Basic broadband availability is far less of an issue nowadays due to concerted efforts among operators, regulators, public authorities and individual communities. By late 2007, fixed DSL broadband networks were available to on average 93% of the population in EU countries. There are still many countries where significant “white spots’ exist in rural areas, but targeted schemes subsidized by public funds and using a blend of fixed and mobile technologies will plug the gap in the short term.
A commonly held view is that even though there is a role for public funding in ensuring 100% broadband availability, the market will naturally deliver a fully connected society over time via falling access costs and computer prices combined with more compelling services and content. In fact, our research has found that not only is lack of demand still a significant issue, but in many cases it is not going away.
Last year, Ovum surveyed 1,500 consumers in markets including Spain, Germany, China and the US. The major reason (35% of respondents) for no access was lack of demand. Other studies backed up the worrying phenomenon that as markets mature, there was an increase in the group responding “No, I have no plans to get broadband.”
Lack of demand should be included as a major factor in an overall frameworkthat identifies all the different factors at play in digital divides. This can be useful in formulating effective solutions, as in many cases it is a combination of these different factors at play (for example, an elderly person with limited income may not have either the money or ability to access PC-based internet).
In addition to attractiveness (demand), we have identified ability (do people have the skills and knowledge to access broadband internet?), accessibility – grouped with availability (is it possible for the disabled or those with limited mobility to access it?) – and affordability.
Large segments of the digitally excluded are put off the internet in general by overly complex devices and interfaces that cater only to the technologically literate. Inclusive and intuitive design must play a much greater role on a wider scale. Strategies to promote internet usage also need to work as part of wider inclusion efforts, embedding usage into education, employment, care and other programs designed to empower the socially excluded.
In most cases, operators will play a key role in broadband inclusion activity, but this will be in partnership with other commercial companies, public agencies, not-for-profit organizations and user groups.
Those best placed to aid in promoting adoption are those most closely linked with different user groups whose needs they understand. These could be enthusiastic technology adopters of a similar age or social group, community leaders, social workers or family members.
Digital inclusion initiatives should encourage and provide such agents of change with the necessary backing and tools to encourage and educate non-users to adopt broadband-based internet.
Companies in the ICT sector face the double challenge of reduced consumer spending and saturation of their core customer bases (early adopters and the mass market). The growth opportunities that lie in serving this “last 10–30%” of the market are there, but they are the most challenging segments to sell to, with higher acquisition costs and lower returns.
Charlie Davies is a senior analyst in Ovum's consumer practice