ictDATA.org

The UNCTAD B2C E-commerce Index 2020: Spotlight on Latin America and the Caribbean

2021-02-18T12:01:00.003+00:00

Switzerland Climbs to Top of Global E-Commerce Index

https://unctad.org/webflyer/unctad-b2c-e-commerce-index-2020-spotlight-latin-america-and-caribbean

Minimum data consumption: How much is needed to support online activities, and is it affordable?

2021-02-18T11:56:00.002+00:00

The primary payment method for mobile internet usage in most developing countries is prepaid, with the amount tied to a specific volume of data usage. Data volume is therefore a useful yardstick to determine how much is needed to carry out important welfare enhancing activities online.
For foundational online activities, which include websites for public services, health information, shopping, learning, and news, we estimate using data from six developing countries that 660MB per month, per user are needed for these welfare-enhancing activities. For common recreational online activities – particularly social media use – we estimate that an additional 5.2GB per month, per user is needed, for a total of approximately 6GB per month, per user.
While the cheapest 30-day data packages in most of the countries examined exceed this minimum estimate, the cost of these packages exceeds more than 2% of income for the bottom 40% of the population, which risks widening the digital divide.
The COVID-19 pandemic has further increased the demand for data by triggering widespread use of video conferencing for work, learning and health among others. This increased demand, along with the continuous development of more data-heavy content, will continue to inflate the minimum data needed for welfare enhancing activities, which may further exacerbate the digital divide if more affordable packages or other alternatives mechanisms for facilitating connectivity are not provided for the most vulnerable populations.

https://www.worldbank.org/en/topic/digitaldevelopment/brief/minimum-data-consumption-how-much-is-needed-to-support-online-activities-and-is-it-affordable

Digital Inclusion Benchmark 2020

2021-01-11T10:46:00.006+00:00

https://assets.worldbenchmarkingalliance.org/app/uploads/2020/12/DIB2020-Synthesis-report.pdf

In 2020 the World Benchmarking Alliance’s first Digital Inclusion Benchmark ranks 100 of the world’s most influential technology companies on four areas of digital inclusion:

1) Enhancing universal access to digital technologies.

2) Improving all levels of digital skills.

3) Fostering trustworthy use by mitigating risks and harms.

4) Innovating openly, inclusively, and ethically.

The global pandemic has highlighted the urgency of digital inclusion, as we increasingly rely on digital technologies to stay connected, purchase daily necessities, and access healthcare and education. However, this accelerated digitalisation is accompanied by widening digital divides that lock billions of people out of the digital economy. Furthermore, trust in technology is fraying as citizens and governments wake up to the risks and harms of its unexamined and unrestrained applications.

The Digital Inclusion Benchmark results show that commitment and contribution towards digital inclusion is highly uneven across industries in the digital sector, measurement areas, and markets of operation. While a few leading companies comprehensively demonstrate best practices, most have yet to embrace digital inclusion as a core responsibility.

Table ‎1.2: Top ten companies in the benchmark

Rank	Company	Headquarters	Founded	Industry	Revenue US$ billions (FY19)	Score	Score (%)
1	Telstra	Australia	1975	Telecom services	19	1.73	0.87
2	Telefonica	Spain	1924	Telecom services	54	1.62	0.81
3	Orange	France	1941	Telecom services	47	1.59	0.80
4	PLDT	Philippines	1928	Telecom services	3	1.52	0.76
5	Nokia	Finland	1865	Hardware	26	1.51	0.76
6	Cisco	United States	1984	Hardware	52	1.47	0.74
7	Deutsche Telekom	Germany	1947	Telecom services	90	1.37	0.69
8	NTT	Japan	1952	Telecom services	109	1.32	0.66
8	HP	United States	1939	Hardware	59	1.32	0.66
10	Samsung	Republic of Korea	1969	Hardware	198	1.30	0.65

ICT sector

2019-11-06T10:33:00.003+00:00

The Information and Communication Technology (ICT) Sector is formally defined in the International Standard Industrial Classification (ISIC). It consists of different industries including manufacturing, trade and services.

ICT SECTOR CLASSIFICATION
ISIC	ICT MANUFACTURING INDUSTRIES
2610	Manufacture of electronic components and boards
2620	Manufacture of computers and peripheral equipment
2630	Manufacture of communication equipment
2640	Manufacture of consumer electronics
2680	Manufacture of magnetic and optical media
	ICT TRADE INDUSTRIES
4651	Wholesale of computers, computer peripheral equipment and software
4652	Wholesale of electronic & telecommunications equipment and parts
	ICT SERVICES INDUSTRIES
5820	Software publishing
61	Telecommunications
6110	Wired telecommunications activities
6120	Wireless telecommunications activities
6130	Satellite telecommunications activities
6190	Other telecommunications activities
62	Computer programming, consultancy and related activities
6201	Computer programming activities
6202	Computer consultancy and computer facilities management activities
6209	Other information technology and computer service activities
631	Data processing, hosting and related activities; web portals
6311	Data processing, hosting and related activities
6312	Web portals
951	Repair of computers and communication equipment
9511	Repair of computers and peripheral equipment
9512	Repair of communication equipment

Source: United Nations. 2008. International Standard Industrial Classification of All Economic Activities (ISIC). Rev. 4.
https://unstats.un.org/unsd/publication/SeriesM/seriesm_4rev4e.pdf.

Despite the formal classification, there is no international database with detailed data on the ICT sector. The European Commission Prospective Insights in ICT R&D" (PREDICT) database features harmonized ICT sector statistics for 28 European Union (EU) members and 12 non-EU major economies including the US and BRICs (Brazil, Russia, India and China). https://ec.europa.eu/jrc/en/predict/ict-sector-analysis-2019/data-metadata

Some countries have published ICT sector satellite accounts or provide a breakdown of national accounts allowing for a 2 digit ISIC approximation of the ICT sector (i.e., ISIC codes 26, 61, 62 and 63). 2 digit breakdowns are also available from Eurostat and OECD including data for some non-members. (See below)

Trends in the evolution of the ICT sector are discussed in the UNCTAD Digital Economy Report 2019 (https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=2466) including the top ten economies by the largest share of the ICT sector in GDP. UNCTAD notes:

In terms of the share of the ICT sector’s value added in GDP and its distribution by subsector, four of the top five economies are in East Asia and have notable ICT manufacturing industries, with Taiwan Province of China in the lead (figure III.3). Ireland is second, with its ICT sector’s value added accounting for 10 per cent of GDP, mainly due to large United States computer services MNEs using Ireland as a regional base for tax reasons. India ranks tenth, with computer services constituting more than 70 per cent of its ICT sector’s value added.

ICT sector satellite accounts

Azerbaijan. The State Statistical Committee of the Republic of Azerbaijan. 2017. “Information Society in Azerbaijan.” https://www.stat.gov.az/source/information_society/?lang=en.

Belarus. Information society in the Republic of Belarus, 2017. 2017. http://www.belstat.gov.by/en/ofitsialnaya-statistika/macroeconomy-and-environment/information-and-communication-technologies-/publications/index_7866/.

Colombia. Departamento Administrativo Nacional de Estadística (DANE). 2018. “Cuenta satélite de las tecnologías de la información y las comunicaciones (TIC).” https://www.dane.gov.co/index.php/en/estadisticas-por-tema/cuentas-nacionales/cuentas-satelite/cuenta-satelite-de-las-tecnologias-de-la-informacion-y-las-comunicaciones-tic.

Ghana. National Communications Authority. 2017. “Determining the Contribution of ICT/Telecommunications Sector to Gross Domestic Product (GDP) in Ghana.” https://www.nca.org.gh/media-and-news/news/invitation-for-comments-on-the-contribution-of-icttelecommunications-sector-to-gross-domestic-product-gdp-in-ghana/.

Israel. Bank of Israel. 2018. “Annual Report 2017 - Statistical Appendix and Complementary Data.” https://www.boi.org.il/en/NewsAndPublications/RegularPublications/Pages/DochAppPartB2017.aspx.

Malaysia. Department of Statistics. 2017. “Information and Communication Technology Satellite Account 2016.” https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=319&bul_id=MjhtcEV6dGFSOGc3NnEwaytRUkhTUT09&menu_id=TE5CRUZCblh4ZTZMODZIbmk2aWRRQT09.

Mauritius. Statistics Mauritius. 2018. “ICT Statistics Year 2017.” http://statsmauritius.govmu.org/English/Publications/Pages/ICT_Stats_Yr17.aspx.

New Zealand. Ministry of Business, Innovation and Employment. 2017. “ICT Sector Report.” https://www.mbie.govt.nz/about/whats-happening/news/2017/new-zealands-ict-sector-stronger-than-ever.

South Africa. Statistics South Africa. 2017. “Information and communication technology satellite account for South Africa, 2013 and 2014.” http://www.statssa.gov.za/?page_id=1854&PPN=Report-04-07-01.

2 digit ISIC approximations of ICT sector

Eurostat. National accounts aggregates by industry (up to NACE A*64) (nama_10_a64). https://ec.europa.eu/eurostat/data/database

OECD. National Accounts at a Glance. https://stats.oecd.org/Index.aspx?DataSetCode=NAAG

OECD. Input-Output Tables (for 2015). https://stats.oecd.org/Index.aspx?DataSetCode=IOTS

e-Commerce & retail employment

2019-11-03T17:36:00.000+00:00

There is a perception that online e-commerce is decreasing employment in the traditional bricks and mortar retail industry. In order to gauge this assumption, data on overall retail trade and pure play online retail employment in the European Union (EU) and the United States was analyzed. Apart from overall retail trade employment, both also have a breakdown of employment by pure play retail e-commerce (i.e., no physical store). The current International Standard Industrial Classification (ISIC) has a class (4791) under retail trade that encapsulates retail e-commerce: "Retail sale via mail order houses or via Internet." Mail order is included but likely comprises a small portion. Both the EU and the United States have employment data for this category.

Retail employment grew in both between 2011 and 2016. In the EU, traditional retail trade did decline but this was more than made up for by the increase in retail sales over the Internet and mail order. In the USA, both traditional retail and e-commerce employment grew. Bricks and mortar retail also grew e-commerce related employment. However these figures are not possible to determine.

Retail trade employment change (000s), 2011-2016
	EU	USA
Retail	(120.51)	674
via Internet	220.13	118
Net	99.62	792

Note: Retail excludes via Internet.
Source: Eurostat and Bureau of Labor Statistics.

Retail e-commerce also generates downstream employment in logistics including delivery services and warehousing. A study found that in the United States, around 400,000 jobs were created in the electronic shopping and warehouse industries between 2007 and 2017 compared to a loss of 140,000 in brick and mortar retail (i.e., a net gain of 260,000); 2.1 jobs were created in warehousing for each job in e-commerce (Mandel 2017).

The United States Bureau of Labor Statistics compiles detailed occupational data on employment in the electronic shopping industry. Around two fifths of occupations are administrative, just over 15% are related to transportation and 6% have to do with computer and related activities. Arts and design occupations such as catalog creation and photography accounted for 3%.

NAICS 454100 - Electronic Shopping and Mail-Order Houses, May 2017, United States
Code	Occupation	Employment	Share
43-0000	Office and Administrative Support Occupations	165,950	42%
53-0000	Transportation and Material Moving Occupations	61,340	16%
41-0000	Sales and Related Occupations	40,360	10%
13-0000	Business and Financial Operations Occupations	29,820	8%
11-0000	Management Occupations	23,960	6%
15-0000	Computer and Mathematical Occupations	23,210	6%
51-0000	Production Occupations	13,870	4%
29-0000	Healthcare Practitioners and Technical Occupations	13,090	3%
27-0000	Arts, Design, Entertainment, Sports, and Media Occupations	10,930	3%
	Others	8,700	2%

Mandel, Michael. 2017. How Ecommerce Creates Jobs and Reduces Income Inequality. Progressive Policy Institute. https://www.progressivepolicy.org/issues/economy/%ef%bb%bf%ef%bb%bfhow-ecommerce-creates-jobs-reduces-income-inequality/

Digital Transformation and Opportunities in the Kyrgyz Republic

2019-09-01T13:40:00.000+01:00

Advances in information and communication technology (ICT) are creating tremendous opportunities to improve service delivery and expand economic opportunities in the Kyrgyz Republic. Digital technologies increase transparency, reduce corruption, and enhance efficiency by minimizing
contact between citizens, businesses, and government for the provision of public services. For the Kyrgyz Republic, ICT could address barriers posed by its geographic remoteness and high transport costs. The country’s strategic location along major crossroads between Asia and Europe can be an incentive to seriously develop the country’s ICT, because the transport corridors will require a wide range of telecommunication and internet services to support day-to-day operations. Direct ICT interventions, such as a single customs window, which can streamline the document processing required to facilitate trade across borders and remote sensing that can be used to monitor goods transported, can hasten, simplify, and facilitate transport and trade. Given the country’s plan to develop sectors such as hydropower, tourism, and other services, it will need more sophisticated communication and information processing to help boost the potential of these sectors.

http://dx.doi.org/10.22617/TCS190437-2

Azerbaijan: Country Digital Development Overview

2019-04-24T10:41:00.000+01:00

ICT is expected to play a leading role in diversifying the economy of Azerbaijan and reducing its reliance on hydrocarbons. This overview was prepared to adequately respond to the Government of Azerbaijan’s priority on the development of the ICT sector as a driver of economic diversification during the implementation of ADB’s next Country Partnership Strategy for Azerbaijan (CPS 2019–2023). The report draws on consultations undertaken in Baku from 18-20 September 2018.

https://www.adb.org/sites/default/files/institutional-document/484586/aze-digital-development-overview.pdf

2018-11-10T15:02:00.001+00:00

The Information and Communications for Development report analyses how the data revolution is changing the behavior of governments, individuals, and firms and how these changes affect economic, social, and cultural development. This is a topic of growing importance that cannot be ignored, and the report aims to stimulate wider debate on the unique challenges and opportunities of data for development. It will be useful for policy makers, but also for anyone concerned about how their personal data is used and how the data revolution might affect their future job prospects.

https://www.worldbank.org/en/topic/digitaldevelopment/publication/data-driven-development

Africa: Reliable Electricity and the Digital Economy

2018-04-01T12:05:00.000+01:00

Many countries in Sub-Saharan Africa seek to diversify their economies with information and communications technologies (ICT), including expanding ICT as a sector and increasing its use in enterprises. One of the core ICT infrastructure elements is data centers. These facilities are a vital engine of the digital economy, storing data, hosting websites, and enabling cloud-based applications. Data centers are virtual data factories that make productive use of electricity, with measurable economic impact on gross domestic product, employment, and government tax revenue (Dutch Datacenter Association 2017).

Data centers consume lots of electricity to power computer equipment and keep it cool. In 2011, Google reported that it used 260 megawatts of electric power for its data centers (Glanz 2011), which is greater than the 2014 installed capacity in 19 Sub-Saharan African countries (Trimble et al. 2016). Data centers require high levels of reliability to ensure a seamless, nonstop flow of data. Reliability is defined by industry standards, ranging from 99.67 percent availability with no more than 29 hours of interruption per year for tier 1 data centers, to 99.995 percent reliability with just 0.8 hour of interruption per year for the highest tier 4 centers. Most Sub-Saharan African nations would find it difficult to meet even tier 1 reliability. The standards also call for a guaranteed source of electrical backup that can power the center for at least half a day (Uptime Institute 2012).

Lack of enterprise-grade reliability requirements for industry certification generally rules out the feasibility of large data centers in many Sub-Saharan African countries. Although virtually every country in the region has a data center, the centers are small, serving a narrow set of business and government users. Due to the region’s challenging environment for reliable and inexpensive electricity, most businesses host their data outside the region. This results in a large volume of data transmitted to overseas data centers, requiring significant amounts of international Internet bandwidth. Along with connectivity and storage costs, it takes a longer time to access overseas data centers, raising latency. Security is an issue, as increasing amounts of government, business, and personal information are transmitted abroad, with vague data protection.

To build up its national data center industry and improve latency, Rwanda launched an initiative to repatriate 1,000 websites hosted abroad (RICTA 2015). An analysis of the program found that quality was improved for domestic users due to faster access to the sites (Internet Society 2017). Visitor engagement was high, with more page views and return visits due to the enhanced performance. The skills of web-hosting employees increased, due to technical requirements to manage additional websites. Although latency improved, it is still difficult to convince local businesses to place their websites in Rwanda, due to the lower price of hosting overseas. This is primarily because of the high cost of electricity for data centers in Rwanda. The government is contemplating subsidizing the cost of electricity for local data centers, to make local hosting more attractive, improve latency, and strengthen data sovereignty (Minges 2017).

Despite concerns about reliability, there is growing interest in installing large data centers in the region to achieve better latency and reduce the cost of international bandwidth. In 2017, Microsoft, one of the world’s largest owners of data centers, announced it would build two data centers in South Africa, to support its cloud-based services. Notably, South Africa’s electricity supply is considered the second most reliable in the region after Mauritius (Afrobarometer 2016). The new data centers will have faster speeds compared with accessing cloud services in Europe or the United States; international connectivity costs will be reduced; and trust will be increased, as the centers will have to comply with South Africa’s data protection law (Marston 2017). Electricity reliability is critical for other countries in the region that want to develop their digital economies.

Dutch DataCenter Association. 2017. The Economic Impact of Multi-Tenant Data Centers In the Netherlands. https://www.vijfhart.nl/wp-content/uploads/2017/02/report_-_2017_-_economic_impact_dutch_data_centers.pdf

James Glanz. 2011. "Google Details, and Defends, Its Use of Electricity." The New York Times, 8 September. http://www.nytimes.com/2011/09/09/technology/google-details-and-defends-its-use-of-electricity.html

Trimble, Christopher Philip; Kojima, Masami; Perez Arroyo, Ines; Mohammadzadeh, Farah. 2016. Financial viability of electricity sectors in Sub-Saharan Africa: quasi-fiscal deficits and hidden costs. Policy Research Working Paper 7788. Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/182071470748085038/Financial-viability-of-electricity-sectors-in-Sub-Saharan-Africa-quasi-fiscal-deficits-and-hidden-costs

Uptime Institute. 2012. Data Center Site Infrastructure Tier Standard: Topology. http://www.gpxglobal.net/wp-content/uploads/2012/10/TIERSTANDARD_Topology_120801.pdf

RICTA. 2015. "Growing The Rwandan Internet Content Hosted In Rwanda (1k Websites)." http://ricta.org.rw/IMG/pdf/1kwebsites_project_finalversion.pdf

Internet Society. 2017. The Benefits of Local Content Hosting: A Case Study. https://www.internetsociety.org/sites/default/files/ISOC_LocalContentRwanda_report_20170505_final.pdf

Michael Minges. 2017. Leveraging Investments in Broadband for National Development: The case of Rwanda and Senegal. New York: UN-OHRLLS. https://unohrlls.org/custom-content/uploads/2017/07/Leveraging-Investments-in-Broadband-for-National-Development-2017.pdf

Afrobarometer. 2016. Off-grid or ‘off-on’: Lack of access, unreliable electricity supply still plague majority of Africans. http://afrobarometer.org/sites/default/files/publications/Dispatches/ab_r6_dispatchno75_electricity_in_africa_eng1.pdf

Robert Marston. 2017. "Microsoft’s data centre investment to boost SA cloud adoption." IT News Africa, 12 July. http://www.itnewsafrica.com/2017/07/microsofts-data-centre-investment-to-boost-sa-cloud-adoption/

Published in: World Bank Group. 2018. Africa's Pulse, No. 17, April 2018. Washington, DC: World Bank. https://www.openknowledge.worldbank.org/handle/10986/29667

ICTs, LDCs and the SDGs Achieving universal and affordable Internet in the least developed countries

2018-01-31T12:35:00.000+00:00

This report analyzes ICT developments in the LDCs and tracks progress towards achievement of Sustainable Development Goal (SDG) Target 9.c, to "significantly increase access to information and communications technology and strive to provide universal and affordable access to the Internet in least developed countries by 2020".

Its analysis is based on a new, three-dimensional framework which classifies LDCs into three categories based on their overall performance across the areas of access, affordability and skills. This will help countries identify areas that are most pressing and where to direct policy and scarce financial and human resources.

https://www.itu.int/en/ITU-D/LDCs/Pages/ICTs-for-SDGs-in-LDCs-Report.aspx?View=%2525252525252525257B78bbe9a0-3fae-4e7c-a549-dcf167377f5a%2525252525252525257D&SortField=URL&SortDir=Asc

UNCTAD B2C E-COMMERCE INDEX 2017

2017-10-03T12:50:00.000+01:00

UNCTAD B2C E-commerce Index 2017 (TN/UNCTAD/ICT4D/09)

03 Oct 2017

Leapfrogging : The Key to Africa's Development?

2017-09-20T15:15:00.000+01:00

The potential for accelerated,
sustained, and inclusive growth often have
been driven by innovation and widespread technology
adoption. Accelerated growth can be achieved by leapfrogging, i.e., a large boost in infrastructure development. ICT, specifically mobile technologies, is one area where the region has leapfrogged. Although fixed telephone networks have been around since the early 1900s, access was always limited in Sub-Saharan Africa, at less than 2 percent of the population. Once the first mobile networks launched in Sub-Saharan Africa in 1989, they grew rapidly. The gap between Sub-Saharan Africa and the rest of the world dropped from 99 percent in 1989 to 23 percent by 2015. This report has a chapter on ICT with more detailed examples of leapfrogging as well as recommendations for how to create an enabling environment for encouraging leapfrogging.
https://openknowledge.worldbank.org/handle/10986/28440

Leveraging Investments in Broadband for National Development: The case of Rwanda and Senegal

2017-07-01T12:30:00.000+01:00

In order to have in-depth understanding on the level of investment in broadband and its application, UN-OHRLLS commissioned two studies in Africa: Rwanda and Senegal. The case studies document how the selected LDCs are leveraging investment in broadband to contribute towards the achievement of sustainable development.
The selection of Rwanda and Senegal as study areas was determined by the following: evidence of an upward trend in broadband penetration; clear strategies and concrete implementation; and, examples of outcomes because of investing in broadband. The selection criteria also took into consideration geographical coverage with Rwanda an East African landlocked nation and Senegal a sea facing West African country.
https://unohrlls.org/custom-content/uploads/2017/07/Leveraging-Investments-in-Broadband-for-National-Development-2017.pdf
See presentation at: http://unohrlls.org/custom-content/uploads/2017/03/LDC-BB-1Mar2017-Reduced-1.pdf

ASEAN Investment Report 2015

2015-12-19T16:01:00.001+00:00

Future telecommunication investment in ASEAN will be driven by the expansion of mobile broadband networks, upgrades of wired access and national and international backbones to fibre optic, and increases in network capacity.

The report covers investment and connectivity across key infrastructure sectors in the ten member Association of Southeast Asian Nations (ASEAN). It forecasts that over US$100 billion a year will be needed for infrastructure investment in ASEAN. Of that figure, US$9 billion will be for telecommunications networks. The report is full of information including the top 100 ASEAN companies (by market capitalization) of which there are three telecommunication firms in the top 10 with Singapore Telecom having the highest market capitalization of all ASEAN companies. The report notes the high level of foreign investment in the region's telecom sector with all countries but Brunei having at least one foreign strategic investor in their telecom sector.
ASEAN Investment Report 2015
Jakarta: ASEAN Secretariat, November 2015
http://www.asean.org/news/asean-secretariat-news/item/asean-investment-report-2015-infrastructure-investment-and-connectivity

SMS in South East Asia: 3 different paths

2015-12-18T23:11:00.003+00:00

Cultural, calligraphic & technical factors at play in explaining diverse text messaging markets in region

The Association of Southeast Asian Nations (ASEAN) account for over a quarter of global SMS traffic. At the same time, they have widely diverse SMS markets that can be classified into 3 groups: 1) Indonesia and the Philippines where texting is a way of life and SMS revenues remain vital to the industry; 2) Malaysia, Singapore and Thailand where 4G networks and smartphone adoption is pulling cellphone owners to use Over The Top (OTT) alternatives for messaging; and 3) Indochinese nations where SMS never really took off with a key factor being limited availability of local character sets on cellphones.

Indonesia and the Philippines are in a class of their own both within ASEAN and the world. Filipinos send more text per user than any other country on the globe while Indonesia has the largest volume of SMS traffic in the region. Texting is a vital part of mobile operator revenues in these two countries generating US$ 3.5 billion in 2014 and accounting for almost 2/5ths of the total in the Philippines and a little over 1/5th in Indonesia. Though there has been some substitution by Internet-based texting applications, there has not been a wholesale decline, thanks in part to smart operator management trading extremely low text prices for volume. SMS is a way of life in both countries where as far back as 2008 it was cited as a “killer application” in the Philippines (SIDA, 2008, The innovative use of mobile applications in the Philippines) and the 2010 Indonesian census is referred to as the "SMS Census" (PRB, 2010, Communication Surprises in the 2010 Indonesian Population Census). The use of the Latin alphabet in these countries has also been a major factor driving texting.

The smartphone revolution is impacting text markets in Malaysia, Singapore and Thailand. This trio has the highest smartphone penetration in the region and at 88% of the population, Singapore has the 2nd highest smartphone penetration in the world, after the UAE. While both Malaysia and Singapore had high texting usage in the past—partly due to widespread use of English and in the case of Malaysia, the Malay language using the Latin character set—it has been declining rapidly since 2010. SMS never really took off in Thailand due to the calligraphic challenge of typing Thai on a small cellphone. Any hope of it doing so effectively died when operators were awarded 3G frequency and rapidly migrated their subscribers to the new networks to avoid paying revenue sharing fees with the government. Thai operators have been actively promoting smartphones and SMS is estimated to account for only around US$100 million of total mobile service industry revenue in 2014.

Use of Khmer on cellphones in Cambodia

Indochina nations such as Cambodia and Laos suffer from the same problem as Thailand in that they not use the Latin alphabet. Worse, since they are relatively small markets, there was not a major effort to include Khmer and Laotian on older cellphones. Only around a third of Cambodian cellphones were Khmer-enabled in 2013. This figure had risen to almost two thirds in 2015 thanks to rapid adoption of smartphones but means that users will use Internet-based messaging rather than SMS. Another problem is that so many Cambodians were used to not having Khmer on their older handsets they just assume that smartphones don't either (see: Mobile Phones and Internet in Cambodia 2015). Countries in Indochina also persist with higher off-net pay as you go SMS tariffs. This detracts from the major benefit of SMS--it can be sent to any subscriber and not just those that have downloaded an Internet messaging application.

Click to enlarge

The end of P2P SMS revenue?

2015-12-16T23:05:00.000+00:00

It is becoming more difficult to determine revenue data for P2P SMS, particularly in markets where bundled mobile subscriptions are becoming increasingly prevalent. If unlimited voice, messaging and data are bundled in a mobile subscription plan, then how can their revenue shares be determined?

FCC, 2013, 16th Annual Mobile Report (Click to enlarge)

The United States Federal Communications Commission (FCC) used to estimate messaging revenue but gave up after 2008 due to the prevalence of bundled plans and now just identifies voice and data traffic although even splitting those is becoming increasingly problematic. In 2008, the FCC estimated that text messaging revenues in the United States were US$11.4 billion. With a total volume (sent and received) of just over 1 trillion messages, the average revenue per text message (sent and received) was US$0.011 (1.1 US¢). Similarly in 2015, the French regulator announced it would no longer provide a breakdown of mobile revenue due to the prevalence of bundled plans.

The difficulty of determining P2P SMS revenue is less of an issue in countries where prepaid is prevalent. Here it is relatively easy to determine messaging revenue based on pay per use or text plans. At the end of 2014, except for North America, there was sufficient messaging revenue statistics to estimate a global total. One can assign a value for North America based on the average price per message calculated for the rest of the world. The UK regulator, OFCOM, also has an estimate of global SMS revenue in its 2015 International Communications Report. The figures are somewhat close to the ictDATA numbers. Including the articifical estimate for North America results in a global estimate of US$52 billion for text messaging revenue in 2014 compared to OFCOM's estimate of US$54 billion. Over time, as voice and messaging migrate to Internet-based applications, then all mobile revenues might be from data.

Click to enlarge

SMS Statistics Explained

2015-12-16T19:34:00.001+00:00

There are a number of supply and demand side indicators useful for analyzing the SMS market. On the supply side, the International Telecommunication Union (ITU) has identified the number of SMS sent as a relevant indicator to collect. The definition is provided in the ITU's Handbook for the Collection of Administrative Data on Telecommunications/ICT. The key point is that the definition refers to SMS "sent from mobile handsets to other mobile handsets (peer-to-peer), both to national and international destinations." The data are supposed to exclude "SMS received, value-added SMS, premium SMS and SMS sent from web-based services." In practice a number of countries do not strictly adhere to this definition, hampering comparability.

ITU SMS Sent definition (Click to enlarge)

Countries where receiving party pays (RPP) has been the norm (i.e., operators charge users for both outgoing and incoming calls and texts) typically report both messages sent and received. This is the case for example for Canada, the United States and Singapore. The number of messages sent should roughly match the number received so the figure could be divided by two. There might be an imbalance between international SMS sent and received but in practice, overseas SMS accounts for only a small portion of the total. What is a bigger issue is whether the total traffic represents an accounting or technical measure. If it is an accounting measure, then the received text messages sent within a network (on-net) might not be included since the operator receives no payment for them. In that case, dividing the total traffic by two would underrepresent the sent messages.

ANACOM, Mobile Service (click to enlarge)

Most SMS messages are to and from mobile subscribers. Take Portugal where 99.2% of text messages are between domestic mobile subscribers with international, Value-Added, Machine to Machine (M2M) and the fixed network accounting for a small proportion.

Most countries use a technical rather than accounting measure to record SMS traffic. This is because text messages can be bundled into a plan. The technical measurement ensures that all bundled SMS are recorded. Some countries use other methods. For example in Turkey, text messages were counted upon their arrival at the message switching center. However this resulted in text messages in Turkish being counted as more than one message. From 2014, messages were counted according to billing. As a result, SMS traffic dropped 18.2% in the first quarter of 2014 (compared to a drop of 5.7% the previous quarter and -7.2% the subsequent quarter).

The number of text messages sent per mobile subscriber per month can be calculated by dividing the number of text messages by the average number of subscribers (see this post for the top 10 in 2014).

Another ITU indicator is messaging revenue. Here the definition includes both SMS and MMS. MMS accounts for just a small proportion of total text so it is not a major issue that the revenue streams are combined. What is problematic is that it is becoming increasingly difficult to account for messaging revenue due to growing bundling of voice, message and text services.

ITU messaging revenue definition, (Click to enlarge)

The revenue data allow the Average Revenue Per Text to be calculated. This is calculated for India where the underlying data is published by the Telecom Regulatory Authority of India (India). In the 2nd quarter of 2015, ARPT was 0.24 US¢. SMS accounted for 2.4% of mobile revenues in India during that period.

Click to enlarge

ITU SMS price definition (click to enlarge)

Other pricing indicators include the actual tariff for an SMS. Here the ITU asks for the prices of an on-net and off-net pay as you go SMS. Prices for some African nations are shown in this post.

The SMS Termination Rate (STR) is the amount that one operator charges another to deliver a cross network message. In some countries, Sender Keeps All (SKA) is used whereby operators keep all of the revenue from and do not charge for delivering cross network texts. Other countries have STRs that are either agreed amongst operators or established by the regulator. The Body of European Regulators for Electronic Communications (BEREC) publishes STRs for their region (see this post).

Pew text messaging (click to enlarge)

On the demand side, the percentage of mobile users who send a text message reflects the popularity of the service. A few countries compile this. The Pew Research Center has compiled data on SMS users in a number of countries with the proportion of mobile users sending text ranging from 98% in the Philippines to just 37% in Pakistan. This indicator is useful for gauging demand and analyzing why SMS usage is so much more popular in some countries than others (e.g., pricing, literacy, etc.).The intensity of usage can also be obtained from surveys. For example in France, texters are asked how many they send a week (101 in 2014, see post).

SMS can be contrasted with other messaging methods. Ongoing panel surveys from ONTSI in Spain found that in the 1st quarter of 2014, only 5.5% of Spaniards 15 years and older sent a text message every day compared to 22% who used their mobile phone to send an email (ONTSI, 2015, “Las TIC en los hogares españoles”, http://www.ontsi.red.es/ontsi/es/estudios-informes/xlvi-oleada-del-panel-hogares-“las-tic-en-los-hogares-españoles”-4t2014)

The purpose of SMS could also be derived from surveys. A Canadian survey found that of those who text, 18% use SMS to contact family each day and 32% to contact friends (Statistics Canada, 2014, Canadians’ connections with family
and friends, http://www.statcan.gc.ca/pub/89-652-x/89-652-x2014006-eng.htm).

SMS and Data

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One factor impacting SMS usage is the increase in smartphones and hence greater use of Internet-based messaging alternatives. A chart from the Irish electronic communications regulator illustrates this tendency showing SMS volumes declining while data usage is rising rapidly.

Comreg, Irish Communications Market [Click to enlarge]

Similarly the Luxembourg Institute of Regulation (ILR) shows voice, text and data traffic generated over the country's mobile networks, with the latter growing rapidly.

ILR, Rapport statistique des télécommunications [Click to enlarge]

Despite the rapid growth of data use, SMS is still a leading activity for cellphones, even smartphones. A survey of smartphone owners across 8 countries published by OFCOM, the electronic communications regulator in the UK, found that SMS was the most popular use, except in Japan, Germany and Spain. In Japan, SMS has never caught on with users preferring email while in Germany and Spain, high prices for SMS has discouraged use.

OFCOM, International Communications Market Report 2015 [Click to enlarge]

SMS in Sub-Saharan Africa 2014

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While SMS is declining in most developed markets due to competition from Internet-based messaging applications, the picture is more nuanced in Sub-Saharan Africa. In some countries, growth has been explosive, in others it has been flat and in a few, usage is declining. Tanzania is the region's SMS superstar with the highest volume of SMS (34 billion sent) and the highest number of text messages sent per subscriber per month (96) in 2014. 92% of Tanzanian cellphone owners use SMS, the 2nd highest proportion in the region among countries for which such statistics are available. Growth has also been solid in Kenya. It is interesting that texting growth continues given that newer subscribers tend to be more marginal and not intensive SMS users. SMS has been in decline in two of the region's more sophisticated mobile markets, Mauritius and South Africa, no doubt due to rising smartphone penetration and alternative messaging applications. In some countries, the SMS market is stagnant. Nigeria is a good example where despite regulatory interventions by the Nigerian Communications Commission (NCC) to lower SMS prices, the market is flat with barely over 1 billion texts sent in 2013. NCC reduced the SMS termination rate to N1.02 (0.64US¢) in 2009 and established an off-net price cap of N4 (2.5 US¢) in 2013. It seems to have had little impact where on average a mobile subscriber sends just 1 text per month even though Nigeria has relatively low retail prices and 80% of mobile users claim to text. Substitutes for texting are likely prevalent in Nigeria; according to Facebook there were 12 million Nigerians using their mobile phone to access the social network in December 2015, the largest market in the region.

In general, prices would seem to stimulate usage. In Kenya it costs just 1.1 US¢ to send a text for those not on a plan. In Tanzania, an SMS data plan gives 10 texts a day for 9.1 US¢. Familiarity with other popular text-type applications may make users comfortable with SMS. This appears to be the case in Kenya and Tanzania where there is high mobile money use.

Click to enlarge

Some 130 billion SMS were sent by Sub-Saharan African mobile subscribers in 2014, generating estimated revenues of US$ 1.7 billion for the region's mobile operators.

The universality of SMS—it works on the most basic phone—makes it an attractive platform for social and economic development interventions. Take health where ta number of SMS-based applications have been developed in the region. Examples include:

In Kenya, weekly text SMS were sent to AIDS patients to remind them to take their antiretroviral drugs. Those who received the text messages had significantly higher rates of taking the drugs than those who did not receive them. *
In the Zambia, the free U-Report SMS service targeting youth offers information on HIV/AIDS and STDs (left). It had some 41,000 users by February 2014. Some two thirds have contacted counsellors through SMS, generating an average of four requests per user. On average, each of the three counsellors fields 80 SMS requests every day.**
In Senegal, mobile subscribers can send an SMS to a special number to receive a message listing open pharmacies in the vicinity. ***

* Lester et al. 2010. “Effects of a Mobile Phone Short

Message Service on Antiretroviral Treatment Adherence in

Kenya (WelTel Kenya1): A Randomised Trial.” The Lancet. http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(10)61997-6/abstract

** UNICEF. 2014. Zambia U-report, Revolutionizing HIV Response among Adolescents and Young People through SMS. http://newsletter.childrenandaids.org/zambia-u-report-revolutionizing-hiv-response-among-adolescents-and-young-people-through-sms/

*** Sen Santé Pharmacie, une solution innovante d’accès aux pharmacies de garde par SMS, http://healthcare.orange.com/a-la-une/a-la-une/2014/Sen-Sante-Pharmacie-une-solution-innovante-d-acces-aux-pharmacies-de-garde-par-SMS

Also see: SMS texting is helping solve Africa’s health infrastructure problem, http://qz.com/502706/sms-texting-is-helping-solve-africas-health-infrastructure-problem/
Pew, Cell Phones in Africa: Communications Lifeline, http://www.pewglobal.org/2015/04/15/cell-phones-in-africa-communication-lifeline/

French SMS market 2014

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France is one of the more robust text messaging markets in the world. French mobile subscribers sent almost 200 billion SMS in 2014, making it the world's 7th largest market. Despite increasing competition from Internet-based messaging services, SMS and MMS revenues have declined marginally since 2010, from US$3.2 billion to US$2.9 billion while traffic has increased. One reason is the country has one of the lowest SMS termination rates in Europe (1.3 US¢), encouraging use. According to the French electronic communications regulator ARCEP, messaging made up 15.5% of total mobile revenues in 2014, unchanged from 2013. ARCEP will no longer publish messaging revenues from 2015 since bundling and add-on plans have made it more difficult and artificial to allocate revenue to different services.

In terms of usage, France ranks 5th in the world with a mobile subscriber sending an average of 245 SMS per month. CRÉDOC ("Centre de Recherche pour l'Étude et l'Observation des Conditions de Vie" / Research Institute for the Study and Monitoring of Living Standards) carries out annual surveys on ICT use. In 2014 it reported that 74% of the French population 12 years and older sent SMS (equivalent to 83% of mobile telephone users). These users sent on average 101 text per week in 2014, but marked the first time usage dropped. This is more than 1.6 times the calculated figure which includes all mobile subscribers and not just those that text.

ARCEP, Observatory of the Electronic communications market in France, http://www.arcep.fr/index.php?id=12954&L=1
CRÉDOC, La diffusion des technologies de l information et de la communication dans la société française (2014), http://www.credoc.fr/publications/abstract.php?ref=R317

For another perspective and historical data see: "SMS volume in France grows 30 percent", http://www.netsize.com/sms-volume-in-france-grows-30-percent/

Click to enlarge

From World SMS Markets 2014. Features 10 year time series of P2P SMS traffic for over 50 countries accounting for over 95% of the world SMS market as well as supplementary data for select countries (messaging revenue, SMS users (% of mobile users), SMS termination rates).To order, contact us.

Global SMS market 2014

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The number of SMS sent by mobile subscribers around the world continued to decline in 2014. After peaking at 6.6 trillion messages in 2012, the text message market dropped 7% from 2013 to reach 6.0 trillion messages in 2014. Nonetheless SMS continues to remain attractive particularly given its universality--any mobile subscriber can be reached by a text message.

The 6.0 trillion messages sent around the world in 2014 translate to some 16 billion per day. The statistics indicate that mobile subscribers around the world sent on average 73 SMS per month. The average retail price of a SMS was 0.7 US¢ (US$0.007) in 2014 (calculated as messaging revenue / number of SMS). This translates into retail revenues of around US$ 44 billion from peer to peer text messages for the world's mobile operators.It's quite astounding that a difference of 0.1 US¢ in average revenue per text makes of difference of US$6 billion in revenues.

Click to enlarge

To order, contact us.
Revised 13 Dec. 2015

Philippines tops for SMS usage in 2014

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The Philippines remains at the top of the SMS usage ranking for 2014. It temporarily lost top spot to Costa Rica for one year in 2011. Text messaging skyrocketed in Costa Rica following the launch of competition in the mobile market in 2011. Statistics on SMS usage in Costa Rica only became available from the regulator after our 2011 SMS market review was conducted. Similarly, SMS data for New Zealand has only recently become available from that country's Commerce Commission which would rank the nation 7th in 2011. By 2014, Costa Rica had fallen to 10th with growing mobile data usage usurping texting. Malaysia and Turkey fell out of the top ten in 2014, replaced by France and Argentina. SMS usage remains firm in the US, Canada, Venezuela, Indonesia and Pakistan.

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SMS interconnection rates and text message usage in Europe

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European countries with low SMS termination rates generate more text message traffic.

According to the Body of European Regulators for Electronic Communications (BEREC), the simple average SMS termination rate in the region was €2.35 cents (US 3.13¢) per message at the end of 2014 (see figure below). The termination rate is the amount that one mobile operator must pay another mobile operator to deliver a cross-network SMS. In Serbia and Slovenia, there is no SMS termination rate. The highest rate is in the Netherlands (5.60) and the lowest in Denmark (0.15).

SMS termination rate, 1 January 2015, source: BEREC (click to enlarge).

The figure below shows a plot of SMS interconnection rates compared to the number of SMS sent per mobile subscriber per month. The average is around 75 SMS sent per mobile subscriber per month. All of the countries except one with below average SMS termination rates generate more than 75 SMS per subscriber per month. Macedonia does not fit the pattern with a measly 15 SMS per subscriber per month. Only three of the countries with above average SMS termination rates generate more than 75 SMS per subscriber per month. Of those three, it is likely that most SMS is sent within network, thereby unaffected by the termination rate. France, where the termination rate is one € cent, generates the most SMS traffic per user by some margin.

Click to enlarge

School Connectivity for the 21st Century

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Today, the fact that a school is connected to the Internet is not as important as how it is connected, what its connection speed is and whether it has sufficient in-school Internet access for laptops, tablets and other digital devices in classrooms.

The emergence of one-to-one computer initiatives along with Bring Your Own Device (BYOD) and rise of cloud computing is placing high demand on

school connectivity. This report looks at five countries (Ireland, New Zealand, Portugal, United States and Uruguay) and how they have upgraded Internet access in primary and secondary schools in a relatively short period of time. The report finds that having a vision, a concrete plan, adequate funding, monitoring and evaluation, content and teacher training are the successful ingredients for connecting schools. The report features a number of comparative metrics relevant for anyone interested in the infrastructure side of school connectivity in the 21st century.
For more information and to download the report:
https://blogs.cisco.com/gov/connecting-schools-and-students-via-smart-policy

Cellphones rapidly shrinking digital divide in Africa

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The growing availability of household surveys and census data in Africa is uncovering the true nature of phone access across the continent. This demand side data offers a more realistic snapshot than the subscription-based data that is typically used to highlight cellphone access. Drawing on the survey data, it emerges that seven in ten Sub-Saharan African households had a mobile phone in 2014. This is a massive increase from a decade earlier when only around one in five homes had a cellphone.

A number of African countries even have a higher level of mobile household penetration than North America where rates were 85 and 89 in Canada and the United States in 2013. In many more African nations, over 90% of urban households have a telephone suggesting that the barriers to connecting the remaining households are more about lack of electricity and cellphone coverage rather than affordability.

Sub-Saharan Africa, Households with mobile phone (%), 2014 or latest
	Latest	Year
South Africa	96	2014
Morocco	94	2014
Senegal	94	2014
Tunisia	93	2012
Mauritius	92	2014
Gabon	92	2012
Gambia	91	2013
Algeria	91	2012
Egypt	90	2014
Cape Verde	89	2014
Namibia	89	2013
Botswana	87	2013
Burkina Faso	86	2014
Ghana	85	2014
Congo	82	2012
Côte d'Ivoire	81	2012
Mauritania	77	2013
Nigeria	75	2013
Mali	74	2013
Togo	74	2014
Comoros	73	2012
Benin	72	2012
Uganda	68	2014
Cameroon	67	2011
Equatorial Guinea	67	2011
Zambia	66	2014
Chad	66	2013
Guinea	65	2012
Liberia	65	2013
Zimbabwe	62	2011
Tanzania	61	2012
Djibouti	60	2012
Rwanda	56	2013
Sierra Leone	55	2013
Angola	52	2011
Niger	50	2012
Malawi	49	2014
Congo, D.R.	39	2014
Mozambique	34	2011
Burundi	32	2012
Madagascar	25	2013
Ethiopia	25	2011
Source: ictDATA.org adapted from national household surveys.