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New Report Highlights Pivotal Role for Mobile Technology in Emerging Markets

Co-funded by Vodafone and the World Wide Web Foundation as part of a series of studies on the socio-economic impact of mobile, the 2011 SIM Report provides substantial evidence to suggest that extending data services to as many people as possible will deliver considerable economic and social benefit. Given the ubiquity of mobile and the growing number of low cost smart devices, it is likely that data services will be primarily accessed via mobile, particularly in emerging markets where there is no significant legacy fixed- line infrastructure. Despite this, regulators in many emerging markets are over-investing or planning to invest, at great expense, in the deployment of fixed line fibre access networks. For example, the 2011 SIM report studies the Indian states of Maharashtra, Karnataka and Rajasthan to compare the feasibility of extending fibre access networks against mobile networks. It concludes that the deployment of a fibre access network would only be commercially viable in 3% of the districts. On the other hand, it is commercially viable to provide wireless broadband coverage to 98% of the districts.

Diane Coyle, Chair of the Vodafone SIM Panel and editor of the report said, "the aim of the SIM report is to provide policy makers with evidence that will help them shape their policies to stimulate economic growth. We believe that our findings show that the current emphasis on delivering fibre optic cable everywhere overlooks other effective means of extending the use of broadband in an affordable way."

In addition to network deployment, the SIM report considers the important role that relevant and appealing content plays in building demand for data usage to a critical point where network effects and economies of scale accelerate. The use of global websites, especially social networking sites such as Facebook, is becoming widespread. This is a good sign as these sites can provide the platform for the development of local content and can help to drive the prices down. Looking ahead the report recommends that governments provide mobile-enabled services free of charge in order to increase broadband take up.

Steve Bratt, Chief Executive Officer of the World Wide Web Foundation and co-sponsor of the SIM reports, said "Affordability for low income users will require innovation that does not place most of the burden of access costs on the user. This report shows that social networking has huge potential to act as a platform for e-government applications accessible via mobile handset devices. We hope regulators allow innovations in this area to flourish and not inhibit them by preconceived notions of the right model or pricing."

"This worthwhile report", said Pieter Uys, Chief Executive Officer of the Vodacom Group, "highlights the important role that mobile technology can play in the African continent's economic and social development.  Access to telecommunications and relevant content will significantly help in crossing the digital divide in South Africa and Africa, furthering education and creating jobs."

Finally the report recommends that regulators should focus on consumer welfare when making spectrum available for service providers as the availability of spectrum will drive technology innovations and better coverage for the growing demand for mobile broadband services. Tapping spectrum as a source of short-term government revenue costs the economy billions more in lost economic value. This can be demonstrated by the recent sale of spectrum in India where the economic value of the recent 3G auction in India was around US$0.5 billion per year compared to the lost economic growth due to delay is over US$22 billion per year.

Matthew Kirk, Group External Affairs Director at Vodafone Group said, "This report is the twelfth in our series of policy papers which help us to better understand the economic complexities of the markets in which we operate. Our aim is to share our learnings with others so that we can work in partnership with regulators and policy makers to build a network fit for the next generation of users' demands. The SIM report is designed to challenge the status quo and encourage us all to think more widely about the markets in which we operate"

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