An investment of at least $25bn is needed to fully develop fixed and wireless internet access in the Arab world, according to a new report published last week by the World Bank.
The report, Broadband Networks in the Middle East and North Africa: Accelerating High–Speed Internet Access, found that "with some of the highest rates of unemployment and the most youthful populations in the world, MENA countries have a formidable challenge to create and sustain economic and social opportunities for their people — and tech can help address some of those formidable challenges".
However, according to one of the report's researchers, Joulan Abdul Khalek, "despite a good amount of work done on national broadband strategies throughout the Arab world, the significance of the internet as a social and economic development platform is still an alien concept to most parts of government."
The report itself is not quite so explicit in this criticism, but does highlight that broadband potential in the region remains largely untapped.
"In spite of broadband's potential to advance socio-economic development in MENA, the region is falling behind in terms of internet access and use, creation of digital content, and development of infrastructure," the report says.
Fixed broadband markets, for example, are "largely underdeveloped" due to a range of factors including infrastructure, competition and high prices. As a result, in over 50 percent of the MENA countries, fixed broadband penetration is below 25 percent of households.
Mobile broadband fares a little better, however. "Mobile broadband markets in MENA are much more developed" due to the "quick development of mobile broadband markets is the presence of vibrant, effective competition," the report says.
Nevertheless, there are substantial differences in national markets across the region. For example, eight MENA countries enjoy mobile broadband penetration levels above 50 percent of the population – rising to more than 70 percent in Bahrain — while 3G and 4G services are not currently available in Algeria, the West Bank and Gaza.
Meanwhile, in Iraq and Iran — despite the fact that these services are nominally available — limited availability (in Iraq, for example the only 3G operator is currently confined to the Kurdish Region,) has resulted in mobile broadband penetration levels of less than one percent.
It's a similar story for other infrastructure areas, including the number of submarine cables landing in each country; while Egypt and UAE are connected to 12 or 13 cables, Jordan and Yemen have just two. For those at the lower end of the spectrum, there are negative effects on network connectivity and resilience, as well as end-user costs and opportunities for competition.
Moreover, the "patchy submarine connectivity between the Middle Eastern part and the North African part of MENA" means that rather than connecting with each other many of these cables merely connect Middle East countries directly with Europe or Asia. Consequently, "despite abundant international connectivity, the limited competition in international (and regional) connectivity has translated into high international charges for the region".
Regulatory and infrastructure solutions
According to the report, the potential remedies for these missed opportunities including calls for active and passive infrastructure sharing, as well as "regulations that facilitate and discipline the access to already constructed infrastructure".
Similarly, they also call for more joint efforts between utility companies and telcos. Although examples of these partnerships do exist — such as a collaboration between Oman’s state-owned utility company, Haya Water, and telecom operators (which resulted in Haya Water installing fibre optic cables in conjunction with its new pipelines) — the report says that this sort of joined up thinking does not happen as often as it should.
Elsewhere, the report also recommends looking into public subsidies for rural broadband development, broadband via satellite and including coverage obligations in telcos' licences.
This technological mix could also help address the question of affordability in the region. High-speed internet access is deemed "prohibitively expensive" in most MENA countries and the report calculates that in Tunisia, the poorest 40 percent of the population would need to spend more than 40 percent of their income to afford it.
In contrast, subscription fees for high speed broadband cost less than two percent of monthly income in the United Arab Emirates, and typically less than five percent of monthly income across the Gulf countries.
More widely, even slower broadband services as seen as too expensive in many parts of the region. The report calculates, for example, that sixty percent of the people in Algeria, Djibouti, Morocco, Syria, Tunisia, and Yemen, "cannot afford fixed and/or mobile broadband services".
Competition, compromises on speed, and introducing other forms of connectivity — including satellite broadband — could all play a role in remedying this situation. The report notes that: "In all the countries featuring a mix of different internet access technologies (eg WiMax, xDSL, FTTx, 3G, etc), internet access prices are lower."
This matters, because as author Michel Rogy notes, "for it [broadband] to have its full impact, people will need access to it".
Accordingly, he calls for "a strategic framework of reform", which will "extend the geographical reach and resilience of national networks" alongside increased competition and expanded networks. These aspects, which combined with "lowering the barriers of cost, will ensure that broadband internet has its full developmental impact".