Executive Summary provides a brief résumé of
the ITU report “Birth of Broadband”,
which has been specially prepared for the ITU TELECOM World
2003 Exhibition and Forum, to be held in Geneva, 12-18 October
2003. It includes a selection of charts, tables and boxes as
well as a table of contents of the full report, which can be
purchased online or in printed copy. This report is the latest
in the “ITU Internet Reports” series, which
includes the following titles:
for a Mobile Generation (2002)
for Development (1999)
to the Network: Telecommunications and the Internet (1997)
of these publications is available for purchase online from
the ITU website at www.itu.int/osg/spu,
for CHF 100. Printed copies are also available from the ITU
Sales Service (Fax: +41 22 730 51 94, e‑mail: firstname.lastname@example.org),
with reductions for ITU Member States and Sectors Members, and
for purchasers from the least developed countries (LDC).
full report (approximately 130 pages) gives an in-depth
introduction to broadband and its effect on telecommunications
around the world. It contains information on the latest
broadband technologies and policy developments. Individual
country case studies serve to illustrate these various
aspects. A 60-page statistical annex to the report presents
the latest available data on over 200 economies worldwide.
report was prepared by a team from ITU’s Strategy and Policy
Unit (SPU) with assistance from the ITU Sectors and the
General Secretariat. Much of the original research, including
nine country case studies, was carried out for two workshops
carried out under the ITU Secretary-General’s New
Initiatives Programme, with generous funding from a number of
ITU Member States, including MPHPT Japan and MIC Korea. These
workshops were held in Geneva on “Regulatory Implications of
Broadband” (May 2001) and on “Promoting Broadband”
(April 2003). For copies of the case studies, see the ITU
website at www.itu.int/casestudies.
views expressed in the report are those of the authors and do
not necessarily reflect the opinions of ITU or its membership.
Telecommunication Union (ITU), Geneva
to the 2003 ITU Internet Report: Birth of Broadband
of Broadband” is the fifth in the series of the “ITU
Internet Reports”, originally launched in 1997 under the
title “Challenges to the Network”. This edition has
been specially prepared for the ITU TELECOM World 2003 Exhibition
and Forum, to be held in Geneva from 12 to 18 October 2003. As one
of the “hot topics” of the telecommunication industry in 2003,
broadband is expected to be one of the highlights of this year’s
show. This new report examines the emergence of high-speed,
dedicated Internet connections that will greatly expand the
world’s access to information. Broadband will also facilitate
the long-expected convergence of three previously distinct
technologies: computing, communications and broadcasting.
introductory chapter of the report, Broadband dreams,
explains what broadband can do for users, society and industry.
Chapter two, Technologies for broadband, explains the
different broadband technologies and how each can provide
broadband access under different economic and network conditions.
Chapter three, Supplying broadband, looks at how
broadband has been successfully provided in certain economies and
how certain policies can help expand the network. Chapter four, Using
broadband, discusses the current and emerging applications
that are driving broadband take-up along with applications and
content models that show the most promise for the future. Chapter
five, Regulatory and policy aspects, examines regulatory
and policy frameworks in successful broadband markets. Chapter
six, Promoting broadband, looks at the broadband
experiences of several countries characterized by high penetration
rates and extensive networks, including conclusions drawn from ITU
country case studies on broadband, and examines why and how
broadband should be actively promoted. Chapter seven, Broadband
and the information society, looks at broadband as a component
of a society built around ubiquitous access to information,
including some of the benefits and pitfalls of total connectivity.
The Statistical annex contains data and charts covering 206
economies worldwide, with original data on broadband and
comparative information measured against a selection of variables.
The Executive Summary, published separately, provides a résumé
of the full report, focusing on each of the chapters.
most technology-driven industries, the telecommunication sector
has historically been characterized by steady growth punctuated by
an occasional leap forward, usually when a new technology is
introduced. In the latter part of the twentieth century, the
almost simultaneous arrival of two major innovations—mobile
phones and the Internet—not only changed the face of
communications, but also gave fresh impetus for economic growth.
However, as these innovations reach saturation—in the developed
world at least—the search is on for possible drivers for a new
wave of innovation and growth.
the 2002 edition of ITU Internet Reports, “Internet for a
Mobile Generation”, we examined the likelihood that the
coming together of the Internet and mobile communications will
provide a major future driver for growth. This convergence of
mobile and Internet technologies still seems likely to come to
such fruition, though the indications are that it will take longer
than expected. But in the meantime, a new technology is emerging
that promises to provide a unifying platform for three converging
industrial sectors: computing, communications and broadcasting.
That technology is “broadband”, and it is the subject of this
report. The title “Birth of Broadband” reflects the
view that broadband is still just at the start of its growth
cycle, with the main phase of market expansion still to come.
of the nature of broadband (you have to use it to understand the
benefits it offers), market take-off requires a certain critical
mass of users. Currently, around one in every ten Internet
subscribers worldwide has a dedicated broadband connection (see
Figure 1, top chart), though many more share the benefits of
high-speed Internet access, for instance, through a local area
network (LAN), at work or at school. The world leader for
broadband is the Republic of Korea (Figure 1, lower chart), which
is around three years ahead of the global average in terms of
converting Internet users to broadband. There, a critical mass was
attained as early as 2000, when prices fell below US$ 25 per
month; from which point onwards take-off was rapid (see Figure 1,
bottom chart). Over 93 per cent of Internet subscribers in Korea
use broadband (see Table on page 20).
Figure 1: Broadband
ITU World Telecommunication Indicators Database.
term “broadband” is like a moving target. Internet access
speeds are increasing all the time. As technology improves, even
ITU’s recommended speeds will soon be considered too slow.”
Figure 2: Broadband
is increasingly seen as a catalyst for economic success. Supplying
broadband is therefore an issue for both the private and public
Figure 3: Broadband
commercially available broadband, (dark shading), 2002
between broadband penetration and national income (US$ PPP)
GNI = Gross National Income; PPP = Purchasing Power Parities,
Luxembourg omitted from bottom graph but included in trend line
Internet has already spawned the creation of a host of new
applications and these are
spreading from computers to other devices. Broadband accelerates
examined the development of broadband infrastructure and
technologies, and the challenges involved in providing the service
at a reasonable price, the next question to be posed is “what to
do with it?” In short, how is broadband used today, and what are
the implications for future uses, for market development and for
Internet has already spawned the creation of a host of new
applications, including web surfing, instant messaging, file
sharing, e-commerce and e-mail. With the advent of broadband and
its faster always-on connections, the possibilities for the
development of such services are growing dramatically, opening the
path to interactive applications, especially online games, virtual
reality and other high-quality digital services.
report provides an overview of current and future applications for
broadband technologies, including consumer-oriented services such
as Internet browsing, voice services (e.g. voice over broadband or
Internet Protocol), entertainment and information supply. Specific
public domain services are also examined, including e-government,
e‑education and e-medicine, as well as e-commerce and
usage is of course interlinked with content and the evolution of
models for the development and distribution of online
content—raising associated regulatory and ethical issues—and
possible bottlenecks in the commercialization and distribution of
broadband services. These aspects are also examined in the report.
regards Internet content, for example, IPR concerns enter strongly
into play. With Internet content, the established IPR system has
had to grapple with new areas of media diffusion. The IPR
framework is being readapted, but much more work and negotiation
will be necessary. With broadband, the type and quantity of
content exchanged globally is set to increase drastically, raising
the stakes even higher. In particular, since the well-known Napster
case came to a head in 2000 over free music downloads;
peer-to-peer (P2P) technologies have been seen as a threat by the
commercial entertainment industry.
Box 1: Internet TV and
home networking in Japan
the broadband era, personal computers and personal digital
assistants (PDA) are not the only types of terminal for
accessing the Internet. Since the advent of higher-speed
networks, manufacturers have been developing various broadband
terminals, which are thus far being used by only a minority of
subscribers. Examples include video game consoles, Internet
television (TV) appliances, set-top boxes (STB) and home
Japan, the Ministry of Public Management, Home Affairs, Posts
and Telecommunications’ (MPHPT) latest annual random sample
survey concluded that there were 3.64 million people who
accessed the Internet either from their game console or from a
television set in 2002, although the precise number of units in
use is not known. Internet TVs started to emerge in 1999 in
Japan, but the products available at the time did not attract
many consumers. However, technology has evolved since then and
the user interface has also improved substantially while prices
Airboard was one of the first products and it provided a
state-of-the-art wireless video device at the time of launch.
Improvements added over the past three years culminated in the
IDT-LF3 version, which was released in January 2003. Airboard
was created as a wireless Internet tablet rather than as
with the IEEE 802.11b “Wi-Fi” standard, it can be connected
to the Internet at up to 11 Mbit/s. The device can be used
almost anywhere (within a 30-metre radius) in the home or garden
and even in the bathroom (with a protective cover). One can
watch TV as well as capturing video images of choice from the
programmes one watches for printing or sending on as e-mail
attachments. The battery life is currently quite short, but with
improvements expected in the near future, devices like these
will certainly change the way an increasing number of people use
STB is defined as a device that is connected to a TV, permitting
access to various content, including pay-per-view. Although
there are many possible uses, STBs can also be used for
broadband content distribution. Broadband subscribers can watch
broadband video programmes on their TV with an STB. In Japan, BB
Cable TV, for example, offers STBs to its subscribers as does
the fibre-to-the-home (FTTH) service provider, Bbit-Japan. One
of the main benefits to subscribers with STB is that they can
enjoy higher quality video than those with only a PC.
new development in 2002 was the emergence of home servers,
comprising an integrated PC, DVD, TV, etc. Sharp’s Personal
server (named HG-01S), launched in February 2003, is one
example. It can interconnect a PC, mobile phone, TV, and other
appliances. This device even enables the user to access their
home network when absent from home, for example by setting the
video timer via their mobile phone or watching recorded TV
programmes on their PC.
ITU case study on Broadband in Japan, at: http://www.itu.int/spu/casestudies/.
Regulatory and Policy Aspects
opening by itself has often not been sufficient to bring about the
development of meaningful competition. There is still a tendency
for the incumbent to dominate.”
other communications technologies, broadband raises a number of
regulatory and policy issues. For example, should governments
regulate broadband? What policy instruments are best suited to
promoting competition? Research seems to indicate that where both
the private and the public sectors interact to create the right
framework, broadband growth makes greater headway. Tethered by
government regulations and guidelines that are geared to fostering
a healthy level of competition, broadband operators can still grow
their services and networks profitably. Similarly, by lifting or
modifying certain restrictive regulatory practices, governments
can considerably boost the supply and demand cycle. From there, a
virtuous circle of social gain and economic growth can emerge.
addition to competition trends and policies, this part of the
report looks at, inter alia, how regulation can facilitate
the market entry of new broadband providers, ensure fair
competition in the marketplace and promote near-universal
broadband service provision.
broadband, one notable trend has been for incumbents to continue
to dominate in markets where they have been allowed to compete
alongside new entrants, and this is also true for historically
competitive markets such as mobile and Internet services. In 2002,
incumbents operating in member countries of the Organisation for
Economic Co‑operation and Development (OECD) controlled more
than 80 per cent of the broadband access market, while those in
the European Union (EU) controlled more than 90 per cent of the
broadband market (see Figure 4, lower chart).
figures corroborate the reality that, even in countries where
telecommunications markets have been liberalized, market opening
by itself has not been sufficient to bring about the development
of meaningful competition. Of course, this in part reflects
commercial realities such as limited market size, lack of economic
stability, and poor returns on investment, as well as the recent
collapse in investor confidence, all of which affect new
players’ ability to compete effectively with an established
incumbent operator. But it also reflects current government
processes for setting competition policy. In this context, it has
become increasingly important for countries to have the necessary
policies and institutions in place to deal effectively with the
increasing quantity and complexity of competition issues that are
retarding the development of meaningful competition. Once the
policy environment is right, then it can then be left up to the
dynamic between business and consumers to determine the pace and
direction of broadband market development.
Figure 4: Broadband competition
different ICT market sectors
have the largest market shares in the European Union
= Unbundling the local loop.
World Telecommunication Regulatory Database, ECTA.
is one thing to perceive the pressing need to promote broadband,
and another to engage actively and successfully in its promotion.”
reality, there is more than one answer to the question of why it
is worth promoting broadband. On a general level, analysis
consistently shows that economies that actively pursue promotion
of new technologies most often fare better in terms of access,
economic gain and technological impact. Broadband is no exception
to this. Analysis also shows that consumers often remain ignorant
about the benefits they might gain by switching to broadband, and
need some convincing of what is in it for them.
governments, broadband is a way of promoting economic development
and certain social benefits. For instance, in the Republic of
Korea and Hong Kong, China, which are currently the leading
broadband economies, telecommunication expenditure as a percentage
of GDP grew up to three times faster in the last ten years than
the global average. As many countries have also experienced,
broadband can also facilitate the provision of public services,
such as e-learning, e-health and e-government.
telecommunication companies, broadband offers a route to offset
the current slowdown in the industry. In the Republic of Korea,
the average revenue per user (ARPU) for a broadband user is up to
seven times higher than for a narrowband user. For consumers,
broadband makes possible a much wider and richer range of
applications, especially when higher speed services are available.
For instance, in a user survey in Japan, 70 per cent of users
reported that broadband had increased their usage of the Internet.
And in Iceland, some 40 foreign television channels are broadcast
over the broadband network, greatly widening the choice of
businesses, in particular small- and medium-sized enterprises,
broadband brings the advantages of access to high-speed
communications, and the ability to reach a worldwide audience that
were previously only available to larger companies. Broadband also
adds flexibility to the workplace through teleworking and remote
network access at fast speeds.
play perhaps the most important role in promoting broadband
demand. Successful broadband economies are characterized by low
prices—typically as a result of flourishing competition and
innovative pricing schemes that attract a wide variety of
customers. As price plays such a vital role in users’ adoption
decisions, it is vital to understand how policies that reduce
prices increase broadband penetration.
is one thing to perceive the pressing need to promote broadband,
however, and another to engage in its promotion actively and with
success. This is where the experiences of economies that have done
so provide valuable keys to what works, and what doesn’t. For
broadband growth and development, success factors vary from
country to country. One thing that is clear though, is that those
countries that tackle both supply and demand issues have had most
success in raising availability of broadband and in the quality
and choice of services. Judging from the experience of the most
successful broadband economies, a proactive approach to broadband
promotion is certainly one of the keys to success. Box 2 on
Estonia, describes its successful broadband promotion strategy in
2: Estonia: Tiger, Tiger, Burning Bright
in education: Far-reaching benefits
launched the Tiger Leap National Programme in 1996 in an effort
to make a developmental leap by introducing information and
communication technologies (ICT) into secondary schools. The
targets were to achieve the ratio of one PC per 20 students, an
Internet connection to each school, and basic computer training
for all teachers. Today, the programme has accomplished most of
its goals. Through Tiger Leap, 75 per cent of all Estonian
schools have broadband Internet connections and the remaining
schools have a dial-up option. More than 63 per cent of teachers
have received training courses, acquired basic computer skills,
and have been given guidance in using contemporary ICTs in
in IT education and the promotion of broadband access in
Estonian schools has been a significant factor in spreading the
use of ICTs more broadly, beyond the boundaries of the education
system. The programme has attracted considerable backing from
local governments, the private sector and international
investors, and has helped to shape Estonia's progressive
reputation. Today, 35 per cent of the Estonian population uses
the Internet, 38 per cent uses personal computers, and 18 per
cent have their own home computers. Furthermore, 90 per cent of
government agencies’ computers are connected to the Internet.
These figures place Estonia as the leader in usage of IT in
upper-middle income countries (see chart). Estonia’s broadband
penetration (at 3.4 subscribers per 100 inhabitants in 2002)
ranks it among the world leaders.
six years after the introduction of Tiger Leap, a new generation
of Estonians, accustomed to fast information access and equipped
with ICT skills, is reaching university level. As these students
grow older and continue to demand fast access to information in
different areas of their lives, the demand for ICT-related
competence can be expected to continue its rapid growth.
Bureau of Education (2002) http://www.ibe.unesco.org.;
NDP Estonia (2002) http://www.undp.ee/tigerleap/2.html.
Internet users data in italics are estimated figures.
Broadband and the Information Society
particular promise is in its capacity to enable multiple
applications over a single network, and the related economic
gains—meaning greater access at lower cost.”
weaving together of digital networks and information with the
social networks of the twenty-first century has implications for
everyone. No matter how we choose to define the “information
society”, there are many unanswered questions about how, and
why, we should promote developments that give an increasingly
central place to the use of information and communication
technologies (ICTs) in our lives. Box 3 looks at some of the
history of the information society vision, and some of the
initiatives taken to build it.
industrialized countries and especially developing countries,
there is a pressing need to address the persistent exclusion of
people, in some geographical areas and social groups, who are
marginalized with regard to access to ICTs and the knowledge and
skills to use them (i.e. the “digital divide”). Technological
innovation alone is not enough to ensure a sustainable,
growth-oriented information society. It takes multi-stakeholder
broadband is only one among many technologies present on the
scene, its particular promise—viewed through an information
society “lens”—lies in two areas: First, broadband’s
capacity to enable multiple applications (voice
communications—for example using voice over broadband, Internet
applications, and television/video and audio applications) over a
single network. Second, the related economic gains, which also
translate into lower costs for consumers. With increased data
transfer and speeds, as well as the effects of competition among
service providers; the tendency is for prices to drop, bringing
access to information closer to more of the world’s population.
As well as these particular features of broadband, network
security and ethical issues are among the topics addressed in this
part of the report, as are particular examples of how broadband
can help or pose risks to developed and developing societies in
the transition to a global information society.
some contexts, wireless broadband may hold particular promise.
“Hotspots” (e.g. in airports, hotels, cafés) are now being
expanded to create whole urban areas with wireless coverage.
Although these initiatives are only in their incipient phases,
organizations such as the United Nations have begun to embrace the
potential that wireless technologies, such as Wireless LANs, may
hold for developing countries, where basic wireline
infrastructures are often lacking. As pointed out by the UN
Secretary-General, Kofi Annan, “it is precisely in places where
no infrastructure exists that Wi-Fi can be particularly effective,
helping countries to leapfrog generations of telecommunications
technology and infrastructure and empower their people”.
well as stand-alone initiatives though, standardization efforts
are essential to harmonize interfaces and protocols between
networks and to ensure network security. Governments and industry
are already actively involved in such standardization activities,
including through ITU. Coordination
of the radio frequency spectrum also requires strong international
as does research and development (R&D), the cornerstone of
future technological development. In these and other areas,
international cooperation is an essential prerequisite to realize
any kind of global vision of the information society.
Box 3: From
technological innovation to a “knowledge-based society”
well as numerous initiatives to set out “visions” for the
information society, an emphasis on the need to foster
“knowledge-driven economies” to underpin inclusive
information societies began to gain currency in policy circles
in the late 1990s. The European Union set targets for becoming
the most competitive and dynamic knowledge-driven region in the
world. In the United Kingdom, the Department of Trade and
Industry (DTI) gave priority to building the knowledge-driven
economy in a White Paper published towards the end of the
decade. In the United States, there were strong hopes that
investment in “new economy” services would continue to boom
and that there would be substantial economic benefits from
investment in digital technologies. The World Bank’s 1998/99
Development Report made a strong case for greater investment in
knowledge as a means of tackling poverty and a range of
persistent development problems.
about the growing importance of knowledge accumulation and
absorption were often accompanied by assertions about the impact
of rapid innovations in ICTs and of increasing investment in
digital networks and their applications. Many acknowledged that
the new technological “tools” could have both positive and
negative social and economic consequences. It was also
recognized that there might not be a straightforward
relationship between investment in digital technologies and
services and positive gains for economies or social welfare.
Nevertheless, the mobilization of concerned stakeholders around
the problems posed by knowledge-driven growth continues to
emphasize the technical and economic features of these
developments over the social and cultural features.
rush to develop information society visions and knowledge-driven
economy strategies has not been limited to the industrialized
countries. For instance, the United Nations Economic Commission
for Africa developed the Africa Information Society Initiative (AISI);
Singapore developed its “Intelligent Island” vision and
others such as South Africa also developed their own visions and
strategies. In the “hope department”, many experts have
argued that ICTs would provide the opportunity for the
developing world to “leapfrog” over generations of
technology and catch-up with—or occasionally even
surpass—wealthy countries in the industrialized world. Just as
the end of the dot.com boom abruptly curtailed many
utopian dreams, contemporary economic realities have tempered
idealism. More positively perhaps, visions are now more
inclusive of progressive patterns of technological development
and of local adaptation of ICTs into individual cultures.
creation of the G8 Digital Opportunities Task (DOT) Force and
the decision to hold a United Nations World Summit on the
Information Society (WSIS), under the leadership of ITU, are
indicators of the significance of these developments at the
highest levels. Most participants in these, and many related
forums admit today that social considerations are as important
as the economic and technological dynamics of emerging
information on the World Summit on the Information Society (WSIS),
to be held in two phases in Geneva in 2003, and in Tunis in
2005, can be found at the website: http://www.itu.int/wsis.
In addition to full information on the Summit and its working
documents, the site also offers background resources; research
papers; links to worldwide information society initiatives, ICT
success stories, interest groups and organizations; press
materials, and specialized documentation on specific subject
from “The nature of the information society: an industrialized
world perspective”, in Visions of the Information Society
(ITU, 2003). More information can be found at: http://www.itu.int/visions.
Birth of broadband: Birth of a new information era?
mid-2002, with more than 60 million households and businesses
actually subscribing to broadband, and other people accessing it
through cybercafés or from connections at work or at school, it
was estimated that operational broadband networks had a
“reach” of well over 300 million people around the world. In
certain markets, broadband is predicted to be one of the
fastest-growing communications-based consumer services. In the
United States, broadband is likely to reach the 25 per cent
penetration mark more quickly than either PCs or mobile telephones
did (see Figure 5).
Figure 5: Growth in
broadband penetration in the United States
growth has far outstripped mobile growth in the four years after
reaching 2.5 million subscribers.
ITU World Telecommunications Indicators Database.
Box 4: Railway lines
lead to broadband access in rural India
capacity on existing signalling cable in India
India has one of the
world's most widespread and dense rail networks with 8’000
train stations nationwide and an average distance of only eight
kilometres between them. One approach to expanding access that
has been applied in India, is to allow winning bidders for
fixed-line services to convert their licences to wireless local
loop (WLL) licences, which has led to the use of the railway
network to provide Internet access.
In a plan launched in 2000,
the Railroad Internet project aims to make use of some 65’000
kilometres of underused cable infrastructure already in place.
This signalling cable (which is usually copper based, although
fibre is used on several main routes) runs along the train
tracks and has large amounts of spare capacity. It will be used
to transmit Internet traffic to outlying areas, avoiding laying
a new cable network.
Under the project, it is
envisioned to set up special cybercafé kiosks (providing
community Internet access and ticket services) at each train
station, with computers networked together and linked up to the
railway cable. The speed of the connections will vary according
to the quality of cable segments. The railway system can link up
to the standard telephone network through high-speed digital
links at major towns. There is also the possibility of providing
wireless Internet access within a 10 km radius of each
The project is being
piloted in a small area along 40 km of railway track
linking the southern towns of Vijaywada and Guntur. This initial
phase has been launched through cooperation between Indian
Railways (State owned) and private investors. Wide-scale rollout
may however be delayed by regulatory issues, an unsure
electrical supply, and bureaucratic processes.
Railways (2001), http://www.indianrailways.com;
BBC (2000), Fast track for Indian Internet, http://news.bbc.co.uk/1/hi/world/south_asia/769635.stm.
Annex: Broadband prices per 100 kbit/s, top 30 as % of monthly
by gross national income -GNI, and using purchasing power parities
Annex: Broadband subscribers, top 30, world, 2002
subscribers, penetration rate, and as percentage of all Internet
Note: Numbers in italics represent 2001 or latest available data.
These tables are extracts from the ITU Broadband Index included in
the full Birth of Broadband Report.
The Index measures, inter alia, how each of 206 economies
is faring in terms of broadband penetration. Comparative charts
are used to illustrate the findings.