Telecom Investment Research Note
The explosion in mobile communications in the developing world has created social and economic changes that have exceeded all expectations and predictions – even those made as recently as five years ago. There are still countries lagging behind, but now is the time to move on to the next stage – and that means broadband. Already the developed world is showing an enormous appetite for mobile broadband, so the demand is most certainly there.
The rapid development of low cost Smartphone, projected to approach $50 soon, and tablets, now already under $200, means that many people in the world who are not PC literate or have the ability to buy a PC - will be able to experience the broadband Internet for the first time. Thus in the same way that the majority of people in the world made their first phone calls with a wireless phone; the majority of people in the world will have the first rich media Internet experience via wireless communications.
Broadband is the facilitator for a range of services that are of great value to governments, businesses and people in rural and regional areas as well as in the cities. However a holistic government policy is needed to achieve the associated social and economic benefits – a policy that takes into account the ICT infrastructure requirements of the various sectors, the most appropriate use of mobile spectrum for both mobile broadband and the fixed-wireless network, and how this fits into the overall national broadband plan – particularly in relation to the development of fibre optic networks for the underlying core.
The demand for broadband is clear. People are prepared to pay for it if the price is affordable. Broadband facilitates social and economic developments in healthcare, education, media, e-commerce, m-banking, public safety communications. etc. Businesses and governments will invest in e-services if the infrastructure is in place – but utilities-based infrastructure may be required in order for the underlying infrastructure to be put in place.
This report explores the importance of spectrum to the development of mobile broadband as a utility. The report is designed to provide current observations which may assist investors, analysts and industry participants in making investment and business decisions.
Once positive and comprehensive trans-sector (national purpose) policies and the costly underlying infrastructure are in place, the business model for private investment is fairly straightforward.