- Email: [email protected]
Investment and growth of the information infrastructure: summary results of a global survey
Telecommunications Policy 24 (2000) 639}643
Current statistics
Investment and growth of the information infrastructure: summary results of a global survey夽 BjoK rn Wellenius*, Carlos Alberto Primo Braga, Christine Zhen-Wei Qiang 8712 Camille Drive, Potomac, MD 20854, USA
Abstract The information revolution has spread globally, but reliable data are not readily available on worldwide information infrastructure investment, growth, revenues, and breakdown between developed and developing countries. As a step towards overcoming this shortfall, in 1999 infoDev commissioned Pyramid Research to review and collect data in 60 countries, extrapolate to the rest of the world, and aggregate by developing regions and for the OECD. This note summarizes some of the initial results. 2000 Elsevier Science Ltd. All rights reserved.
1. Investment level The pace of investment in the global information infrastructure accelerated considerably during the 1990s. Annual investment more than doubled from about US$80 billion in the early 1990s to about US$190 billion in the late 1990s, of which about US$95 billion was in developing and transition economies (Fig. 1). The latter compares with about US$30 billion in the early 1990s and US$14 billion in the early 1980s. 夽
This note commits the authors only. * Corresponding author. E-mail addresses: [email protected] (BjoK rn Wellenius), [email protected] (C.A. Primo Braga), [email protected] (C.Z.-W. Qiang). Except where otherwise indicated, the data used in this note were prepared for infoDev (www.infodev.org) by Pyramid Research (www.pyr.com), the telecommunications division of The Economist Intelligence Unit. In this note, &&information infrastructurea refers to "xed telephone, mobile phone, leased line, and Internet services and facilities. Mexico and Korea are counted with developing and transitional economies although both are members of the OECD. Survey data are provisional. The global aggregates for the 1990s, as well as their breakdown into OECD and non-OECD countries, are likely to be robust. The breakdown by non-OECD regions is less reliable and forecasts are subject to the usual caveats. Billion is one thousand million. All investments and revenues are stated in current United States dollars. The "gure for the early 1980s refers to 1980}1984 investment in telephone companies estimated by Pyramid Research for the World Bank in 1995. Early 1990s refers to the period 1991}1993. Late 1990s refers to the period 1997}1999. 0308-5961/99/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 8 - 5 9 6 1 ( 0 0 ) 0 0 0 5 4 - 9
640
Bjo( rn Wellenius et al. / Telecommunications Policy 24 (2000) 639}643
Fig. 1. Annual investment in information infrastructure, US$ million.
There are indications, however, that growth may slow down. Pyramid forecasts that annual investments in developing and transition economies will plateau at about US$100 billion in 2000}2002, perhaps re#ecting that once pent-up demand has been met, the customer base may grow only somewhat faster than GDP. Investments in OECD countries are forecast to decline from a peak of about US$90 billion in 1997}1999 to US$70 billion in 2000}2002, re#ecting saturation of "xed and mobile phone markets (despite further growth of data and cable connections). The survey, however, does not fully capture investments underway (especially in OECD countries) that seek to reduce operating costs, accommodate changing tra$c patterns (e.g. longer holding times for Internet than voice), develops wireless access to the internet, and build new high-capacity backbone networks rather than expand the customer base.
2. Infrastructure growth The high levels of investment resulted in major expansion of the information infrastructure (Table 1). The number of "xed and mobile connections increased from about 0.5 billion in 1990 to 1.3 billion in 1999. The growth in connections has been increasingly achieved by expanding mobile services, which grew at an annual rate of about 50 percent compared with less than 10 percent for "xed telephone connections and leased lines in the 1990s. By the end of the decade, about 100 million mobile phones were added each year, compared with less than 10 million per year in the early 1990s. By 1999, mobile phones accounted for one out of three phone connections worldwide, compared with about one out of 50 in 1990 (Fig. 2). In countries as diverse as Korea, Mexico, Peru, the Philippines, and Venezuela, today over 40 percent of all their phone connections are mobile. The large size and sustained growth of the "xed telephone network was fundamental in providing the infrastructure to support the explosion of Internet service, a 20-fold growth from about seven million Internet accounts in 1990 to over 140 million in 1999. In the late 1990s about 30 million Internet accounts were added each year, compared with about 2.5 million per year in the Spot-checks in several developing countries suggest that the survey may also somewhat understate future investments in initial network build-out. Internet accounts include dial-up, ISDN, DSL, cable, and leased line access.
Bjo( rn Wellenius et al. / Telecommunications Policy 24 (2000) 639}643
Fig. 2. Mobile and "xed phone connections worldwide, million.
641
Fig. 3. Internet and voice tra$c, Gigabits million.
Table 1 Development of global information infrastructure, selected indicators, 1990}1999, million units
Main telephone lines Mobile customers Leased lines Internet accounts
1990
1999
Annual growth (%), 1991}1999
480 10 16 7
890 430 34 144
7 52 9 40
early 1990s. Internet is forecast to carry as much tra$c as voice by 2003 and three times as much by 2010 (Fig. 3). 3. Revenues Operating revenue increased from about US$300 billion in 1990 to some $850 billion in 1999 (Fig. 4). During this period, average revenue per main telephone line remained roughly constant at about US$40}50 per month while revenue per mobile customer decreased from about US$80 per month to about the same level as telephone service. Average revenue per Internet dial-up account remained stable at about US$20 per month, while revenue associated with broadband connections has #uctuated around the US$50 per month mark (Fig. 5). Total revenue is forecast to reach US$1.2 trillion in 2003. 4. Development gap Relative to population, the information infrastructures in developing and transition economies are, on average, only about one-seventh the size of those in OECD countries. With 81 percent of As indicated by the number of main telephone lines plus mobile phones per 100 inhabitants.
642
Bjo( rn Wellenius et al. / Telecommunications Policy 24 (2000) 639}643
Fig. 4. Annual revenues from information infrastructure, US$ billion.
Fig. 5. Monthly revenue per connection, US$.
Table 2 Size of information infrastructure relative to population, selected indicators, 1999 Region
Main telephone lines per 100 inhabitants
Mobile phones per 100 inhabitants
Leased lines per 1000 inhabitants
Asia and Paci"c 7.1 East/Central Europe and Central Asia 23 Latin America and the Caribbean 14 Middle East and North Africa 11 Sub-Saharan Africa 3.5 Sub-Saharan Africa excluding South 0.8 Africa
3.1 4.5 6.6 4.0 1.9 0.3
1.0 0.8 1.3 1.3 1.1 0.04
Sub total non-OECD
3.6
1.0
OECD
9.3 56
33
38
the world's population in 1999, non-OECD countries had only 43 percent of all phones ("xed plus mobile) and 20 percent of internet accounts. Di!erences among developing regions are even larger (Table 2). On a per capita basis, the gap between OECD and non-OECD countries in mobile connections is larger than in "xed telephone connections, and in turn the gap in broadband connections (leased lines) is larger than in narrowband connections ("xed and mobile voice). In some dimensions however, the gap is narrower than in the past. Compared with 40 percent of all phones in 1999, developing and transition economies had only 11 percent in 1988, and seven percent in 1981. This improvement is partly resulted from the addition in the last decade of 170 million mobile customers outside the OECD (Fig. 6) mainly in China, Brazil, and India.
Saunders, R., Jeremy Warford and BjoK rn Wellenius, Telecommunications and Economic Development, Baltimore, MD, Johns Hopkins Univeritry Press, 1994 (p. 4) and 1983 (p. 6). Telephone service accounted for over 90 percent of telecommunications investment and revenues in the 1980s, so it is meaningful to compare with the broader information infrastructure of 1999.
Bjo( rn Wellenius et al. / Telecommunications Policy 24 (2000) 639}643
643
Fig. 6. Global distribution of mobile phones.
It is too early to forecast with any degree of con"dence how quickly the developing world will narrow the new development gap posed by the advent of the internet and broadband. But with increasing reliance on private investment and competition, the developing world has been catching up with mobile service much faster than it earlier did with "xed telephones. Perhaps the new gap will close even sooner if market-driven development is accelerated. The outlook is less optimistic, however, for the least developed countries where limited access to basic telecommunications networks still remains a major impediment to the information revolution. For these countries, unless a pro-active policy of network development is adopted, the scenario of a widening international digital divide cannot be dismissed.
Current statistics
Investment and growth of the information infrastructure: summary results of a global survey夽 BjoK rn Wellenius*, Carlos Alberto Primo Braga, Christine Zhen-Wei Qiang 8712 Camille Drive, Potomac, MD 20854, USA
Abstract The information revolution has spread globally, but reliable data are not readily available on worldwide information infrastructure investment, growth, revenues, and breakdown between developed and developing countries. As a step towards overcoming this shortfall, in 1999 infoDev commissioned Pyramid Research to review and collect data in 60 countries, extrapolate to the rest of the world, and aggregate by developing regions and for the OECD. This note summarizes some of the initial results. 2000 Elsevier Science Ltd. All rights reserved.
1. Investment level The pace of investment in the global information infrastructure accelerated considerably during the 1990s. Annual investment more than doubled from about US$80 billion in the early 1990s to about US$190 billion in the late 1990s, of which about US$95 billion was in developing and transition economies (Fig. 1). The latter compares with about US$30 billion in the early 1990s and US$14 billion in the early 1980s. 夽
This note commits the authors only. * Corresponding author. E-mail addresses: [email protected] (BjoK rn Wellenius), [email protected] (C.A. Primo Braga), [email protected] (C.Z.-W. Qiang). Except where otherwise indicated, the data used in this note were prepared for infoDev (www.infodev.org) by Pyramid Research (www.pyr.com), the telecommunications division of The Economist Intelligence Unit. In this note, &&information infrastructurea refers to "xed telephone, mobile phone, leased line, and Internet services and facilities. Mexico and Korea are counted with developing and transitional economies although both are members of the OECD. Survey data are provisional. The global aggregates for the 1990s, as well as their breakdown into OECD and non-OECD countries, are likely to be robust. The breakdown by non-OECD regions is less reliable and forecasts are subject to the usual caveats. Billion is one thousand million. All investments and revenues are stated in current United States dollars. The "gure for the early 1980s refers to 1980}1984 investment in telephone companies estimated by Pyramid Research for the World Bank in 1995. Early 1990s refers to the period 1991}1993. Late 1990s refers to the period 1997}1999. 0308-5961/99/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 8 - 5 9 6 1 ( 0 0 ) 0 0 0 5 4 - 9
640
Bjo( rn Wellenius et al. / Telecommunications Policy 24 (2000) 639}643
Fig. 1. Annual investment in information infrastructure, US$ million.
There are indications, however, that growth may slow down. Pyramid forecasts that annual investments in developing and transition economies will plateau at about US$100 billion in 2000}2002, perhaps re#ecting that once pent-up demand has been met, the customer base may grow only somewhat faster than GDP. Investments in OECD countries are forecast to decline from a peak of about US$90 billion in 1997}1999 to US$70 billion in 2000}2002, re#ecting saturation of "xed and mobile phone markets (despite further growth of data and cable connections). The survey, however, does not fully capture investments underway (especially in OECD countries) that seek to reduce operating costs, accommodate changing tra$c patterns (e.g. longer holding times for Internet than voice), develops wireless access to the internet, and build new high-capacity backbone networks rather than expand the customer base.
2. Infrastructure growth The high levels of investment resulted in major expansion of the information infrastructure (Table 1). The number of "xed and mobile connections increased from about 0.5 billion in 1990 to 1.3 billion in 1999. The growth in connections has been increasingly achieved by expanding mobile services, which grew at an annual rate of about 50 percent compared with less than 10 percent for "xed telephone connections and leased lines in the 1990s. By the end of the decade, about 100 million mobile phones were added each year, compared with less than 10 million per year in the early 1990s. By 1999, mobile phones accounted for one out of three phone connections worldwide, compared with about one out of 50 in 1990 (Fig. 2). In countries as diverse as Korea, Mexico, Peru, the Philippines, and Venezuela, today over 40 percent of all their phone connections are mobile. The large size and sustained growth of the "xed telephone network was fundamental in providing the infrastructure to support the explosion of Internet service, a 20-fold growth from about seven million Internet accounts in 1990 to over 140 million in 1999. In the late 1990s about 30 million Internet accounts were added each year, compared with about 2.5 million per year in the Spot-checks in several developing countries suggest that the survey may also somewhat understate future investments in initial network build-out. Internet accounts include dial-up, ISDN, DSL, cable, and leased line access.
Bjo( rn Wellenius et al. / Telecommunications Policy 24 (2000) 639}643
Fig. 2. Mobile and "xed phone connections worldwide, million.
641
Fig. 3. Internet and voice tra$c, Gigabits million.
Table 1 Development of global information infrastructure, selected indicators, 1990}1999, million units
Main telephone lines Mobile customers Leased lines Internet accounts
1990
1999
Annual growth (%), 1991}1999
480 10 16 7
890 430 34 144
7 52 9 40
early 1990s. Internet is forecast to carry as much tra$c as voice by 2003 and three times as much by 2010 (Fig. 3). 3. Revenues Operating revenue increased from about US$300 billion in 1990 to some $850 billion in 1999 (Fig. 4). During this period, average revenue per main telephone line remained roughly constant at about US$40}50 per month while revenue per mobile customer decreased from about US$80 per month to about the same level as telephone service. Average revenue per Internet dial-up account remained stable at about US$20 per month, while revenue associated with broadband connections has #uctuated around the US$50 per month mark (Fig. 5). Total revenue is forecast to reach US$1.2 trillion in 2003. 4. Development gap Relative to population, the information infrastructures in developing and transition economies are, on average, only about one-seventh the size of those in OECD countries. With 81 percent of As indicated by the number of main telephone lines plus mobile phones per 100 inhabitants.
642
Bjo( rn Wellenius et al. / Telecommunications Policy 24 (2000) 639}643
Fig. 4. Annual revenues from information infrastructure, US$ billion.
Fig. 5. Monthly revenue per connection, US$.
Table 2 Size of information infrastructure relative to population, selected indicators, 1999 Region
Main telephone lines per 100 inhabitants
Mobile phones per 100 inhabitants
Leased lines per 1000 inhabitants
Asia and Paci"c 7.1 East/Central Europe and Central Asia 23 Latin America and the Caribbean 14 Middle East and North Africa 11 Sub-Saharan Africa 3.5 Sub-Saharan Africa excluding South 0.8 Africa
3.1 4.5 6.6 4.0 1.9 0.3
1.0 0.8 1.3 1.3 1.1 0.04
Sub total non-OECD
3.6
1.0
OECD
9.3 56
33
38
the world's population in 1999, non-OECD countries had only 43 percent of all phones ("xed plus mobile) and 20 percent of internet accounts. Di!erences among developing regions are even larger (Table 2). On a per capita basis, the gap between OECD and non-OECD countries in mobile connections is larger than in "xed telephone connections, and in turn the gap in broadband connections (leased lines) is larger than in narrowband connections ("xed and mobile voice). In some dimensions however, the gap is narrower than in the past. Compared with 40 percent of all phones in 1999, developing and transition economies had only 11 percent in 1988, and seven percent in 1981. This improvement is partly resulted from the addition in the last decade of 170 million mobile customers outside the OECD (Fig. 6) mainly in China, Brazil, and India.
Saunders, R., Jeremy Warford and BjoK rn Wellenius, Telecommunications and Economic Development, Baltimore, MD, Johns Hopkins Univeritry Press, 1994 (p. 4) and 1983 (p. 6). Telephone service accounted for over 90 percent of telecommunications investment and revenues in the 1980s, so it is meaningful to compare with the broader information infrastructure of 1999.
Bjo( rn Wellenius et al. / Telecommunications Policy 24 (2000) 639}643
643
Fig. 6. Global distribution of mobile phones.
It is too early to forecast with any degree of con"dence how quickly the developing world will narrow the new development gap posed by the advent of the internet and broadband. But with increasing reliance on private investment and competition, the developing world has been catching up with mobile service much faster than it earlier did with "xed telephones. Perhaps the new gap will close even sooner if market-driven development is accelerated. The outlook is less optimistic, however, for the least developed countries where limited access to basic telecommunications networks still remains a major impediment to the information revolution. For these countries, unless a pro-active policy of network development is adopted, the scenario of a widening international digital divide cannot be dismissed.