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Broadband connectivity drives economic growth and jobs - report

7th June 2011

By: Loni Prinsloo

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Access to broadband connectivity is a strong driver of economic growth and new jobs in countries, a recent study by the Broadband Commission for Digital Development showed.

The report entitled ‘A Platform for Progress’, argued that broadband should be coordinated on a countrywide basis, promoting facilities-based competition and supported by policies encouraging service providers to offer access on fair market terms, with efforts coordinated across all sectors of industry, administration and the economy to achieve optimal benefits to society.

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The data showed that 10% a year higher broadband penetration correlated with 1.5% greater labour productivity growth over the following five years.

The study estimated that broadband could create more than two-million jobs in Europe by 2015, while a study in Brazil reported that access to broadband had already added up to 1.4% to its employment growth rate.

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However, only one out of ten people in Africa is using the Internet.

Fixed broadband penetration was virtually zero in 2005 and had risen to only 0.2% by the end of 2010, compared with a world average of more than 7%.

The major problem is that while prices in the developed world had come down significantly in the last two years, Africa continued to stand out for its relatively high prices.

Fixed broadband Internet access in particular remained prohibitively high, and, across the region as a whole, still represented almost three times the monthly average per capita income.

The report stated that the move towards a new communication paradigm of ‘always-on’ Internet connections with high transmission capacities required significant investment in infrastructure upgrade or the construction of new broadband networks.

However, it also pointed out that even though these network investments were expensive, it also led to direct and indirect employment opportunities, as well as growth in a country’s gross domestic product.

Broadband access has been a talking point for many years in South Africa, but despite previous government initiatives in the broadband space, not much has changed for rural South Africans.

New ambitious targets by both government and the private sector may, however, bring fast Internet access to most South Africans.

Communications Minister Roy Padayachie said in his Budget vote that an initial R450-million had been allocated for the provision of broadband services and that an integrated broadband implementation plan would be finalised in the current financial year.

Government aims to ensure that all South Africans have access to broadband by 2019.

Science and Technology Minister Naledi Pandor promised in her department's Budget vote that every major campus of every university would have broadband connectivity to the South African National Research Network by the end of this year.

The private sector, and specifically cellular operators in the country had also been playing a key role in bringing broadband to all South Africans.

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