DissCh3-2

Personal observation and anecdotal evidence from many colleagues who have worked in developing countries on every continent, lead to some further conclusions about Internet provision in these countries:

No large scale published studies were found to substantiate these assertions, but data informally collected by the author and colleagues over the past year suggest that download speeds of 8-20kbps and upload speeds of 2-8kbps are very common.

Evidence from the industrialized nations suggests that Internet users continue to want faster access, and that the nature of their usage has changed with improved access speeds. This is why the market has continued to provide faster connectivity, with 8-10Mbps access now very common and affordable in developed countries. This makes recently announced services such as Apple’s movie downloads (Kranzit and Fried, 2006) and the similar Amazon Unbox (Shields, 2006) feasible. We can reasonably expect more bandwidth-hungry Internet Protocol-centric applications to be launched as available connectivity speeds increase. Mobile data services such as High Speed Downlink Packet Access (HSDPA) have a theoretical throughput of nearly 11Mbps (Wikipedia, 2006) making it conceivable that whatever applications will be developed, high access speed will be widely available in developed countries, even whilst mobile.

These developments are likely to leave the developing world even further excluded. If applications developed in the industrialized nations use more and more bandwidth because it is widely available in these markets, these resources may realistically become usable by those with slow connections.

The third induced conclusion is therefore that there will be pressure for Internet access speeds in developing world to increase. Following on from this, we can expect that those who are able to provide faster access will enjoy a significant competitive advantage.

In a previous section, the lack of Telecommunications Infrastructure in the developing world was discussed. The use of satellite technology (especially VSAT) is one of the few currently available routes to immediate improvement in bandwidth delivery within a local area. It also has the advantage that it is not reliant on any other local communications infrastructure. However, for an Internet café business to migrate from a shared dial-up connection to VSAT requires significant additional financial capital. Since bandwidth adequate for one hundred simultaneous users costs only about twice the cost of bandwidth adequate for ten users, there is an additional incentive to scale up. In turn, this requires more capital for buildings, computer equipment, electrical power regulation, etc. Thus, the introduction of broadband access in the developing world is likely to reshape the Internet industry in such economies. The fourth induced conclusion is that a different kind of entrepreneur will come to dominate Internet provision in the developing world. They will have access to substantial capital and will require adequate returns on their investment, meaning that businesses will be larger in scale and much more focused on the mix or services required to secure high levels of utilization and revenue.

The above conclusions were used to shape the business model which is described next.

KRANZIT, T AND FRIED, I (2006) Apple uncloaks iTunes movie downloads [online] Last accessed on 9/13/2006 at URL:

SHIELDS, M. (2006) Amazon Challenges iTunes With Unbox [online] Last accessed on 9/13/2006 at URL:

Edited by the author for the web.

FACULTY OF ARTS, COMPUTING, ENGINEERING AND SCIENCES		BROADBAND INTERNET ACCESS IN DEVELOPING WORLD ECONOMIES: AN INVESTIGATION OF THE FACTORS AFFECTING VIABILITY

Chapter 3: Rationale for the research and methodology (Part 2)

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