Quadrupling the speed of broadband in the GCC has the potential to contribute an additional 0.6 per cent to the nations’ Gross Domestic Product (GDP), said a report.
While doubling the country’s broadband speed would lead to a 0.3 per cent increase in GDP worth almost $4.178 billion, quadrupling Internet access speeds would add approximately $8.356 billion (a growth of 0.6 per cent), added the research jointly conducted by Ericsson, global consulting firm Arthur D Little and Chalmers University of Technology.
The study also shows that additional doublings of speed can yield corresponding GDP growth stimuli.
“Broadband has emerged as a significant driver of economic growth even as we continue to evolve from an information society to what we, at Ericsson, call a Networked Society,” said Anders Lindblad, president, Ericsson Mena.
“There is no doubt in my mind that broadband, whether mobile or fixed-line, is a vehicle for economic growth, innovation and productivity.”
“The government and telecom operators here in the GCC have clearly recognized the importance of broadband and this is reflected in their collective efforts to achieve higher penetration across the region through fixed and mobile broadband solutions,” he added.
Both broadband availability and speed are strong drivers in an economy, he pointed out.
In 2010, Ericsson and Arthur D Little concluded that for every 10 percentage point increases in broadband penetration, GDP increases by 1 per cent.
This growth stems from a combination of direct, indirect and induced effects. Direct and indirect effects provide a short to medium term stimulus to the economy. The induced effect, which includes the creation of new services and businesses, is the most sustainable dimension and could represent as much as one third of the mentioned GDP growth.
This study is the first of its kind in that it quantifies the economic impact of increases in broadband speed in a comprehensive scientific method using publicly available data.