Thursday, June 21, 2007

Internet Penertration and use in the Devloping World

The following is an extract from a speech I gave at the IBF (International Booksellers Conference) in Cape Town last week. It relates to the digital issues in the developing world.

In South America, the Internet is starting to be universally adopted. If we ignore the special case of the Falklands, the two economic powerhouses of Brazil and Argentina clearly are moving ahead in terms of penetration and adoption.

If we look at Asia the picture is somewhat more confusing, comparing highly developed countries such as Japan, Taiwan, and South Korea, with strong growing economies such as India and China and less developed ones such as Bangladesh is difficult. However, we can’t ignore the percentage of overall users already connected in India and China and can only expect this to rise significantly. This geographic region is significantly advanced in terms of infrastructure and the technology investment and these will fuel further growth.

Africa’s lights are still switch off. Those countries that are potentially moving are those closely aligned to the western economies, South Africa, Morocco, Egypt and Nigeria. Africa doesn’t have the telecommunications infrastructure to fuel growth and in particular South Africa is still heavily reliant on that old sea cable. Things will change with mobile GPS, Wi Fi etc, but growth is restricted today and the resultant environment and initial usage may well be different as a result.

It appears that the Internet needs somewhere around 60% to 80% perpetration to take off, which is a long way to go for many in the developing world.

We must also look at consumer behaviour in the developing world. Consumers may have a PC in the house but if it doesn’t have high speed connection it is very limited it will limits the potential. Many in these countries have connectivity in the office but not in the home.

The Indian government has recently declared its intent to connect all citizens to high speed broadband by 2009. Although the word ‘all’ is a bit loose, the intent and impact is potentially massive.

In many countries, initiatives are coming from the government and specific sectors such as education. Libya is investing in the $50 PC programme and China’s has stated its aim to replace text books with 165 million ebook readers. We may find ourselves no longer talking about the haves and have nots, but the connected and the unconnected.