June 1, 2011

Building Communities around Digital Highways

Governments and telecom operators worldwide are spending billions in a quest to bank on digital highways—defined as nationwide high-speed broadband facilitated through fixed and wireless networks—in the hopes of fuelling socioeconomic development and creating new opportunities for future growth. Effective and sustainable deployment of digital highways and capture of related opportunities and benefits is not an easy task, and requires coherent and complementary action along the broadband ecosystem.

Globally, it is becoming more and more apparent that widely available and affordable high-speed broadband is essential in driving national competitiveness and enabling advancements in key priority areas including education, healthcare, energy and the environment, and civic engagement. Governments around the world are now spending billions and setting ambitious targets as they recognize that a crucial foundation for many areas of socioeconomic development are digital highways—defined as nationwide high-speed broadband enabled by a combination of fixed as well as wireless networks. Just as actual highways connect people and foster social and commercial activity, digital highways can facilitate the creation of virtual communities in vital areas. When policymakers and telecommunications operators collaborate with leaders in other sectors, such as health and education, they are laying the groundwork for profound improvements—boosting national competitiveness, innovation, economic productivity, and social inclusion.

However, accelerating the deployment of digital highways and deriving their full benefits is not a simple task. It requires fundamental changes in vision and action throughout the entire broadband ecosystem. Policymakers and network operators must first look beyond broadband networks alone and facilitate the development of a host of related services and applications (apps), then actively encourage citizens to use them. There is also a strong need for collaboration among other sector participants such as device manufacturers, application developers, and counterparts in adjoining sectors. Finally, the members of the broadband ecosystem must work with their counterparts in adjacent industries—such as health, energy, education, and transportation—to develop the apps that will help those sectors to reap broadband’s benefits. Only when all of these stakeholders are fully engaged can digital highways reach their full potential and facilitate efficiency, competitiveness, and prosperity in the communities they serve.

The State of Digital Highways

“Despite digital highways’ socioeconomic impact and their importance as the foundation for digital communities, more than 83 percent of the world’s population lacks connection to a broadband network. High-speed broadband is available to just 6.2 percent of the global population,” said Karim Sabbagh, Senior Partner and the global leader of the Communications, Media, and Technology practice. Notwithstanding the best efforts of governments and the private sector, the broadband digital divide persists as a significant challenge to inclusive and sustainable development, especially in emerging economies. These gloomy statistics, however, fail to show the progress that countries have made in recent years. Policymakers and network operators are taking major strides to accelerate the availability of national broadband networks.

PolicymakersBoth in developed and developing markets, policymakers are considering the establishment of digital highways to be a national imperative and they are introducing policies and regulations to ensure their rapid deployment. Qatar is taking the lead in the Middle East, with the Qatari government recently announcing the establishment a national broadband network company (Q.NBN) to accelerate rollout of nationwide broadband fiber to the home access.

Network operatorsAlong with policymakers, network operators are the dominant stakeholders in the sector, and they are increasingly playing an active role in the development of digital highways by adopting new business models that separate their network assets from services. These multi-layer business models allow operators to reduce their focus, investment, and dependency on traditional revenue streams and instead position themselves to scale next-generation networks and related apps and services. Often policymakers and network operators work together to forge solutions beneficial to them both. The fibre to the home deployment plans currently undertaken by Etisalat to ensure nationwide coverage in the UAE, and related infrastructure sharing framework set by the UAE telecommunications regulatory authority illustrate the operator-driven model.

Building Communities around Digital Highways

With national broadband networks around the world on track for continued deployment, participants in the broadband sector are recognizing that the true value of digital highways does not reside in their construction alone. If broadband represents a digital highway, then the applications that are enabled by broadband are the communities that will grow alongside it—and they are critical to realizing the maximum socioeconomic benefits from broadband. “Policymakers, operators, device manufacturers, and application developers are unlocking the true potential of digital highways by facilitating the creation of apps that deliver better services and boost national competitiveness,” said Sabbagh.

Each member of the broadband ecosystem has a clear role in building communities around digital highways. Policymakers will need to adopt a holistic approach that encourages the development and use of apps. Operators will need to focus on the opportunities generated by this shift in direction and seek out new revenue streams accordingly. And device manufacturers and application developers will need to collaborate with each other as well as with operators on the propositions that will most appeal to users.

Policymakers: Adopting an Ecosystem Perspective

“The widespread adoption of broadband applications depends on whether ICT policymakers can take an inclusive, collaborative view of the broadband ecosystem” said Bahjat El-Darwiche, Partner. Three initiatives for ICT policymakers are clearly necessary. First, they must collaborate with policymakers in adjacent industries—such as healthcare, education, energy, and transportation—to develop sector-specific ICT policies. Second, policymakers must stimulate development of digital highway business and consumer applications, such as cloud computing or eGovernment including selectively investing in initiatives needed to drive their use. Finally, ICT policymakers need to move beyond simply tracking the availability and adoption of broadband services and establish tools for a holistic assessment of the broadband ecosystem socioeconomic impact.

Operators: Building New Capabilities for New Opportunities

“In the next five years, revenue opportunities for operators worldwide will continue to shift from those generated on traditional networks (mainly voice-driven) to services enabled by digital highways, whether high-speed broadband access, or cloud computing, or software as a service and vertical segment specific ICT ventures. In 2015, such services could amount to a US$759 billion opportunity for operators,” said El-Darwiche. Operators that have been slow to invest in broadband, hoping to first get the full return on their investments in traditional services, will need to adapt to this shift to recognize the opportunities afforded by digital highways. Operators around the world are already shifting their strategies accordingly; many have forged partnerships with application developers or other ecosystem stakeholders. In the Middle East, the opportunity in this field is significant: economic liberalization, government reform, increasing ICT literacy in the workplace and in society, and large public spending on national infrastructure and development projects offer a new opportunities for telecom operators in the digitization space, beyond high-speed broadband connectivity provision.

However, delivering these solutions and serving these markets requires operators to build a different set of capabilities than those required in providing traditional telecommunication services. First and foremost, therefore, operators need to enhance their ability to engage and incentivize large developer communities. Second, they need to build go-to-market partnerships that offer access to specialized skills. Finally, they need to move away from their traditional focus on network deployment to emphasize services and applications.

Operators have traditionally operated closed networks and allowed new applications on a system only after intensive testing; moving to an approach that allows for frequent new services requires operators to significantly scale up their service provisioning and delivery platforms. In addition, operators need to establish open platforms, which allow small application developers to profitably develop apps for operators.

Device Manufacturers and Application Developers: Collaborating to Appeal to Users

Like operators, device manufacturers and application developers should collaborate with other ecosystem players to capitalize on the digital highways opportunity. In light of consumers’ and application providers’ growing demand for data services, manufacturers are responding with smartphone devices that capitalize on upcoming digital highways. In terms of contributing to socioeconomic development, device manufacturers can forge partnerships with public- and private-sector players to drive adoption of apps in key sectors and underpenetrated segments. Device manufacturers can also play a central role in nurturing developer communities, which can drive the development and adoption of new broadband apps. To do so, they should team up with telecommunications operators, operating system providers, and application developers to enable open platforms and profitably bring new propositions to market.


“UN Secretary-General Ban Ki-moon recently said in an address to the Broadband Commission for Digital Development that broadband has extraordinary potential for human progress. A campaign from that commission, a global NGO, calls for universal broadband with the slogan “B more.” However, to deliver on the promise of broadband and to “B more,” stakeholders across the ICT ecosystem need to take a holistic approach to its role in society,” concluded El-Darwiche. The future of digital highways rests on a collaborative, committed, and capable ecosystem, which not only delivers high-speed broadband but also builds vibrant communities around it. Communities that facilitate stakeholders’ innovation, adoption, and collaboration will realize the extraordinary potential of broadband.