Submitted to Professor Kathleen Day
University of Ottawa, May 11, 2012
Despite having the technological capability to bring most of the world’s population online, there remain technological, regulatory, financial and political barriers. Data published in the Millennium Development Goals Report 2011 show evidence of these challenges. Figure 2 (below) shows that internet penetration has remained low in LDCs compared to growth in developed and developing regions since 1998. Thus, regardless of the ability of satellite and other new technologies to connect unconnected populations in LDCs, persistent low internet penetration suggests that other barriers exist.
Figure 2 Source: United Nations, 2011.
In developing and least developed regions despite regulatory and financial barriers to connectivity, internet and mobile subscriber growth is nonetheless accompanied by increasing volumes of data traffic. The challenges of this growth for telecommunications companies in the Middle East have already been discussed in terms of infrastructure in the previous section of this report. For developing and least developed countries, subscriber growth (and subsequently growth in connectivity) is limited due to the often poor and underdeveloped state of terrestrial communications infrastructure. In anticipation of these limits, wealthier countries in the Middle East have begun updating existing networks to accommodate future increases in data traffic. However, technologies are not suitable for all regions equally. How these technologies work is thus important to a discussion of expanding connected populations. In the case study to follow, the technical capabilities of two competing forms of internet and mobile networks (WiMAX and LTE) is discussed with consideration for their uses in the developing world.
CASE STUDY: WIMAX VERSUS LTE TECHNOLOGY
WiMAX and LTE are 4G technology standards that compete to provide end consumers with an alternative technology through which they can consume data abundantly at high download speeds. These are among the handful of technologies that telecommunications companies rely on to serve customers. There are a few key differences between WiMAX and LTE, which make their capabilities and suitability vary by region and circumstance. WiMAX is a fixed-line internet technology. Working much like a modem does, WiMAX can provide internet services over a radius of many kilometres from a telecommunications tower. For instance, it can provide internet access to a city or region like a hotspot does for a city block.
LTE, on the other hand, is a mobile technology, able to provide internet, data and voice services like a cellular network, with higher bandwidth capabilities than WiMAX. The offering of LTE versus WiMAX is comparable in that they both provide similar download speeds for small populations. LTE, however, is able to handle much higher traffic volume, and thus has much more capacity per user than WiMAX.
The cost associated with these technologies differs vastly. WiMAX is significantly more cost-effective to roll-out then LTE in areas with low population density. Consequently, WiMAX technology is found more frequently in less developed regions with low investment capabilities and limited infrastructure, such as rural parts of Africa and Asia. LTE, however, is under development in emerging economies where there is greater fiscal capacity to invest and higher-density areas. Wealthier countries in the Middle East region, such as Saudi Arabia and UAE, have invested in implementing LTE in order to cope with their projected data demands within the next decade.
These differences between WiMAX and LTE point to a gap in development strategies for the developing world in terms of telecommunications. Although current technological capabilities can feasibly bring connectivity to the populations of developing and least developed countries via tailored solutions such as WiMAX and LTE, other barriers prevent telecommunications from expanding into these markets. The findings concerning the industry in the Middle East suggest that lack of investment is the most significant issue. Certainly for countries experiencing growth in traffic volume and challenges in infrastructure, attracting investment to update existing terrestrial infrastructure is critical. LDCs on the other hand are limited in that growth in telecommunications is low and investment is consequently scarce. In these cases, it is important that other development goals such as improved overall health and education are addressed in order to create an economic, political and social environment that fosters business growth.
There are also technological barriers that are less evident than the macroeconomic issues described above. Satellite, for example, faces challenges in telecommunications in developing and emerging markets. Although WiMAX with lower capacity to handle high amounts of traffic would rely more on satellite backhaul to ensure uninterrupted services, it also risks interfering with particular satellite frequencies. Conflicting technical solutions pose significant issues for developing regions. As WiMAX and satellite are both viable ways to connect rural and remote regions with risk of interference, critical decisions concerning which technologies to invest in are left with national regulatory bodies. This web of issues and solutions thus involves diverse areas of expertise. The discussion here touches on only some, including technology, policy, politics and economics. The complexity of providing connectivity to the unconnected quickly becomes clear.
Nevertheless, the fiscal strength of the satellite industry in particular suggests that satellite remains a strong solution for broad-based global connectivity. As satellite is technologically capable of connecting 99% of the world’s population, it is reliant on progress in the remaining development goals to create the strong economic, social and political environment needed to spur demand and growth in the telecommunications markets of the developing world. Continue reading