$1,300 per month broadband crippling developing nations

 

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By Reuters

Posted on 23 Oct 2009 at 14:15

Developing countries risk missing out on the benefits of IT because of their lack of broadband infrastructure, according to a UN agency.

Access fees of up to $1,300 per month are depriving countries of broadband access and the possibility of building up offshoring industries, the United Nations Conference on Trade and Development (UNCTAD) claims in a report.

It also prevents people from tapping into all the advantages of mobile phones, whose use is exploding in poor countries. "The narrowing of the digital divide remains a key development challenge," said UNCTAD Deputy Secretary-General Petko Draganov.

"What is known as the broadband gap for example is becoming a serious handicap for companies in many poor countries," he added at the launch UNCTAD's Information Economy Report.

Companies and consumers are 200 times more likely to have access to broadband in developed countries than in the poorest Least Developed Countries (LDCs), the report shows.

$1,300 per month broadband

The cost of broadband access varies widely - over $1,300 a month in Burkina Faso, the Central African Republic and Swaziland against less than $13 in Egypt or Tunisia.

Broadband is essential for offshoring industries such as call centers and back offices, which many developing countries in Africa, the Caribbean and Asia wish to develop and expand.

Such industries are likely to expand despite the economic crisis because they enable companies in rich countries to cut costs, UNCTAD notes.

Broadband allows consumers to make better use of their mobile phones - rapidly overtaking computers as the ICT tool of choice in developing countries.

People in poor countries are using mobile phones for banking, to check markets and monitor the weather - reducing the need for travel and boosting productivity, UNCTAD notes.

As a result mobile phone usage is growing. In Africa there are already 20 times more mobile subscribers than fixed lines, and India added almost 100 million new mobile subscribers in the first seven months of this year.