The term “global village” refers to the idea that the world has become interconnected and interdependent due to advancements in communication and technology, allowing people to communicate and interact as if they were part of a single, small community.
This is undoubtedly the future that current trends point to; we are still far from being an egalitarian global community with equal access to telecom infrastructure.
However, while many see this as a stumbling block, it represents a significant opportunity for communications service providers (CSPs) to invest and become pioneers in some telecom fields. Not to mention unlock new markets that offer additional revenue streams and long-term growth opportunities.
The problem of poor telecom infrastructure in developing countries
In this digital age, Poor telecom infrastructure can significantly impact economic development and quality of life for citizens in developing countries. The socio-economic effects are felt not only at the individual level but on a macro-scale with implications for the overall development of the country or region:
- Slowed economic growth: Adequate telecom infrastructure is essential for modern business practices, including e-commerce and remote work, which are key drivers of economic growth. Poor telecom infrastructure can limit the growth of businesses, making it harder for a country to develop economically.
- Limited access to information: Poor telecom infrastructure can make it difficult for people to access information and resources, such as educational and health materials, which can negatively impact the quality of life for citizens.
- Inequalities: Poor telecom infrastructure can also contribute to the digital divide and create inequalities, as those with better access to telecom services have a better chance to succeed and access opportunities compared to those without.
- Disconnection from the global economy: A lack of telecom infrastructure can limit a country’s integration into the global economy, making it harder for businesses to reach new markets and for individuals to participate in the worldwide community.
- Poor healthcare and education: In countries with poor telecom infrastructure, it can be difficult for healthcare providers to access the resources and information they need to provide quality care and for students to receive a high-quality education.
As you can see, improving telecom infrastructure is critical for economic development and improved quality of life for citizens in developing countries across various dimensions.
Unfortunately, the problem of inadequate telecommunications infrastructure is more widespread than many realise.
Almost all of Sub-Saharan Africa suffers from poor infrastructure, particularly Sudan, Chad, DRC, and Mozambique. Despite being the world’s second most populous country, India still struggles to provide adequate internet access in rural areas. In Afghanistan, decades of conflict have stalled or wiped out progress in delivering telecoms to remote communities.
For example, natural disasters like the 2010 earthquake in Haiti wiped out its telecom infrastructure, which is still in recovery mode. While in countries like Papua New Guinea, their remote location and dramatic terrain have always hampered proper infrastructure development.
All-in-all, the main challenges developing nations face in establishing adequate infrastructure are:
- Lack of investment
- Geographical barriers
- Political instability and conflict
- Corruption and mismanagement
Solving these challenges will require sustained investment, political will, and collaboration between governments, the private sector, and international organisations. This is why the private sector has a particularly important role to play, as many of the other factors will naturally spring from greater investment.
Potential revenue for communications service providers
The biggest revenue potential for CSPs in developing nations comes down to the sheer room for growth. Both mobile internet and home broadband penetration levels in developed countries are near capacity. For example, roughly 93% of US households have broadband internet access, while families in European countries range from 80-97%.
Meanwhile, the global average is only 63.5%, with most of the slack coming from developing nations. According to The World Bank, only 35% of individuals in developing countries have internet access. Raising these levels to 75% would generate an estimated US$2 trillion to their collective gross domestic product (GDP), a large pie of which proactive CSPs will undoubtedly share a big slice.
Furthermore, developing countries will account for roughly 97% of the world’s population growth in the coming years. Over 6.6 billion of the world’s population (83%) already live in developing countries vs just over 1.3 billion (17%), and that share is expected to grow to 86% by 2050. In fact, population growth in the developed world has already all but flatlined and is predicted to start declining after 2030.
What’s more, developing countries have much younger populations. This means they will supply an outsized share of the next generation of the world’s technology-friendly workforce.
For CSPs looking to grow their customer base and tap new markets, the developing world is where they should be looking in the coming decades.
How CSPs can invest and pioneer in developing markets
Due to the untapped nature of these markets and the mismatch between their existing technology and infrastructure and what’s considered “mainstream” in the developing worlds, CSPs can find opportunities across the spectrum of products and services that make up the telecoms industry. This spans everything from developing, upgrading, or expanding large-scale infrastructure on government contracts to delivering consumer-facing services.
In particular, the biggest opportunities for CSPs fall under the following verticals:
- Voice services: The most traditional revenue stream for communication service providers involves charging customers for making phone calls.
- Data services: This includes offering internet connectivity, mobile broadband services, and data packages to customers.
- Value-added services: Providers can offer premium services such as SMS services, mobile banking, and other digital services that can generate additional revenue.
- Equipment sales: Providers can sell mobile phones, modems, and other equipment to customers.
That being said, each market will have specific needs and opportunities. CSPs must work closely with the local government, general population, and existing service providers to understand the landscape to deliver the most valuable and cost-effective services possible while maximising their revenue opportunities.
A brighter future for developing countries and CSPs through telecom development
For better or worse, telecommunications infrastructure has an outsized effect on the development and quality of life. A lack of investment, geographical barriers, and political instability has plagued the progress of establishing infrastructure in developing countries. However, if they can see the promise in this untapped and ripe market, CSPs have the opportunity to set themselves up for growth and increased revenue while driving social good.
The author is Darren Wall, freelance technology writer
