Mobile broadband will drastically change economies

Ericsson believes that exponential growth in mobile phones with broadband capability will be advantageous to developing economies, like South Africa.

Ericsson Group CEO and President Hans Vestberg reckons that “every 10% increase in mobile broadband penetration could translate to a 1% increase in GDP growth for a country’s economy” – this however may vary depending on the level of broadband penetration within a country, he adds.

Access to mobile broadband could create jobs. Vestberg adds that approximately 80 jobs could be created for every 1 000 broadband connections made in a developing economy.

In an intimate media briefing Vestberg shared some impressive statistics as to how the uptake of mobile broadband would benefit several economies on a global scale.

Vestberg expects there to be a 92% increase in internet access via mobile by 2016 and an estimated 5bn mobile broadband subscriptions by the year 2020.  The introduction of the $100 smartphone is expected to drive the uptake of this broadband.

With these impressive numbers pending, Vestberg believes that this will have a positive impact on the education and healthcare systems of countries across the globe –particularly in Africa.

Despite local mobile broadband costs having declined in the past few months, Vestberg says costs are still high in some parts of Africa.

Google’s Executive Chairman Eric Schmidt told Moneyweb – data costs for Africans are “20 to 30 times” what Americans pay.

Vestberg attributes the high-costs to the immature mobile market in Africa.

“For the past 20 years mobile operators were about driving voice services and now the next ten to 20 years will see them moving towards data being a strong and key revenue driver,” said Vestberg.

He illustrates this by looking at the trends taking place in the USA, where smartphones users spend 74% of their time for data intensive purposes and the remaining on calls and SMSes. This is in contrast with five-years ago when 90% of a user’s time was spent on voice calls.

Despite this surge in mobile data growth, Vestberg says penetration is still restricted to major cities, which brings the number of data users to only 7% of the world’s population.

With European and Asian countries’ still leading the pack in broadband penetration, it will be interesting to witness the changes that take place in Africa with the increase in mobile broadband.

Source: Moneyweb

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Mobile broadband will drastically change economies