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Chapter Highlights from ITU Internet Reports 2003: Birth of Broadband

Chapter ThreeSupplying Broadband  

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“Broadband is increasingly seen as a catalyst for economic success. Supplying broadband is therefore an issue for both the private and public sectors.”

Broadband is increasingly being seen as a catalyst for economic success in the information economy. More and more economies are focused on ensuring that access to broadband is both available and affordable to their populations. In many developed economies, broadband access has been driven largely by the private sector—particularly where effective competition is present in the market—and supported by government intervention only when necessary to correct market failure. But other governments, especially in Asia, have developed national strategies for broadband promotion, and for bringing broadband to regions, or to communities, that would not be among the first to be served through the operation of market forces.

Many different companies have entered the broadband arena, but in the majority of ITU Member States, the incumbent fixed-line operator has emerged as the dominant provider, though not always the first-mover in the market. Those countries that have prospered often have a deep-pocketed second carrier that provides a real competitive challenge to the incumbent, such as Hanaro Telecom in Korea or Yahoo BB! in Japan. Countries where no cable TV network is available, or where the incumbent cross-owns both the telephone and cable TV networks, generally lag behind their counterparts in developing broadband.

As of year-end 2002, broadband services were commercially available in 82 out of over 200 economies worldwide (Figure 3, top chart). Since 2000, global broadband numbers have increased fivefold and now stand at over 60 million. As might be expected, penetration rates are quite closely correlated with gross national income (GNI) per capita (Figure 3, lower chart), although Korea is a clear outlier in this relationship.

As broadband is entering the market at a time of technological convergence and change, supply models can vary considerably. Some end users even build their own fibre connections to their ISP. Typically, such initiatives—usually involving large companies or public institutions like schools and hospitals—aim to avoid the high costs associated with premium high-speed services from established broadband providers.

Under this model, a fibre consortium may be established, consisting of a group of customers who each own a predetermined number of dark-fibre strands within a fibre optic cable. Each customer is responsible for providing the electronics to light up the fibre, effectively creating separate private networks, which can then be connected to the backbone network. In practice, third-party professionals may carry out installation and maintenance. In Canada, this model has been deployed in the province of Quebec, where 26 school boards and the regional university research network have entered into arrangements with a number of providers. The model is also gaining in popularity among others wanting to avoid the high cost of commercial solutions. But supply has to be adapted to actual demand, and this requires market research to meet users’ real needs.

Figure 3: Broadband penetration

Countries with commercially available broadband, (dark shading), 2002

The relationship between broadband penetration and national income (US$ PPP)

Source: ITU.  Note: GNI = Gross National Income; PPP = Purchasing Power Parities, Luxembourg omitted from bottom graph but included in trend line calculations.


Relevant links

ITU World Telecommunication Indicators Database

ITU Country Case Studies on Broadband  

National Telecommunications and Information Administration (NTIA)

OECD, Broadband Access for Business

Yankee Group

Jordan Ministry of Planning - Connecting Jordanians Initiative

Alberta Super Net

National Rural Telecommunication Cooperative

Boingo Wireless


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