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Outsourcing hopefuls still face massive digital divide

27 Oct 2009 12:00 AM | Anonymous

Lack of broadband Internet access is depriving many developing countries of the chance to build up economy-boosting outsourcing sectors, according to the 2009 Information Economy report launched last week by UNCTAD - the United Nations Conference on Trade and Development.

The report presents a fascinating - if somewhat depressing - view of the worldwide digital divide. For example, companies and consumers in developed countries are 200 times more likely to have access to broadband in developed countries than in the poorest Least Developed Countries (LDCs). And the cost of broadband access varies widely - but if you're in Burkina Faso, the Central African Republic or Swaziland, expect to pay upwards of $1,300 per month.

"The narrowing of the digital divide remains a key development challenge," UNCTAD Deputy Secretary-General Petko Draganov said at the launch of the report. "What is known as the broadband gap for example is becoming a serious handicap for companies in many poor countries."

On a positive note, however, it's clear that the situation is due to change soon in many African countries. I recently came across research from market analyst company Pyramid Research that discusses how twelve new undersea cables planned for launch between the third quarter of 2009 and mid-2011 will do much to address Africa's great unmet demand for broadband services.

By tying many African states into the the submarine backbone that carries 95% of today's voice and internet traffic, these cables will remove the continent's heavy reliance on expensive satellite links and boost total broadband adoption in Africa by a compound annual growth rate of 28% from 2009 to 2013. By 2011, Pyramid Research analyst Dearbhla McHenry estimates that the number of African states without broadband access will fall from 19 to one.

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