Fibre broadband in emerging markets powers growth of digital economies


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The rapid spread of fibre broadband connections in emerging markets is set to drive growth in those countries’ digital economies, according to the latest update of the FT-Omdia Digital Economies Index.

India, Brazil, Kenya and Mexico are among the countries highlighted by Omdia analysts as experiencing rapid take-up of fibre broadband, which is faster and more reliable than mobile or older copper-wire broadband connections.

The Covid pandemic, which left millions of people confined to their homes and reliant on the internet for work and entertainment, created a “tipping point” that led to “a greater appreciation for not just any connection but a high quality connection’, observes Omdia chief analyst Mike Roberts. “A lot of countries [said], OK, we’re just going to have to go for it and get this done,” he adds, referring to the cost of installing the technology.

These costs can be significant, but can be reduced through “favourable regulation”. Then, once the network has been created, fibre broadband tends to be cheaper to operate and maintain, including much lower energy costs.

As well as being faster, fibre is also much more reliable and has lower latency — a measure of the time taken for data to travel to somewhere else on the internet and then come back. Fibre is needed for such consumer applications as 4K video streaming, augmented and virtual reality, and gaming.

While 5G mobile connections can deliver fast speeds and low latency, it compares badly with fibre connections as the need for fixed connections “to a large number of small cells negates any potential cost advantages”, says Omdia.

These findings all emerge from the third edition of the Digital Economies Index published by the FT and tech research firm Omdia, which is based on 16 performance measures across 51 countries. The performance measures include the availability of internet connections, smartphones and other devices, spending on streaming and other entertainment, digital payments and corporate spending.

This year’s data analysis shows that the ranking of the top 10 biggest digital economies in the world is not predicted to change much over the next four years, with only Brazil moving above Canada to take ninth place. However, it does also show that some 16 countries will see compound annual growth of more than 6 per cent between now and 2027.

The countries growing quickest include: India, where fibre broadband subscriptions are forecast to rise from 30mn to 71mn; Vietnam, where 5G services are expected to launch next year; and Mexico, which is predicted to leapfrog Italy, Australia and Hong Kong in size.

The Omdia research also reveals how digital economies are developing in emerging markets.

In China, the market for music streaming has grown rapidly, as consumers have been convinced to pay for music. Meanwhile, Disney has found success in video streaming in India by teaming up with Hotstar — having discovered that local content is crucial, according to Omdia.

China dominates again in the so-called ‘internet-of-things’, as it is forecast to be home to three-quarters of the world’s cellular IoT connections, when more and more household devices, such as fridges and kettles, are connected to the internet.

For certain industries, though, technological change will bring disruption. For example, Omdia’s data suggests that the advertising industry is set to see more upheaval, with the demise of traditional TV advertising and the rise of retail advertising, which appears on websites and apps close to the point of sale.

Advertisers’ own data will become more and more important, though, as governments and regulators impose tighter privacy rules. But the impact of macroeconomic factors on the advertising industry has become less clear-cut. Many small and medium-sized businesses have become more reliant on digital advertising, making it harder for those companies to cut back on marketing in a recession.



This article was originally published by a www.ft.com . Read the Original article here. .