Measuring the Information Society Report 2014

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1 Measuring the Information Society Report 2014

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3 Measuring the Information Society Report 2014

4 2014 ITU International Telecommunication Union Place des Nations CH-1211 Geneva Switzerland Original language of publication: English. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of the International Telecommunication Union. ISBN ii

5 Foreword I am pleased to present to you the 2014 edition of the Measuring the Information Society Report. Now in its sixth year, this annual report identifies key information and communication technology (ICT) developments and tracks the cost and affordability of ICT services, in accordance with internationally agreed methodologies. Its core feature is the ICT Development Index (IDI), which ranks countries performance with regard to ICT infrastructure, use and skills. The report aims to provide an objective international performance evaluation based on quantitative indicators and benchmarks, as an essential input to the ICT policy debate in ITU Member States. Over the past year, the world witnessed continued growth in the uptake of ICT and, by end 2014, almost 3 billion people will be using the Internet, up from 2.7 billion at end While the growth in mobile-cellular subscriptions is slowing as the market reaches saturation levels, mobile broadband remains the fastest growing market segment, with continuous double-digit growth rates in 2014 and an estimated global penetration rate of 32 per cent four times the penetration rate recorded just five years earlier. International bandwidth has also grown steeply, at 45 per cent annually between 2001 and 2013, and the developing countries share of total international bandwidth increased from around 9 per cent in 2004 to almost 30 per cent in Overall, almost all of the 166 countries included in the IDI improved their values in the last year. Despite this encouraging progress, there are important digital divides that need to be addressed: 4.3 billion people are still not online, and 90 per cent of them live in the developing world. Fixedbroadband penetration stands at 6 per cent in developing countries, compared with 27.5 per cent in developed countries, and growth rates are slowing. Mobile broadband is growing fast, but the difference between developed and developing regions remains large, with 84 per cent penetration in the former as against 21 per cent in the latter. Increasing ICT uptake in the world s least connected countries (LCCs), which are home to some 2.5 billion people, should therefore be the policy focus for the years to come. In these countries, the share of population living in rural areas is often high, reinforcing the urban-rural digital divide. As this report finds, ICT performance is better in countries with higher shares of the population living in urban areas, where access to ICT infrastructure, usage and skills is more favourable. Yet it is precisely in poor and rural areas where ICTs can make a particularly significant impact. New analysis featured in this report shows that many of the indicators of the Millennium Development Goals (MDGs) show significant correlation with the IDI, notably those related to poverty reduction and health improvement. Furthermore, the report finds that progress in ICT development is linked to progress in achieving some of the MDGs, yet another testimony to the role of ICT as a development enabler. One reason for the limited uptake of ICT in the developing world is the price of the service, which is often unaffordable for poor segments of the population. While the prices of fixed and mobile services continue to decrease globally, in most developing countries the cost of a fixed-broadband plan represents more than 5 per cent of GNI per capita, and mobile broadband is six times more affordable in developed countries than in developing countries. Income inequalities within countries are one of the reasons why broadband in particular fixed broadband remains unaffordable to large segments of the population. The report finds that in 40 per cent of countries a basic fixed-broadband iii

6 subscription still represents more than 5 per cent of household income for over half of the population. For these income groups, mobile broadband may be the affordable alternative. An enabling telecommunication regulatory environment can significantly influence the affordability of services. The report finds that the price of ICT services falls with better market regulation and increased competition. For example, in developing countries, fixed-broadband prices could be reduced by 10 per cent and mobile-cellular prices by 5 per cent if competition and/or the regulatory framework improved. International regulatory best practices, such as the ones adopted by the ITU Global Symposium for Regulators (GSR), may serve as a guideline for effective regulatory frameworks which can lay the foundations for affordable fixed-broadband services. In this fast-changing digital era, one of the key challenges in measuring the information society is the lack of up-to-date data, in particular in developing countries. ITU is joining the international statistical community in looking into ways of using new and emerging data sources such as those associated with big data to better provide timely and relevant evidence for policy-making. Calls for a data revolution are prominent in the international debates around the post-2015 development agenda, and ICTs have an important role to play in view of their capacity to produce, store and analyse huge amounts of data, as well as being a major source of big data in their own right. Big data from mobile operators, for example, are real-time and low-cost and have one of the greatest development potentials in view of the widespread use and availability of mobile networks and services. This report provides the reader with a comprehensive and critical overview of the role of big data from the telecommunication sector, for use in social and economic development policy and for monitoring the future information society. I trust that the data and analysis contained in this report will be of great value to the ITU membership, including policy-makers, the ICT industry and others working towards building an inclusive global information society. Brahima Sanou Director Telecommunication Development Bureau (BDT) International Telecommunication Union

7 Acknowledgements The 2014 edition of the Measuring the Information Society Report was prepared by the ICT Data and Statistics Division within the Telecommunication Development Bureau of ITU. The team included Susan Teltscher (Head of Division), Esperanza Magpantay, Vanessa Gray, Ivan Vallejo, Lisa Kreuzenbeck and Ola Amin. The following consultants to ITU provided substantive inputs: Pantelis Koutroumpis (Chapter 4) and Sriganesh Lokanathan (Chapter 5). André Wills, Fernando Callorda and Shazna Zuhyle contributed to the compilation of datasets on prices, and Michael Minges to the compilation of data on international bandwidth, revenue and investment. Helpful inputs and suggestions were received from Joan Calzada Aymerich from the University of Barcelona (Chapter 4), Jake Kendall from the Gates Foundation, Anoush Tatevossian and Alex Rutherford from UN Global Pulse, and Tommy van der Vorst and Reg Brennenraedts from Dialogic (Chapter 5). The following ITU colleagues also made insightful comments: Martin Adolph, Nikolaos Volanis, Phillippa Biggs, Youlia Lozanova, Nancy Sundberg and Chelsea Silva Mori. The work was carried out under the overall direction of Cosmas Zavazava, Chief, Project Support and Knowledge Management Department, Telecommunication Development Bureau. The report includes data from Eurostat, OECD, IMF, Informa, the UNESCO Institute for Statistics, the United Nations Population Division and the World Bank, which is greatly acknowledged. ITU also appreciates the cooperation of countries that have provided data included in this report. The report was edited by Anthony Pitt and Bruce Granger, ITU English Translation Section. The desktop publishing was carried out by Nathalie Delmas, and the cover was designed by Jesus Vicente. Administrative support was provided by Herawasih Yasandikusuma. v

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9 Table of contents Foreword...iii Acknowledgements...iv Table of contents...vii Chapter 1. Recent information society developments Introduction The voice market The broadband market and Internet access Revenue and investment in the telecommunication sector Use of ICTs Emerging ICT measurement issues...24 Chapter 2. The ICT Development Index (IDI) Introduction to the IDI Global IDI analysis Monitoring the digital divide: Developed, developing and least connected countries Geography, population size, economic development and the IDI IDI and progress towards the Millennium Development Goals (MDGs)...62 Chapter 3. Regional IDI analysis Africa Arab States Asia and the Pacific Commonwealth of Independent States Europe The Americas vii

10 Chapter 4. ICT prices and the role of competition Introduction Fixed-telephone and mobile-cellular prices Broadband prices Income inequality and broadband prices The impact of competition and regulation on telecommunication prices Chapter 5. The role of big data for ICT monitoring and for development Introduction Big data sources, trends and analytics Telecommunication data and their potential for big data analytics Big data from mobile telecommunications for development and for better monitoring Challenges and the way forward Chapter 5 Annex List of references Annex 1. CT Development Index (IDI) methodology Annex 2. ICT price data methodology Annex 3. Statistical tables of indicators used to compute the IDI Annex 4. Statistical tables of prices used to compute the ICT Price Basket viii

11 List of charts 1.1 Fixed-telephone subscriptions by level of development, (left) and by region, 2014 (right) Mobile-cellular subscriptions by level of development, (left) and by region, 2014 (right) Fixed (wired)-broadband subscriptions by level of development, (left) and by region, 2014 (right) Active mobile-broadband subscriptions by level of development, (left) and by region, 2014 (right) Share of mobile subscriptions by technology, , developed countries (left) and developing countries (right) Rural population covered by at least a 3G mobile network, Fibre and microwave routes, share of route kilometres (left) and route metres per capita (right), selected regions, Total International Internet bandwidth (Gbit/s), by level of development (left) and regional share (right), International Internet bandwidth (bit/s) per Internet user, by region, 2004 and Percentage of households with Internet access, by level of development, (left) and by region, 2014 (right) Proportion of post offices providing public Internet access and post offices with broadband Internet access, 2012, by level of development Proportion of post offices providing public Internet access, by region, vs Telecommunication revenues, world and by level of development, , total in USD (left) and annual growth (right) Annual investment by telecommunication operators, world and by level of development, , total in USD (left) and annual growth (right) Individuals using the Internet, by level of development, (left) and by region, 2014 (right) Growth in daily Google searches, Growth in Facebook monthly active users, (millions of users) Wikipedia articles total and English language, (thousands of articles) Fixed-broadband access in enterprises using the Internet, selected countries, E-government Development Index (EGDI), ix

12 1.21 E-government services provided by countries (transactional services, left, and e-participation services, right) Proportion of schools with Internet access (total and fixed-broadband), 2012 or latest year available Proportion of ICT-qualified teachers versus proportion of teachers trained to teach subjects using ICTs, by region, Fixed (wired)-broadband and wirelessbroadband subscriptions per 100 inhabitants, top five IDI countries, Wireless-broadband subscriptions per 100 inhabitants, top five IDI countries, Wireless-broadband penetration, Bhutan, Proportion of households with a computer and proportion of households with Internet access, , Qatar IDI by level of development IDI access sub-index by level of development IDI use sub-index by level of development IDI and GNI per capita IDI and percentage of population living in urban areas IDI and population density IDI and population size IDI and land area IDI and MDG 1: Halve the proportion of people whose income is less than one dollar a day and the proportion of people who suffer from hunger IDI and MDG 4: Reduce child mortality IDI and MDG 5, Target 5.A: Reduce the maternal mortality ratio IDI and MDG 6, Target 6.C: Have halted by 2015 and begun to reverse the spread of HIV, malaria and other major diseases IDI and MDG 7, Target 7.C: Halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation IDI ranges and averages, by region and compared to world average, IDI values compared with the global, regional and developing/developed-country averages, Africa, Mobile-cellular subscriptions per 100 inhabitants, 2012 and 2013, Africa IDI values compared with the global, regional and developing/developed-country averages, Arab States, x

13 3.5 Wireless-broadband subscriptions per 100 inhabitants, Arab States, 2012 and IDI values compared with the global, regional and developing/developed-country averages, Asia and the Pacific, Wireless-broadband penetration, Asia and the Pacific, 2012 and IDI values compared with the global, regional and developing/developed-country averages, CIS, Fixed (wired)-broadband subscriptions per 100 inhabitants, CIS, 2012 and IDI values compared with the global, regional and developing/developed-country averages, Europe, Percentage of Individuals using the Internet, Europe compared to global and developed country average, IDI values compared with the global, regional and developing/developed-country averages, the Americas, Proportion of households with Internet access, the Americas, 2012 and Fixed-telephone basket (left) and mobile-cellular basket (right), in PPP$, world and by level of development, Fixed-telephone basket (left) and mobile-cellular basket (right), as a percentage of GNI p.c., world and by level of development, Fixed-broadband prices in PPP$ (left) and most common entry-level fixed-broadband speed (right), world and by level of development, Fixed-broadband prices, as a percentage of GNI p.c., world and by level of development, Fixed-broadband prices as a percentage of GNI p.c. in Europe, Fixed-broadband prices as a percentage of GNI p.c. in the CIS, Fixed-broadband prices as a percentage of GNI p.c. in the Arab States, Fixed-broadband prices as a percentage of GNI p.c. in the Americas, Fixed-broadband prices as a percentage of GNI p.c. in Asia and the Pacific, Fixed-broadband prices as a percentage of GNI p.c. in Africa, Availability of mobile-broadband services by type of service, by level of development, 2013 and Mobile-broadband prices, in PPP$, world and by level of development, Mobile-broadband prices, in USD, world and by level of development, Mobile-broadband prices as a percentage of GNI p.c., world and by level of development, xi

14 4.15 Mobile-broadband prices as a percentage of GNI p.c., by region, Comparison of postpaid fixed-broadband and postpaid computer-based mobile-broadband prices, in USD, by region, Distribution of household disposable income (left) and household consumption (right), selected countries, 2011 or latest available year Fixed-broadband prices as a percentage of household disposable income, by income deciles, Panama and Uruguay, Fixed-broadband prices as a percentage of household consumption, by consumption deciles, Angola and Uganda, Prepaid handset-based mobile-broadband prices (500 MB/month) as a percentage of equivalized household income (left), and equivalized household consumption expenditure (right), by deciles, Competition in fixed-broadband markets and fixed-broadband prices as a percentage of GNI p.c., Competition in mobile markets and mobilecellular prices as a percentage of GNI p.c., Variation in fixed-broadband prices (%) explained by each variable, Variation in mobile-cellular prices (%) explained by each variable, List of figures 2.1 Three stages in the evolution towards an information society ICT Development Index: indicators, reference values and weights IDI spider charts, selected dynamic countries, 2012 and Significant partial correlations between IDI and MDG indicators Significant correlations between percentage increases in IDI and percentage changes in MDG indicators Mobile-broadband services by type of device/plan Relationship between regulation, competition and prices Composition of the variable measuring the regulatory environment The five Vs of big data An overview of telecom network data Customer profiling using telecom big data xii

15 List of boxes 1.1 Final review of the WSIS targets: Achievements, challenges and the way forward A decade of successful international cooperation on ICT measurement Strategic targets for the future information society What is a data revolution? ITU discussion forums on ICT statistics The world s least connected countries (LCCs) WSIS and ICT progress as measured by IDI 2002 and Thailand: Smart phones and volunteers fight drug-resistant malaria Challenges for fixed-broadband adoption in Mauritania Panel regression models for fixed-broadband and mobile-cellular prices How big data saves energy Vestas Wind Systems improves turbine performance How Twitter helps understand key post-2015 development concerns How mobile operators currently use data to track service uptake, business performance and revenues Using mobile data for development How mobile-network data can track population displacements an example from the 2010 Haiti earthquake Leveraging mobile-network data for transportation and urban planning in Sri Lanka Poverty mapping in Côte d Ivoire using mobile-network data Using mobile-phone data to track the creditworthiness of the unbanked Using mobile big data and mobile networks for implementing surveys List of tables 1.1 Rural population covered by a mobile-cellular signal, Total Internet domain registrations by world region, 2003, 2008 and IDI values and changes, 2012 and ICT Development Index (IDI), 2012 and xiii

16 2.3 IDI access sub-index, 2012 and IDI use sub-index, 2012 and IDI skills sub-index, 2012 and Most dynamic countries - changes between IDI 2013 and IDI by level of development, IDI by groups, 2012 and Partial correlation analysis of IDI, population and geographic characteristics Examples of contribution of ICTs towards the Millennium Development Goals Results of partial correlation analysis between IDI and MDG indicators Simple correlation analysis between relative change in IDI values and MDG indicators , developing countries IDI by region, 2013 and The top five economies in each region and their ranking in the global IDI, IDI Africa IDI Arab States IDI Asia and the Pacific IDI CIS IDI Europe IDI The Americas Fixed-telephone sub-basket, Mobile-cellular sub-basket, Fixed-broadband prices as a percentage of GNI p.c., by region, Fixed-broadband sub-basket, Mobile-broadband prices, postpaid handset-based 500 MB, Mobile-broadband prices, prepaid handset-based 500 MB, Mobile-broadband prices, postpaid computer-based 1 GB, Mobile-broadband prices, prepaid computer-based 1 GB, Fixed-broadband prices as a percentage of household disposable income, selected countries, Fixed-broadband prices as a percentage of household consumption expenditure, selected countries, xiv

17 4.11 Prepaid handset-based mobile-broadband (500 MB/month) prices as a percentage of household disposable income, selected countries, Prepaid handset-based mobile-broadband (500 MB/month) prices as a percentage of household consumption expenditure, selected countries, Panel regression results, fixed-broadband prices and regulation Panel regression results, mobile-cellular prices and regulation ICT Price Basket and sub-baskets, Sources of big data xv

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19 Measuring the Information Society Report 2014 Chapter 1. Recent information society developments 1.1 Introduction The past year has been characterized by uninterrupted growth in the spread of information and communication technology (ICT) infrastructure and in ICT uptake by citizens and public and private organizations. While the global mobile-cellular market is approaching saturation levels, mobile-broadband uptake continues to grow at double-digit rates in all regions, and mobile broadband remains the strongest growing market segment. This trend is accompanied by a slowdown in fixed-broadband uptake in the developing world, where mobilebroadband services provide a response to the demand for high-speed Internet access in view of the lack of affordable fixed-broadband services, whereas in the developed world both fixed- and mobile-broadband uptake is growing continuously. The data also show a continuous increase in Internet usage, with growth in the number of Internet users in all countries and increasing availability of online content, much of which is user-created through social media applications and platforms (e.g. Twitter, YouTube, WhatsApp). With more and more applications now available through mobile platforms (mobile apps), and the strong growth in mobile Internet uptake, an increasing number of people are joining, and participating actively in, the information society. While the information society is growing worldwide, digital divides remain and are even widening in some segments. In particular, there is a significant and persistent urban-rural digital divide, whereby urban citizens enjoy ubiquitous mobile network coverage, affordable high-speed Internet services and the higher levels of skills required to make effective use of online content and services, while the opposite is often the case in rural and remote areas of many developing countries. This chapter will present and discuss key indicators for monitoring the global information society. It will first look at the uptake of ICT infrastructure and services, covering the fixed and mobile (voice and data) market segments, and considering both subscriptions and household access data. This will be followed by a presentation of the latest trends in terms of investment and revenue in the telecom sector. Then, a number of key indicators will be presented concerning ICT uptake by individuals, businesses and public organizations (from the government and education sectors), as 1

20 Chapter 1. Recent information society developments well as growth in online content and particularly social media. The final part of the chapter will discuss emerging issues related to informationsociety measurements, in particular in the context of the post-2015 development debate and the WSIS+10 review, the demand for a data revolution, and the role of big data for ICT monitoring. 1.2 The voice market In line with developments in recent years, fixed telephony is on the decline in all regions of the world (Chart 1.1). Worldwide, there are only around a dozen countries where fixed-telephone uptake has actually increased over the past year. 1 Fixed-telephone penetration decreased by about 2 per cent globally in the past year, and will drop to its lowest level in 14 years lower than at the turn of the century with an estimated 1.1 billion subscriptions by end The decrease is stronger in developed countries (2.4 per cent) than developing countries (1 per cent), and strongest in the Americas region (2.6 per cent), followed by Asia and the Pacific (2 per cent). The decline in fixed-telephone subscriptions over the past decade was accompanied by strong growth in the mobile-cellular market until 2010, at which point mobile-cellular growth rates dropped to single digits, and they have continued to slow down since then. In 2014, global growth in mobile penetration will be at a ten-year low of 2.6 per cent, as the market reaches saturation levels, in particular in developed countries where penetration will reach 121 per cent (Chart 1.2). By end 2014, there will be almost as many mobile-cellular subscriptions (6.9 billion) as people on Earth, more than three quarters of them (5.4 billion) in the developing world and more than half (3.6 billion) in the Asia-Pacific region. While this does not mean that everyone has a mobile phone since many people have more than one subscription or SIM card the total numbers and growth rates strongly point to market saturation. Whether this will change in the near future, and whether growth will pick up again, will depend among other things on the types of service plans that will be offered in national markets and their uptake by individuals. Looking at the six world regions, Africa and Asia and the Pacific are the regions with the strongest mobile-cellular growth, and the lowest penetration rates, which will reach 69 per cent and 89 per cent, respectively, by end Chart 1.1: Fixed-telephone subscriptions by level of development, (left) and by region, 2014* (right) Per 100 inhabitants Note: Source: 2005 Developed World Developing LDCs *Estimate. ITU World Telecommunication/ICT Indicators database. 2014* Per 100 inhabitants Europe The Americas CIS World Asia & Pacific Arab States 1.3 Africa 2

21 Measuring the Information Society Report 2014 Chart 1.2: Mobile-cellular subscriptions by level of development, (left) and by region, 2014* (right) Per 100 inhabitants Note: Source: 140 Developed World *Estimate. ITU World Telecommunication/ICT Indicators database. Developing LDCs * Per 100 inhabitants CIS Penetration rates in the CIS countries, Arab States, Americas and Europe have attained levels above 100 per cent since 2012 and are expected to grow at less than 2 per cent in The above numbers suggest that, globally speaking, the voice market is reaching saturation: the fixed-telephone market is shrinking and the mobile-cellular market is tapering off. In addition, mobile-cellular population coverage has reached 93 per cent globally: in other words, almost every person on the globe lives within reach of a mobile-cellular signal and, at least theoretically, has access to mobile communication services. Closer examination and disaggregation of the data reveal, however, that digital divides still exist and that some people are still excluded from access to communication networks. First, there are populations living in rural areas that are not covered by a mobile-cellular signal (Table 1.1). Even though rural population coverage is very high, at 87 per cent globally, at end 2012 around 450 million people worldwide still lived out of reach of a mobile signal. Second, high mobile-cellular penetration does not imply that everyone owns or is using a mobile phone. For countries where data are available, the number of mobile subscriptions far exceeds the number of mobile phone users (Partnership, 2014). No regular pattern can be established, though, and the difference between mobile-phone user penetration and mobile-cellular subscription penetration ranges between 8 per cent (France) and 111 per cent (Panama) across countries. According to GSMA estimates, unique mobile subscribers account for about half of mobilecellular subscriptions, which would translate into a penetration rate of around 48 per cent globally, 63 per cent in developed countries, 45 per cent in developing countries and 30 per cent in least developed countries (LDCs). 2 Third, household access to a telephone is still not the norm in many developing countries, in particular in LDCs (Partnership, 2014). For example, according to the latest population and housing census carried out in India in 2011, 63 per cent of households had a telephone (up from 9 per cent ten years earlier). In addition, there were significant differences between urban and rural areas, with 82 per cent of Indian urban households having access to a telephone compared with 54 per cent of rural households. 3 Household telephone penetration in Malawi stood at 36 per cent in per cent in urban households 3

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