ITU report outlines road to recovery after crash, crunch and crisis

The financial crisis has failed to make a major dent in demand for ICT services, with the mobile and satellite sectors proving remarkably resilient, stated the ITU. The ITU added that consumer demand for high speed fixed and mobile connections is continuing to fuel growth in broadband subscriptions in major markets worldwide, including Brazil, China and the US.

Global fibre to the home (FTTH) installations are still forecast to grow at a steady rate of 30% over the next five years, while long lead times, robust demand for entertainment services and specialised financing mechanisms have helped bolster the satellite industry, which is predicting 50% growth over the coming decade, said the ITU.

These are some of the findings of the second edition of the ITU report. The report argues that the ICT sector has a major role to play in generating economic growth and stimulating the global financial recovery across all commercial and industrial sectors.

“Economists are still debating appropriate measures to combat the global recession,” said ITU Secretary-General Dr Hamadoun Touré, “but we firmly believe that investments in ICT and broadband networks have a major role to play in any stimulus plan. They often promise stronger marginal returns on supply and greater productivity gains than other forms of infrastructure.

“Governments, regulators and industry players convening at ITU Telecom World 2009 will be considering the implications of this report as they formulate strategies to set nations not only on the road to economic recovery, but on a high-tech path to inclusive social development – at incredible benefit to future generations,” he continued.

Co-authored by ITU and experts from Ericsson, Eutelsat, Intel, UK-based analyst house The Mobile World, the Organisation for Economic Cooperation & Development (OECD), broadband consultancy Point Topic, and the World Bank, the report is the second in ITU’s Confronting the Crisis series.

Spanning an industry hallmarked by vigorous competition and constant innovation, the report analyses which ICT market segments have best weathered the storm. Wireless communication technologies, fixed broadband internet, next generation networks and satellite technologies all have enormous potential to spur economic growth in both developing and developed regions and across all sections of society, the report concludes.

Noting a reversal in the trend towards greater private sector participation over the last three decades, the report also revives the debate about the role of government in critical infrastructure investment. With the private sector alone now unlikely to be in a position to drive widespread infrastructure development, it seems clear that government must take simple and immediate steps to assist.

At the same time, however, governments need to be mindful of where they direct spending, warns the report. With operators themselves hedging their bets by picking a raft of different technologies for ICT expansion, governments, too, should exercise caution when picking technologies, picking winners or even picking the communities where investments will be channelled.

The financial crisis has brought about momentous change, forcing industrialised markets into recession and resulting in declining economic growth rates in emerging markets. Within the ICT sphere, operators face greater challenges in accessing capital and financing their network investments, slowing plans to roll out next generation networks. Unchecked, these challenges could hold back communities that need solid broadband infrastructure to achieve their social and economic development goals.

“Next generation technologies bring enormous advantages to nations, and the right policy choices must be made now, so we can reap the benefits tomorrow,” concluded Dr Touré.

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