UN ESCAP ISOC Study Unleashing the Potential of the Internet in Central Asia and Beyond

Transcription

1 UN ESCAP ISOC Study Unleashing the Potential of the Internet in Central Asia and Beyond Yo o n e e J e o n g 1 S e p t e m b e r

2 Contents Introduction and Regional Context Internet Access and Usage International and National Connectivity 2

3 Introduction

4 Introduction What? Study on digital connectivity and the potential for transitioning towards a digital economy in 10 countries: Azerbaijan, Afghanistan, Armenia, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan and Uzbekistan Why? To identify main pain points throttling the Internet connectivity in the target countries and to propose policy options for creating an enabling Internet ecosystem in the region How? Using secondary research on infrastructure development, Internet access, usage and the policy environment, including an analysis of the barriers and constraints, and including a set of policy recommendations 4

5 Socio-economic development indicators Georgia GDP Per Capita: $7,176 Population: 4.48 mil Median Age: 37.7 Armenia GDP Per Capita: $7,776 Population: 2.98 mil Median Age: 33.7 Turkmenistan GDP Per Capita: $14,004 Population: 5.24 mil Median Age: 26.6 Azerbaijan GDP Per Capita: $17,144 Population: 9.41 mil Median Age: 30.1 Uzbekistan GDP Per Capita: $5,168 Population: mil Median Age: 27.1 Tajikistan GDP Per Capita: $2,512 Population: 8.21 mil Median Age: 23.5 Kazakhstan GDP Per Capita: $23,211 Population: mil Median Age: 29.7 Kyrgyzstan GDP Per Capita: $3,213 Population: 5.72 mil Median Age: 25.7 Afghanistan GDP Per Capita: $1,946 Population: mil Median Age: 18.1 Pakistan GDP Per Capita: $4,602 Population: mil Median Age:

6 A generally young region Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan Turkmenistan Uzbekistan years and over Source: CIA World Fact Book

7 With varying levels of economic development 6.0% 5.8% 10.2% 3.5% 3.3% 8.0% 4.4% 10.5% 7.4% 1.9% Kazakhstan Azerbaijan Turkmenistan Armenia Georgia Uzbekistan Pakistan Kyrgyzstan Tajikistan Afghanistan 5,168 4,602 3,213 2,512 1,946 7,776 7,176 14,004 17,144 23,211 GDP Growth % and GDP per Capita (PPP) in ,000 10,000 15,000 20,000 25,000 Source: World Bank Data

8 and human development High human development Human Development Index (HDI) Average annual HDI growth Value (%) Kazakhstan Azerbaijan Georgia Armenia Medium human development Turkmenistan Uzbekistan Kyrgyzstan Tajikistan Low human development Pakistan Afghanistan Source: United Nations Development Programme, Human Development Index Trends,

9 Internet Access and Usage

10 The varying levels of development are also evident in the region s Internet penetration Afghanistan Turkmenistan Pakistan Tajikistan Kyrgyzstan Uzbekistan Georgia Armenia Kazakhstan Azerbaijan Source: ITU World Telecommunication/ICT Indicators database

11 How does Central Asia compare with the rest of the world? 80% 70% 60% 50% 40% 30% 20% 10% 0% Africa Europe World ASEAN Central Asia Africa Europe World ASEAN Central Asia 11

12 Internet Usage per 100 inhabitants Three distinct clusters based on Internet 70 penetration with large gaps in between Cluster 1 60 AZ Cluster 2 KZ 50 AM GE 40 UZ 30 KY Cluster 3 20 TJ 10 PK TM AF R² = ,000 10,000 15,000 20,000 25,000 GDP Per Capita (PPP) Source: World Bank Data 2014, ITU World Telecommunication/ICT Indicators database

13 With some countries underperforming % of Internet Users (2013) Country Income Classification (GDP per capita, PPP current international $) Cluster 1 Cluster 2 Cluster 3 Majority access (above 50%) Azerbaijan (AZ) 59% Kazakhstan (KZ) 54% AZ: Upper-middle (USD17,144) KZ: Upper-middle (USD23,211) Partial access (30%-50%) Armenia (AM) 46% Georgia (GE) 43% Uzbekistan (UZ) 38% AM: Lower-middle (USD7,776) GE: Lower-middle (USD7,176) UZ: Lower-middle (USD5,168) Low access (below 30%) Afghanistan (AF) 6% Kyrgyzstan (KY) 23% Pakistan (PK) 11% Tajikistan (TJ) 16% Turkmenistan (TM) 10% AF: Low-income (USD1,946) KY: Lower-middle (USD3,213) PK: Lower-middle (USD4,602) TJ: Low-income (USD2,512) TM: Upper-middle (USD14,004) Source: World Bank Data 2014, ITU World Telecommunication/ICT Indicators database

14 Strong Internet growth rates Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan Turkmenistan Uzbekistan 3-year CAGR +14% +23% +8% +17% +20% +8% +11% +11% +47% +24% Source: Internet Society Global Internet Report 14

15 # of subscribers per 100 inhabitants in an increasingly mobile region indicates that Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan Turkmenistan Uzbekistan Cellular subscriptions per 100 inhabitants Cellular subscriptions global average Source: ITU World Telecommunication/ICT Indicators database 2014 Fixed telephone subscriptions per 100 inhabitants Fixed telephone subscriptions global average 15

16 # of subscribers per 100 inhabitants fixed broadband is becoming less prominent than Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan Turkmenistan Uzbekistan Fixed broadband subscriptions per 100 inhabitants Global average Regional average Source: ITU World Telecommunication/ICT Indicators database

17 # of subscribers per 100 inhabitants mobile and wireless broadband connectivity No data Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan Turkmenistan Uzbekistan Wireless broadband subscriptions per 100 inhabitants Global average Source: ITU World Telecommunication/ICT Indicators database

18 at a rapid pace Wireless broadband subscribers per 100 Inhabitants ( ) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan 10 Turkmenistan Uzbekistan Source: ITU World Telecommunication/ICT Indicators database

19 Is wireless broadband demand driven by cheaper prices, accessibility and/or cheaper devices? Wireless broadband data unavailable Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan Turkmenistan Uzbekistan Fixed (wired) broadband subscriptions per 100 inhabitants Wireless broadband subscriptions per 100 inhabitants % of Internet Users Source: ITU World Telecommunication/ICT Indicators database

20 International Connectivity

21 Landlocked region depending on a few terrestrial cables Source: ITU Interactive Terrestrial Transmission/ESCAP Asia-Pacific Information Superhighway Maps, 21

22 International Internet bandwidth has been growing steadily (In Mbps) Country Afghanistan No Data No Data No Data Armenia 29,858 39,366 59,500 Azerbaijan 57, , ,465 Georgia 67,181 98, ,244 Kazakhstan 119, , ,218 Kyrgyzstan 4,662 5,904 7,923 Pakistan 136, , ,985 Tajikistan 2,174 3,104 4,815 Turkmenistan ,242 Uzbekistan 6,997 10,729 13,062 22

23 So while international bandwidth is growing No data Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan Turkmenistan Uzbekistan Source: TeleGeography Global Internet Geography Report 23

24 the costs of Internet transit traffic are still high Country Cost per Month (USD) Country Cost per Month (USD) Afghanistan USD 35 per Mbps Kyrgyzstan > USD100 per Mbps Armenia No data Pakistan > USD per Mbps Azerbaijan USD20 per Mbps Tajikistan > USD100 per Mbps Georgia No data Turkmenistan >USD100 per Mbps Kazakhstan USD15 per Mbps Uzbekistan USD347 per Mbps Source: ESAP An In-Depth Study of Broadband Infrastructure in North and Central Asia

25 which makes broadband unaffordable. Country Monthly subscription for fixed-broadband Cost of fixed broadband (% GDP/ cap) Cost of fixed broadband (% GDP/ cap PPP) Evaluation Afghanistan USD69 (1Mbps) 124.5% 42.5% Unaffordable Armenia USD250 (10Mbps) 8.6% 3.9% Moderate Azerbaijan USD9.5 (1Mbps) 1.5% 0.7% Moderate Georgia USD30.7 (8Mbps) 1.3% 0.6% Moderate Kazakhstan USD20.6 (4Mbps) 0.5% 0.3% Affordable Kyrgyzstan USD71 (1Mbps) 67.4% 26.5% Unaffordable Pakistan USD29.4 (4Mbps) 6.9% 1.9% Moderate Tajikistan USD11.96 (1Mbps) 13.8% 5.7% Expensive Turkmenistan USD171.4 (512K bps) 51.5% 29.4% Unaffordable Uzbekistan USD37.5 (1Mbps) 24.0% 8.7% Expensive Source: TRPC Research 25

26 Is mobile broadband affordable? Country Monthly subscription for basic mobile cellular with data (USD) Cost of mobile data packages (% GDP/cap) Cost of mobile data packages (% GDP/cap PPP) Afghanistan 8.23 (4GB) Armenia 3.14 (1.5GB) Azerbaijan 5.70 (1GB) Georgia 4.00 (4GB) Kazakhstan 5.32 (1GB) Kyrgyzstan 6.00 (1GB) Pakistan 3.92 (4GB) Tajikistan (1GB) Turkmenistan (4GB) Uzbekistan (1GB)

27 Then what is hindering uptake? Country Mobile penetration (%) 3G subscribers (%) 4G subscribers (%) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan ~0 Tajikistan Turkmenistan Uzbekistan ~0 Source: Telegeography GLobalComms Database

28 Tremendous room for growth 180% 160% 140% 120% 100% 80% 60% 40% Mobile penetration 3G subscribers 4G subscribers 20% 0% Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan Turkmenistan Uzbekistan 28

29 Internet exchange points can bring down affordability substantially Only 3 IXPs in the region? Source: Data Center Map, 29

30 Country Cost per Month (USD) Cost per Month (USD) Afghanistan USD 35 per Mbps 42.5% Armenia No data 3.9% Azerbaijan USD20 per Mbps 0.7% Georgia No data 0.6% Kazakhstan USD15 per Mbps 0.3% Kyrgyzstan Pakistan Tajikistan Turkmenistan > USD100 per Mbps > USD per Mbps > USD100 per Mbps >USD100 per Mbps 26.5% 1.9% 5.7% 29.4% Uzbekistan USD347 per Mbps 8.7% High Internet Transit Traffic Cost Lack of (perceived) demand + Limited supply + Non-competitive market conditions for IXPs Lack of carrier-neutral IXPs Unfavorable bi-lateral peering arrangement for non-incumbents Higher cost, latency in Internet speed, quality of service issues 30

31 While the region also trails in Internet speeds Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyzstan Pakistan Tajikistan Turkmenistan Uzbekistan Fixed broadband speed Mobile broadband speed Global broadband average Global mobile average Source: Ookla Net Index Explorer, retrieved 26 May

32 (Potential) success factors MARKET GOVERNANCE Number of operators Level of competition (i.e. duopoly creating bottleneck VS competition bringing the tariff down) Retail tariff, other taxes Market-led VS Government-led model. Independent operator VS State being a policy maker, regulator and market player as well Government being online TECHNOLOGY AND SERVICE/PROUC TS Access affordability quality (+ content) Interoperability of key networks Spectrum management Forecasting/creating future requirements 32

33 Our questions remain 1. Prices, prices, prices: from IP transit pricing (for AF, AM and GE), whole sale prices of global bandwidth and local access prices (or prices paid by carriers for Ethernet and leased line local access circuits). 2. # of international cables, international gateways, IXPs and ISPs 3. Licensing schemes and other regulations that govern the deployment and maintenance of the terrestrial fiber optic lines and satellite stations 4. Internet usage by individuals, businesses and government that illustrate latent demand/trajectory (e.g. social media, e-commerce) 5. Interoperability and interconnectivity of key networks (e.g. mobile, payments, banking and government) 33

34 Questions? Thank you! 34