet by satellite into the developing world. The envisaged business is like a mini Internet Service Provider. It runs a couple of Internet cafes and provides Internet connection to a handful of businesses. This is not theoretical. It has been implemented in a start-up business in post - tsunami Northern Sumatra, Indonesia. This business is the subject of the research. Several aspects of the business are studied:
A discussion of the results leads to some clear conclusions about the factors affecting the viability of broadband Internet businesses in the developing world. Firstly, that broadband provision will demand much higher levels of financial capital than current slow access and Internet businesses are likely to have to scale up in size to be profitable. These businesses will probably require a bigger catchment areas and carefully selected user demographics to be viable. This cuts right across the move among International Development Agencies to provide sustainable rural access. It looks impossible, with current cost structures for equipment and bandwidth service, for small rural units to achieve viability.
Scale and utilization levels appear to be the major variables determining viability in a particular market. The selection of the market in the first place is also critical, as the business climates and market conditions in some countries make it almost impossible to succeed with any business.
In most respects, the research validated the assumptions made when the proposed business model was developed, but it also highlighted further opportunities for improvement. One output from the research process is a spreadsheet which embodies the business model. This allows the viability of a similar business to be predicted against a range of viability criteria, and at different scale and utilization levels. Since realistically achievable scale and utilization indicators are now better understood, this spreadsheet starts to become a potentially useful tool. More data from different locations would be likely to refine its usefulness.
In the concluding chapter, the research methods and approach are critiqued, and the applicability of the research to other locations is considered. Finally, some ideas for further research are presented.
Edited by the author for the web.
© Copyright, 2006 Rob Longhurst (email@example.com)