“Connecting the next billion,” or the next “five billion” people to the Internet might require some unusually stringent attention to the costs of network infrastructure and devices. At the International Telecommunications Union “Telecom World 2013,” a number of speakers emphasized affordability as a key challenge.
Jon Frederik Baksaas, Telenor CEO, pointed out that regulators and governments must distribute spectrum fairly and handsets must be affordable.
John Davies, Intel World Ahead Program EVP, said prepaid services were necessary to serve lower-income customers.
Dr. Nasser Marafih, Ooredoo CEO, talked about how infrastructure sharing with Telenor in Myanmar would help keep contain access network costs. But backhaul is an issue as well.
“Wholesale bandwidth in Asia is up to five times the medium price than Europe,” said Abu Saeed Khan, senior policy fellow at LIRNEasia, Bangladesh.
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The role of competition in driving adoption and lower consumer costs was emphasized by Dr. James Hong, Korea Telecom’s chief technology officer.
Public-private partnerships and government support for very rural and isolated locations also were mentioned as ways to reduce costs and increase coverage.
“As a regulator you don’t want to put yourself in a position of distorting the market place unnecessarily,” said Paul Garnett, Microsoft Technology Policy Group director. “But where there’s a clear instance of market failure and no one is making the investment and the government has take some sort of role, it is appropriate.”
Indeed, the cost issues might be even greater than that. Even in cases where service providers trying to serve potential customers who cannot pay much for Internet access, the cost of spectrum, the cost of licenses and other fees can be crucial.
In some countries, even use of unlicensed spectrum requires obtaining a license that could involve payments of six percent to eight percent of gross revenue. By definition, all those costs must be recovered from customers.
In third generation mobile spectrum auctions in 2012 in Thailand, service providers paid 47 cents per MHz per person to secure spectrum. In Indian 3G auctions in 2010, mobile service providers paid 56 cents per MHz per person for spectrum rights.
All those costs must likewise be recovered from customers as well.
All of that is one reason some believe the task of providing broadband access to millions of people in Asia and Africa might well require use of unlicensed spectrum, no requirement for obtaining traditional telecom licenses and unusually stringent attention to network infrastructure costs as well.
Connecting the last billion or two billion users might require steps no tier one service operator presently can contemplate.
Edited by
Alisen Downey 
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