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O
VER THE PAST
decade there have been significant improve-
ments in access to basic information and communication
infrastructure (ICI), although the picture is more mixed
for advanced ICI. Progress to date has been due to new technolo-
gies, declining costs and considerable investment, with a growing
share of that investment coming from the private sector.
Competitive, well-regulated private investment remains the key to
meeting the growing demand for ICI.
Going forward, there are considerable investment needs for ICI
in developing countries, and the first question is how to attract
private financing to meet those needs. Even with greater private
involvement, however, gaps will remain. Some investment gaps can
be filled with pro-investment policy and regulation, and by lever-
aging the government’s role as consumer and infrastructure owner.
Some gaps may also require government-supported access initia-
tives. While the donor community plays a relatively small role in
overall financing, the role for donors and the World Bank Group
(WBG) in particular can still be significant.
A changing digital divide
The WSIS Plan of Action called for more than one half of the world’s
population to have access to information and communication tech-
nology (ICT) by 2015.
2
If that is defined at a basic level as living
in an area covered by a mobile network signal, that goal has already
been surpassed in every developing region, with an estimated 77
per cent of the world’s population covered by the mobile footprint.
3
In fact, at least in terms of access to basic infrastructure, the digital
divide is rapidly closing. People in the developing world are getting
more access to ICT and basic voice access goals are being met at
an incredible rate (Figure 1, based on IUT 2004a).
This positive trend is also clear from surveys asking organiza-
tions to list the major constraints they face in doing business. These
surveys are available from over 80 countries in the developing
world.
4
No doubt as a result of significant worldwide improve-
ments in access and quality of ICT, telecommunications limitations
rank far down in the concerns of most businesses worldwide –
last in a list of 14 constraints including factors such as policy uncer-
tainty, corruption, electricity, transportation, and access to land.
Regarding access to more advanced ICT such as the Internet,
however, the picture is more balanced. While the growth of
Internet users in the developing world has been faster than growth
rates in rich countries since the mid 1990s and, compared to
what might be expected given the size of their economies, the
developing world is doing quite well in terms of usage, still only
about one in 100 sub-Saharan Africans use the Internet, for
example. Interregional Internet bandwidth between Africa and
the US is less than one three-hundredth of the capacity between
the US and Europe. Sub-Saharan Africa has less than one-thirti-
eth of the broadband subscribers and less than one-eighth of the
international bandwidth than would be suggested even by its
small share of world GDP. This suggests significant work still
needs to be done to bridge the digital divide.
Growing share of private investment
Driving the worldwide trend towards infrastructure rollout is the
availability of new technology and falling prices, combined with
considerable investment spent with greater efficiency. Annual
telecommunications investment in the developing world has
doubled over the last ten years (rising from 21 per cent of the world
total in 1992 to 46 per cent by 2002). And although investment has
declined from its peak in 2000, the decline has been less dramatic
in the developing world than the rich world (Figure 2, calculated
from ITU, 2004a).
Looking further at these investments, we find that their source
has changed markedly over the past ten years – with an increas-
ing percentage coming from private operators. Between 1990 and
2000, over 350 private operators began providing mobile services
in more than 100 developing countries. In Africa, the top six
(private) strategic investors in mobile had total revenues in 2003
estimated at USD7 billion, with profits of USD800 million.
5
Moreover, since 1988, 76 developing countries have privatized
their fixed public telecommunication operators, raising over
USD70 billion (Guislain and Qiang, 2004).
Investments in infrastructure projects with private participa-
tion in developing countries totalled USD210 billion between
1992 and 2002.
6
Sixty-six developing countries have attracted
private participation in telecommunications infrastructure worth
in aggregate more than five per cent of their GDP between 1990
and 2002, including 14 in the sub-Saharan region.
Financing information infrastructure
in the developing world
1
Rym Keremane and Charles Kenny, World Bank
Figure 1: Teledensity (fixed and mobile) per region
1990
1996 2002
Africa – Sub-Saharan
1
1.4
5.3
East Asia & the Pacific
5.5
11.6
38.1
Europe & Central Asia
12.8
17.3
38.9
Latin America & Caribbean
6.4
11.5
36.7
Middle East & North Africa
4.7
8.3
22.4
South Asia
0.6
1.5
4.5
Developed Countries
46.5
64.1
120.1