Broadband Deployment: Importance of Both Supply & Demand
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1 Joint WPIE/TISP Workshop Broadband: Infrastructure, Applications & Use Paris, France 5 December 2001 The Demand Side of Broadband Deployment: The Importance of SMEs Matthew Ivis, Canadian Chamber of Commerce & Canadian Council for International Business Canadian Chamber of Commerce La Chambre de Commerce du Canada Broadband Deployment: Importance of Both Supply & Demand S u p p l y Infrastructure Rollout Competition Business/ Household Penetration Quality, Cost, etc. D e m a n d e-business Sophisticated use of Technology Skills & Technical Literacy Applications SMEs: Key to Stimulating Demand for Broadband SMEs represent a significant proportion of economic participation 64% of total private sector employment 97.5% of all firms have less than 50 employees SMEs represent a significant social institution: Where majority of citizens work, receive training and are exposed to technology Citizens bring these experiences/skills home and apply them to their personal context = Demand for Applications and High-Speed Increased Infrastructure Productivity, Job Creation, Standard of SME Use of = Living e-business Employee/Citizen Exposure to Technology, = Technical Literacy
2 Supply: Impact of munications Liberalization Canada is one of the leading OECD countries in terms of its performance in the telecom sector Canada has preformed relatively better on average than most OECD countries 1 New entrants share 49% of business long distance minutes. The international telecommunication minutes shared 50/50 between incumbent telephone companies and competitors. Competitors share 39% of data revenues. Non-incumbent carriers share 41% of Internet subscriber market. Competition has resulted in the benefits of lower prices, more choice, improved quality of services, and a rapid development of high speed Internet access. 1. Source: OECD - DSTI/ICCP/TISP(2001)7 Supply: Impact of munications Liberalization Internet Access Costs Residential Broadband (DSL) Pricing: Cost of 40 peak hours per month, (amortized cost - U.S. $/month) September 2000, in U.S. $ $77.19 $80.38 $69.49 $65.85 $57.12 $52.12 $49.19 $48.33$47.58 $37.94 $39.95 $29.13 $23.76 $27.76 Japan Germany Italy U.S. U.K. Japan Canada Note: Internet access basket for 40 hours at peak times using discounted PSTN rates - September 2000, including VAT Source: OECD Communications Outlook, 2001 U.K. British France France Japan NTT East Italy Italia Germany Deutsche Telekom Canada Bell Canada U.S. Verizon Notes: Amortized cost averages initial installation and equipment costs over a 12-month period together with the monthly lease rate. Source: DSL Worldwide Directory 3, Point Topic Ltd.., March Canadian Supply is Strong But How is Our Demand? Business Size Selling Purchasing Web Site Internet Use Source: Statistics Canada, SECT, 2001
3 Canadian Supply is Strong But How is Our Demand? What is the main reason your company does not have highspeed Internet access? No need Not available in area Cost 21% 30% 39% Other DK/NR 5% 6% 0% 20% 40% 60% 80% Base: Businesses with dial-up Internet access; n=736 Source: Rethinking the Information Highway -- Security, Convergence and the E-Consumer/E-Citizen, EKOS Research. (February 2001) CANADIAN E-BUSINESS OPPORTUNITIES ROUNDTABLE Private sector led initiative established summer of 1999 to accelerate Canada s participation in the Internet Economy In January 2000, released Fast Forward: Accelerating Canada s Leadership in the Internet Economy Concurrently created six e-teams to implement its proposed initiatives February 23, 2001, the Roundtable released Fast Forward 2.0: Taking Canada to the Next Level Responding to the SME Challenge 7 Regional Roundtables Over 2100 Businesses Over 1500 SMEs Edmonton Winnipeg Montreal Vancouver Kitchener/ Waterloo Toronto Halifax
4 Responding to the SME Challenge Responding to the SME Challenge The SME e-business Information Toolkit 1. ROI: Determining the Value of e-business for SMEs: Identifying the Return on Investment, Securing Management Commitment & Devising a Solid e-business Strategy 2. Suppliers: Credible Source of e-business Suppliers for SMEs 3. Security: Internet Security: An Exercise in Risk Management SME e-business Use: Key to Stimulating Demand for Broadband Greater Availability, Affordability Increased Capability of Networks Creating Economy-wide Platform for e-business Increased Sustainability Virtuous Circle Access for SMEs Sector-wide deployment Technical Literacy Productivity & Competitiveness Generating Revenue Streams for Infrastructure Investment
5 Joint WPIE/TISP Workshop Broadband: Infrastructure, Applications & Use Paris, France 5 December 2001 The Demand Side of Broadband Deployment: The Importance of SMEs Matthew Ivis, Canadian Chamber of Commerce & Canadian Council for International Business Canadian Chamber of Commerce La Chambre de Commerce du Canada
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