Advancements in information and communication technology are seeing the transitioning of many economies into digital economies. This transformation has become so essential in retaining the competitiveness of nations as it enables businesses to survive in an environment where newer and more innovative products are rapidly entering the market place and eating into the market share of firms not able to change fast enough.
Digitalization of traditional operations and processes hence has become a key focus in most countries which are seeking means to leverage information and communication technologies to improve their presence in the digital economy. This has created new benchmarks for measuring a nation's progress, including indicators that look into how reliably and how fast information can be communicated digitally throughout the country, and how many people and businesses have access to such advanced services.
Broadband connectivity including mobile broadband connectivity have hence emerged as important measures, given that without access to the Internet and the myriad of digital services it powers, no country is able to keep its share of global trade and wealth. As such, most countries are fast tracking the deployment of superfast broadband technologies on fixed connectivity and 4G and 4G LTE on mobile to ensure more and more homes and enterprises have faster and more reliable access to these services, hoping that while they continue to power today's economic activities, these speeds will also unleash new economic potential.
According to Akamai's First Quarter 2015 State of the Internet Report, the world's average connection speeds reached 5 Mbps for the first time, marking a 10% increase over the previous quarter. At the same time, the top 10 countries in terms of broadband speeds maintained speeds above 10 Mbps, with 6 having average speeds above 15 Mbps, namely South Korea (23.6 Mbps), as Ireland (17.4 Mbps), Hong Kong (16.7 Mbps), Sweden (15.8 Mbps), the Netherlands (15.3 Mbps) and Japan (15.2 Mbps). The report also showed the UK and Denmark as leaders in mobile broadband speeds with UK posting average speeds of 20.4 Mbps, a 28% increase from the previous quarter and Denmark recording speeds of 10 Mbps.
More recently, Analysys Mason released its International benchmarking report which was commissioned by BT, showing that with intensive deployments of broadband services throughout the country, some nations are pushing their way to be ahead in the race for higher speeds and more coverage. The UK, says Analysys Mason, with its extensive efforts in connecting more premises throughout the country and driving higher speeds via gigabit connectivity, is poised to be a global leader in 2020 in terms of high speed broadband services defined as fixed connections supporting a downstream bandwidth of at least 30 Mbps.
According to Analysys Mason, the UK has already outperformed other countries in the European region in terms of coverage, take-up and average speeds, and compares well with Japan and South Korea. It has more than 78% of premises with access to superfast broadband (as at the end of 2014) with an adoption rate of 28%. By 2020, Analysys Mason expects the numbers to climb to 95% and 78% respectively. Such high adoption rates will see the country outperforming all European states and even Japan (64%) and the US (69%). At the same time, the UK's retail broadband prices continue to be low, supported by the UK’s wholesale prices which are between the lowest available and the European average.
With the billions of dollars expected to be generated via digital services and digitalization of traditional sectors, governments are making major investments to build out the necessary infrastructure, not just the last mile connectivity, but the network core, ultra-modern data centers, cloud services and high capacity internet exchanges, to ensure that an end-to-end fully fledged infrastructure is in place to support the gigabytes of data generated, stored and accessed everyday. Toward this end, Analysys Mason's report also looked at the total government spending for superfast broadband access and found that the UK government expenditure for the infrastructure cost less than other countries as it leveraged on the private sector investment to achieve some of these outcomes.
The continuing participation of the private sector in developing the necessary infrastructure is therefore an essential part of driving a nation's transformation to the digital economy. This however, need not come just from the service providers, but also from all other firms involved in the value chain, including vendor communities that provide the technologies and solutions that enable the broadband infrastructure to deliver the end services, efficiently and effectively. With the right policies in place - macro and micro level - households and enterprises will continue spending more on digital services and infrastructure, which in turn will see faster enhancements to the technologies supporting them and which will eventually move everyone into fully digitalized economies.