Understanding the unconnected

Executive Briefing Service, (Re)Connecting with Consumers

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Despite the growing maturity of the communications industry, why do more than half the world’s people still lack a dedicated Internet connection? And what can be done about it, by whom?

Introduction

Half the world’s population doesn’t have ready access to the internet. Why not? Surprisingly, it’s not simply a case of not being able to afford it.

In the report, The Coordination Age: A Third Age of Telecoms (November 2018), STL set out the need to make better use of the world’s resources.  These include the necessity and importance of making productive and rewarding use of people, time, health, money, and employment.

Communication is fundamental to co-ordination and cannot be achieved over any distance without effective connectivity, which in the modern world means access to the Internet. Improving connectivity can provide more people with better access to:

  • Useful information and services such as banking, insurance, health, education, and entertainment
  • Person-to-person communication, strengthening ties with families, friends and colleagues.
  • Easier and better access to resources, such as goods and markets, thereby facilitating business and trading, and in turn leading to greater prosperity.

It can also help expand the role of women in society, for example, by providing them with the ability to work or access or provide goods and services from home.

To achieve these aims, and make most efficient use all types of resources, it is important that all of the world’s population should be able to get online, preferably each with their own dedicated connection.

This is the first in a series of reports that looks at the question of how to connect the large part of the world’s population that is not online. This report describes the current situation and the reasons why many remain unconnected, even where there is mobile 3G or 4G coverage.

Economic benefits of broadband

People who are unable to use the Internet are excluded from the range of useful services and activities it provides access to, which include banking, health services, education, information, entertainment, jobs, markets and government services, as well as the benefits of maintaining contact with distant families and friends.  Gaining access to these services by other means is usually more difficult and time consuming, often restricts choice, and is, in some cases, impossible. Exclusion from such services can have a negative effect on people’s ability to earn a living, increase their income or improve their way of life. Although the nature of exclusion and its effects differ between developed and developing economies, the consequences can be remarkably similar.

Moreover, widespread Internet access can support empowerment of women in many societies, not just the most undeveloped and conservative, by allowing them to take a more active part in the economy.

A range of studies has shown that greater access to mobile broadband has a positive impact on GDP as well as on people lives.  Among the most recent, published in 2017, is a study from London’s Imperial College Business School. The results show that a 10 percentage point increase in mobile broadband penetration leads to an increase of between 0.6% and 2.8% in GDP.

A World Bank report from 2009 estimated the relative importance of fixed, mobile, Internet access and broadband in stimulating economies (see Figure 4).

Figure 4: Relative impact on GDP of different communications technologies

Source: World Bank

The GSMA claims that, globally, the mobile telecoms industry accounts for 1.4% of GDP and adds a further 2.5% from productivity gains in the broader economy. In sub-Saharan Africa, mobile broadband contributes 7.1% of GDP, according to the GSMA.

The growth in access to the Internet

Use of the Internet has grown rapidly since the introduction of the World Wide Web and over half the world’s population of 7.6 billion are now users. At the end of 2017, 53% of the world’s population (4 billion people) were Internet users, with 43% (3.3 billion) using mobile networks to gain access to the Internet, according to the GSMA. There are also about one billion fixed broadband connections worldwide, but these mostly duplicate mobile data coverage in advanced developed economies, according to the ITU.  Note, that fixed line connections generally support multiple users in a household. Still, approximately 700 million people get online by using shared connections, including the facilities offered by public libraries or Internet cafes, according to the ITU. That means there are now approximately four billion Internet users worldwide.

The overall level of Internet use and the proportion of people connected by mobile in the major regions of the world are shown in Figure 5, which highlights how most Internet users gain access to the Internet through mobile networks.  As discussed, the remainder either have fixed broadband access to their household, make use of Internet cafes, libraries and other public points of access, or share with members of their family or friends.  Figure 5 highlights how the majority of people in the populous regions of sub-Saharan Africa and South Asia remain offline.

Figure 5: Total and mobile Internet users by world region

Source: ITU, UNESCO, GSMA, Hootsuite, STL Partners

In total, 47% of the world’s population (approximately 3.6 billion people) do not use the Internet.  Lack of coverage is one reason for this: Approximately 10% of the world’s people live beyond the reach of a mobile network, according to the GSMA. About 87% of the world’s people are covered by 3G networks and, 72% covered by 4G, while the remaining 3% have access to 2G data connections using GPRS or EDGE, with speeds inadequate for all but the most basic applications. The GSMA defines mobile broadband as over 256kbps.  GPRS cannot reach these speeds and EDGE rarely does.  In practice, there are about one billion people not served by a data network that provides adequate throughput speeds.

According to the GSMA, at the end of 2017, there were five billion unique mobile subscribers worldwide, a penetration of 66%. Some 29% of all mobile connections (excluding IoT) were 4G, 31% were 3G and 40% 2G.

Figure 6 shows the proportion of the populations in the major regions that are connected, covered and not connected and not covered or connected. Even in advanced economies in North America and Europe, more than one quarter of the population remains unconnected.

The proportion of the global population covered by mobile broadband networks, but not online, remained largely unchanged for the three years between 2014 and 2017 at about 44% of the world’s population. However, as Figure 6 shows, this proportion varies considerably across regions, ranging from 26% in North America to 57% in South Asia (Bangladesh, India, and Pakistan).  The percentage in sub-Saharan Africa is lower at 38%, but this is partly due to the lower level of mobile broadband coverage, with 40% of the population having no coverage. By comparison, only 16% of the population in South Asia has no mobile broadband coverage. In other words, lack of coverage is not the biggest obstacle in most of the world.

Figure 6: Mobile connected and unconnected population by region

Source: GSMA, STL Partners

Contents:

  • Executive Summary
  • Introduction
  • Economic benefits of broadband
  • The growth in Internet usage
  • Counting the addressable unconnected
  • The reasons why people aren’t online
  • Social and economic drivers of Internet access
  • Regional Internet usage patterns
  • Structural, social and economic differences
  • Reasons why people are not connected
  • Why do people not use mobile broadband?
  • Infrastructure; mobile broadband coverage and electricity
  • Cost of smartphones and mobile data
  • Local content and services
  • Social and cultural factors and education
  • Conclusions and areas for action
  • The connected and the unconnected
  • Infrastructure
  • Connecting the covered
  • Are governments prepared to act?
  • Annex: Regional and country data
  • Asia Pacific
  • Eastern Europe
  • Latin America
  • Middle East and North Africa (MENA)
  • North America
  • Sub-Saharan Africa
  • Western Europe

Figures:

  • Figure 1: Less than half the world’s people have a dedicated Internet connection
  • Figure 2: About 2.8 billion people aged over 11 not using the Internet
  • Figure 3: The growth in the population covered by 3G/4G
  • Figure 4: Relative impact on GDP of different communications technologies
  • Figure 5: Total and mobile Internet users by world region
  • Figure 6: Mobile connected and unconnected population by region
  • Figure 7: Internet penetration of total population by world sub-region
  • Figure 8: HDI and its constituents
  • Figure 9: Global variations in human development
  • Figure 10: Average household sizes by country
  • Figure 11: Key factors influencing broadband take up
  • Figure 12: Global GSMA Mobile Connectivity Index
  • Figure 13: Mobile network coverage by major region
  • Figure 14: Fixed broadband penetration
  • Figure 15: Electricity – percentage access by region
  • Figure 16: Availability of electricity supply in Sub-Saharan Africa (% pop)
  • Figure 17: African countries with largest populations; those with no electricity
  • Figure 18: Smartphone and mobile penetration
  • Figure 19: Examples of cheapest smartphones
  • Figure 20: Affordability index for cheapest Internet-enabled handsets
  • Figure 21: Relative cost of mobile data plans (on a 100-point index) vs. penetration
  • Figure 22: Availability of local services on a 100-point index vs. Internet penetration
  • Figure 23: Literacy and Internet and social media use by sub-region
  • Figure 24: Female access to mobile phone and Internet
  • Figure 25: Proportion of women with access to the Internet in selected MENA states
  • Figure 26: Proportion of women with access to the Internet in Sub-Saharan Africa
  • Figure 27: Asia Pacific overview
  • Figure 28: Asia Pacific country data
  • Figure 29: Eastern Europe overview
  • Figure 30: Eastern Europe country data
  • Figure 31: Latin America overview
  • Figure 32: Latin America country data
  • Figure 33: MENA overview
  • Figure 34: MENA country data
  • Figure 35: North America overview
  • Figure 36: North America country data
  • Figure 37: Sub-Saharan Africa overview
  • Figure 38: Sub-Saharan Africa country data
  • Figure 39: Western Europe overview
  • Figure 40: Western Europe country data