World must prep for bigger Net

Internet set to become even bigger with 5 billion users by 2025, says report, which stresses need to explore new scenarios to better prepare for this future.
Written by Tyler Thia, Contributor

In 2025, the world's Internet population will hit 5 billion users with a market worth US$3 trillion, according to a new report, where its author calls for governments and businesses to start planning over the next five years to ensure success for this future.

Conducted by Cisco Systems and the Monitor Group's Global Business Network, the report sets out scenarios and premises to examine the driving forces and uncertainties that will shape the path of the Internet over the next 15 years.

According to the study, come 2025, most of the growth in Internet-related markets will come from emerging economies and outside of today's "high income" advanced economies. The report also noted that global governance of the Internet will remain unchanged, and "digital natives" will relate to the Internet very differently than earlier generations. In addition, the traditional keyboard will no longer be the primary interface of the Web.

Because connectivity will be available in several forms, pricing will also become more flexible with service providers capitalizing on the different market segments with various pricing variables, where "one-size-fits-all bandwidth options will be the exception rather than the norm", the study noted.

In order for the Internet to grow, there must first be technological progress and network infrastructure will need to be expanded, which the report said will depend on the interplay of government policies and private investment decisions.

Choices consumers make, or one "axis of uncertainties" may hinder or advance growth, shaping demand for the Internet.

"Global economic prosperity, GDP (Gross Domestic Product) growth and income distribution trends across and within countries, will be major factors in translating broader preferences into actual choices--and effective demand," noted the report.

It suggested four scenarios, namely around Net neutrality policies, infrastructure investments, consumer response to new pricing models and technology adoption, which might develop.

One scenario describes a familiar roadmap in which the Internet continues on its trajectory of unbridled expansion and product and service innovation. The other three hypotheses challenge this future and in the process, illuminate various risks and opportunities that lie ahead for both business leaders and policy makers.

Co-author Enrique Rueda-Sabater, Cisco's senior director of strategy and economics in emerging markets, highlighted that scenarios are "a set of divergent stories about the future to help explore and prepare for possible futures of the Internet".

"[These scenarios] can help corporate strategists develop resilient, nimble business models and policy makers to ensure they create a hospitable institutional environment and avoid pitfalls," he explained. "By exploring and rehearsing divergent and plausible futures for the Internet, not only can leaders prepare for any future, they can also help shape it."

Deciding now for 15-year future
In an e-mail interview with ZDNet Asia, Rueda-Sabater further noted that looking 15 years ahead offers a good balance between a long enough time period to allow major developments to take place, as well as a relatively short timeframe to enable governments and service providers to start thinking about more immediate consequences.

Certain landmark events marked out in 1995, for example, helped shape how society views and uses technology today, he said.

"Microsoft had just launched a new OS, [Windows 95], that included for the first time [Web browser] Internet Explorer. By the end of that year, there were 16 million Internet users worldwide and today, we are about 2 billion.

"It was the year when text messaging was first available, and only in Japan. DVDs were a novelty about to appear, and Amazon sold its first book and was just working on its first Web site," recalled Rueda-Sabater. "By positioning for success in 2025, governments and enterprises will be required to take decisions in the next five years."

The study also noted that while the Internet has changed the way news and media are consumed, content derived from traditional media will remain in demand.

"What people are prepared to pay for varies quite a lot and as a result, the incentives for professional content generation in ways similar to those of traditional media will vary quite a lot under different scenarios," Rueda-Sabater said. "Business models of media companies will certainly continue to be challenged and to experiment much change."

He added that as society's appetite for content continue to grow in different forms and shapes, media organizations will also be exposed to a myriad of opportunities.

Remote areas to enjoy connection
According to the study, the Internet has brought about volumes of change and improvement to many parts of the world, but remote areas such as villages in some countries are still cut off from the information highway.

It noted that governments will try to extend connectivity to remote villages but challenges still lie in rolling out such "basic infrastructure" to these areas.

"It is a relatively cheap infrastructure to put in place as the possible combinations of fixed [DSL and cable], mobile telephony and other wireless technologies continue to expand alongside cost-effective options," Rueda-Sabater said. "The success of connectivity is one of public-private complementary."

"A good policy and regulatory environment leads to the private sector having incentives to provide connectivity--it is crucial to keep those incentives in place so that private investment provides as much of this basic infrastructure as possible."

He added that governments can fill the gaps where connectivity might not be commercially viable or might take too long to reach certain areas and segments of the population.

On the increasing popularity of social media, Rueda-Sabater believes social networking will become a greater part of people's lives and eventually, such sites will develop to cater to a "much more segmented and diverse" community.

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